Ferrexpo plc (LSE: FXPO), a producer and exporter of premium iron ore pellets, announces its audited financial results for the year ended 31 December 2024
Lucio Genovese, Executive Chair of Ferrexpo, commented:
“In my full statement below, I reflect on 2024 as a year of unprecedented achievement and fortitude for Ferrexpo. Through another 12 months of operating during a time of war, our people remained determined, culminating in an increase in production and sales to the highest levels since the start of the full-scale invasion in February 2022. I am very pleased, and grateful, that our organisation has been able to achieve such a dramatic recovery.
Throughout this operational recovery, the business demonstrated tremendous agility, coordinating more than 8,000 people, from the mine face to dock side, and varying production between one and three of our four pelletising lines, depending on power availability, customer demand and pricing, at any given time.
By quickly scaling up or down our production, we were able to produce a variety of different product qualities and restart shipping activities on a variety of vessel sizes, including the larger, more efficient capesize vessels. We also brought back production of our highest quality, and higher margin products in the period. This allowed us to diversify geographically and supply customers in MENA and Asia, having been constrained to mainly European markets before.
The 66% increase in annual production at an average realised prices 17% lower than last year, translated into a 43% increase in revenue. Overall, our C1 cash costs on a unit basis increased by 10% to US$83.9 per tonne. The main reason for the increase is the requirement to import electricity, sometimes at prices that are double the domestic price. Prices for other energy sources continue to remain high since the full-scale invasion began as well as prices for key consumables, transport and logistics, and salary increases.
This year we are required to record non-cash impairment loss of US$72 million as at 31 December 2024 on the Group’s non-current operating assets, including property, plant and equipment, intangible assets and other non-current assets. This is due to the Group’s lower cash flow generation driven by a decrease in prices for our products due to a weaker long-term outlook for the iron ore market, in addition to higher prices for power and key consumables.
Although the Group is reporting a loss of US$50 million for 2024, had the impairment of US$72 million not occurred the Group would have made a profit of US$22 million. This demonstrates that, while the strategy to bring back production volumes did not result in the expected growth in profits, it did help to limit losses in the face of the exceptional challenges.
We are closely watching the diplomatic efforts to bring an end to the war in Ukraine and are encouraged by the progress thus far. We must, however, remain vigilant, even as we hope for a safer and more secure future.”
Financial highlights1
- Revenue increased by 43% to US$933 million due to higher sales volumes, partially offset by lower average iron ore prices (2023: US$652 million).
- Underlying EBITDA decreased by 30% to US$69 million, mainly due to lower realised iron ore prices and higher C1 costs (2023: US$99 million). Despite the fall in realised prices, the EBITDA margin remained positive, albeit lower at 7% (2023: 15%).
- Net cash flow from operating activities was US$92 million, slightly lower than in 2023 despite the lower operating cash flow, thanks to positive effects from working capital movements as at 31 December 2024 (2023: US$101 million).
- For 2024, the Group reports a loss of US$50 million, mainly due to impairment charge of US$72 million as result of the reduction in the carrying value of the Group’s assets and lower cash flow generation due to the war.
- Capital investment of US$102 million, including sustaining and optimisation projects (2023: US$101 million).
- Net cash position remained flat at US$101 million as at 31 December 2024 (2023: US$108 million). Excepting lease liabilities, no outstanding interest-bearing loans and borrowings as of 31 December 2024.
Financial Summary
1. When assessing and discussing the Group’s reported financial performance, financial position and cash flows, management may make reference to Alternative Performance Measures (“APMs”) that are not defined or specified under International Financial Reporting Standards (“IFRS”) - see pages 64 to 65 for more information
Link to full PDF version of this release: click here.
For further information, please contact:
Ferrexpo:
Nick Bias
[email protected]
+44 (0)7733 177 831
Tavistock:
Jos Simson / Gareth Tredway
[email protected]
+44 (0)20 7920 3150 / +44 (0)7785 974 264
Notes to Editors:
About Ferrexpo: Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and a listing in the equity shares commercial companies category on the London Stock Exchange (ticker FXPO) and a constituent of the FTSE 250 index. The Group produces high grade iron ore pellets, which are a premium product for the global steel industry and enable reduced carbon emissions and increased productivity for steelmakers when converted into steel, compared
to more commonly traded forms of iron ore. Ferrexpo's operations have been supplying the global steel industry for over 50 years. Before Russia's full-scale invasion of Ukraine in February 2022, the Group was the world's third largest exporter of pellets. The Group has a global customer base comprising of premium steel mills around the world. For further information visit www.ferrexpo.com.