Ferrexpo PLC, a producer of premium iron ore pellets, has reported its production results for the third quarter of 2023. The company exceeded expectations and was able to operate up to two of its four pellet lines. Despite challenging rail logistics and limited sea ports capacity, Ferrexpo continued to export premium products and serve the needs of its European customers. The company's strategy to right-size its business and be more responsive to changing circumstances is working. Iron ore prices strengthened over the quarter, which was supportive given the higher logistics costs. The company has focused on building pellet production during the quarter to mitigate risks in the months ahead.
Ferrexpo noted that various initiatives focused on Ukraine's post-war reconstruction, particularly in the iron ore and steel sector, are gaining momentum. However, the company highlighted the challenges of operating its business during a time of war and heading into the vulnerable winter season for energy infrastructure. The company expressed its sadness over the loss of 33 employees who were serving in the Ukrainian Armed Forces. Ferrexpo currently has 739 employees serving in the Armed Forces, with 50 demobilized veterans, 30 of whom have returned to work. The company continues to provide support for these employees and their families through its humanitarian program.
In terms of production, Ferrexpo reported a rolling 12-month Lost Time Injury Frequency Rate (LTIFR) of 0.27, below the historic five-year trailing average of 0.69. The company successfully operated between one and two pelletizing lines during the quarter, with total iron ore pellet production of 1,251 million tonnes, a 17% increase compared to the previous quarter. The focus was on producing higher grade pellets, all grading 65% Fe or above. For the remainder of the year, Ferrexpo intends to operate between one and two pelletizing lines, assuming no further material changes to the operating environment and logistics availability in Ukraine.
Ferrexpo also mentioned that certain legal challenges against the company and certain senior management personnel of Ferrexpo Poltava Mining (FPM) are progressing through the Ukrainian courts. The company believes these claims are without merit and will provide updates as appropriate.
Overall, Ferrexpo continues to prioritize the safety and well-being of its workforce and takes extensive measures to protect employees, their families, and local communities. The company remains committed to producing, transporting, and selling its products despite the challenging environment in Ukraine.