Ferrexpo PLC, a producer of premium iron ore pellets, has released its production report for the first quarter of 2024. The company reported a 203% increase in total production compared to the previous quarter, reaching over two million tonnes of iron ore pellets and concentrate. This marks the best quarterly performance since the full-scale invasion of Ukraine and is attributed to the significant contribution of the workforce. Despite challenges, the company was able to export from Ukrainian ports, allowing for larger volumes to Europe and the resumption of sales to MENA and Asian customers.
The company is facing workforce challenges, with 669 employees serving in the army, the highest number since the invasion, and is implementing a comprehensive support program for veterans. Ferrexpo is also focusing on training initiatives to upskill, cross-skill, and re-skill employees to ensure continued resilience. Despite these challenges, the company reported solid production and sales numbers for the quarter and intends to continue using all export capacity available to support the interests of stakeholders.
Ferrexpo remains committed to the safety and wellbeing of its workforce and has reported a rolling 12-month LTIFR of 0.36, below the historic five-year trailing average of 0.52, with zero fatalities reported for over three years. The company successfully operated two to three pelletising lines during the quarter, leading to a 189% increase in total iron ore pellet production compared to the previous quarter. Total sales volumes for the quarter reached 1,991,936 tonnes, all for products grading 65% Fe or above.
The ability to export through Ukrainian Black Sea ports has been positive for production and sales, although it has come with its challenges, including complex logistics and increased shipping and insurance costs. The company has benefited from economies of scale due to access to larger vessels. Despite increased production rates, total costs have also increased, leading to an increase in inventory as the quarter closed.
In summary, Ferrexpo PLC has demonstrated exceptional performance in the first quarter of 2024, overcoming challenges to achieve significant increases in production and sales. The company's commitment to the safety and wellbeing of its workforce, along with its ability to adapt to the changing environment, has been key to its resilience and success during this period.