Ferrexpo PLC, a producer of premium iron ore pellets, has reported its production results for the second quarter and first half of 2024. The company's production has seen a significant increase compared to previous periods, despite ongoing challenges due to the war in Ukraine. The access to the Black Sea maritime corridor has enabled continued shipments from Ukrainian ports, with over 800 ships passing through since its opening in late 2023. However, cost pressures, especially electricity prices, continue to rise, and the company has been proactive in sourcing alternative power from Ukraine's European neighbors to minimize disruption to its production activities.
The war in Ukraine has also impacted the company's workforce, with four more colleagues being killed while serving in the Ukrainian Armed Forces during the period. Despite these challenges, the company remains committed to supporting its workforce and maintaining strong production levels. The Group has reported a rolling 12-month Lost Time Injury Frequency Rate (LTIFR) of 0.31, below the historic five-year average, and has successfully operated two to three pelletising lines during the quarter, resulting in a total production of 1,672,506 tonnes.
Ferrexpo has also resumed the production of Ferrexpo DR pellets (FDP) during the quarter, with improvements in the physical strength and chemical quality of pellets observed. The company's technical performance has been highlighted, with the business rapidly bringing back previously idled capacity, resulting in an improvement in the cash conversion cycle. However, despite increased production and sales, higher iron ore prices in the first quarter did not extend into the second quarter, leading to reduced margins as the quarter ended.
In summary, Ferrexpo has reported strong production results for the first half of 2024, with a significant increase in production compared to previous periods. The company has navigated various challenges, including cost pressures and the impact of the war in Ukraine, while maintaining its commitment to the safety and wellbeing of its workforce and local communities. Ferrexpo remains focused on supporting its stakeholders and maintaining its production levels, despite the ongoing challenges it faces.