Ferrexpo Plc · LSE:FXPO
Ferrexpo — H1 2023 Earnings Presentation
18 slides from Ferrexpo's earnings presentation, Aug 4, 2023
Slide 1: Resilient Performance in a Challenging Environment
RESILIENT PERFOMANCE IN A CHALLENGING ENVIRONMENT Interim Financial Results 2023 1
Slide 2: Introduction
INTRODUCTION Lucio Genovese, Executive Chair
Slide 3: Operating Environment
OPERATING ENVIRONMENT RIGHT-SIZING THE BUSINESS AS WE ADAPT TO EVOLVING CHALLENGES Resilient Ukraine Committed workforce Nimble and adaptive business • Midway second year of war • Workforce different due to emigration, • Right-sizing business for the near-term absences and military service • Situati
Slide 4: Performance Snapshot
PERFORMANCE SNAPSHOT OPERATIONAL EFFICIENCIES DELIVER AN IMPROVED PERFORMANCE Operating performance Financial performance ESG performance • Production 2 million tonnes, +57% • Sales of 2.1 million tonnes • LTIFR 0.26, below historic five-year compared to 2H 2022 average 0.69. Zero fatalities since 2
Slide 5: Market Review
MARKET REVIEW Yaroslavna Blonska, Acting Group Chief Marketing Officer 5
Slide 6: Market Snapshot
MARKET SNAPSHOT PRICES REMAIN RESILIENT DESPITE INCREASED VOLATILITY FE AND PELLET PRICES (US$/t) Iron ore Steel 200 175 IRON ORE PRICE (65% FE) Prices fell -5% over the period due to increased global supply and Chinese recovery concerns and end-user 150 steel demand awaiting stimulus measures 125 1
Slide 7: Logistics
LOGISTICS CAPACITY CONSTRAINTS DEMAND A RETHINKING TO TRADITIONAL SUPPLY ROUTES Rail Barging & Shipping Warehousing • Owned rail wagon fleet ensures availability • C3 freight averaged 26% lower at US$19.5/t • Provides additional security and stability by • Improvement in journey times to Central- •
Slide 8: Operations Review
OPERATIONS REVIEW Nikolay Kladiev, Group Chief Financial Officer 8
Slide 9: Health and Safety Performance
HEALTH AND SAFETY PERFORMANCE SAFETY REMAINS OUR FIRST PRIORITY SAFETY PERFORMANCE 1H 2023 PERFORMANCE - Group LTIFR 0.26, below 0.9 historic full year trailing 0.8 average 0.69 0.7 - Ukrainian operations LTIFR 0.14 (0.30 2H 2022 and 0.71 0.6 1H 2022) 0.5 - External assurance process on 2022 safety
Slide 10: Operational Update
OPERATIONAL UPDATE RIGHT-SIZING OPERATIONS TO MEET ACCESSIBLE MARKETS Mining activities Pellet production Logistics Operating a single mine out of two on a Focus on high grade premium products for Remains greatest single constraint on rotational basis, reflecting lower sales capacity accessible mark
Slide 11: Financial Review
FINANCIAL REVIEW Nikolay Kladiev, Chief Financial Officer 11
Slide 12: 1H 2023: Financial Highlights
1H 2023: FINANCIAL HIGHLIGHTS CONTINUING TO DELIVER STRONG PERFORMANCE Revenue of US$334 million, 64% lower due to restricted logistics availability and tighter market environment C1 Cash CostA of US$71 per tonne, reflecting benefits from the local currency devaluation in 2H 2022, lower prices for s
Slide 13: Financial Performance in 1H 2023
FINANCIAL PERFORMANCE IN 1H 2023 FOCUS ON HIGH QUALITY, HIGH GRADE PRODUCTS CONTINUES 1H 2H 1H (USD million, unless stated) 2023 2022 % 2022 % PRODUCTION & SALES ALIGNED TO LOGISTICS AVAILABILITY - Black Sea ports in Ukraine still not available to the Group Pellet production (Mt) 1,967 1,256 +57% 4,
Slide 14: Review of Cash Flow in 1H 2023
REVIEW OF CASH FLOW IN 1H 2023 BENEFITING FROM LOW DEBT LEVELS AND BALANCE SHEET STRENGTH 1H 2H 1H (USD million, unless stated) % % 2023 2022 2022 Underlying EBITDAA 64 279 -77% 486 -87% Working capital movement 21 93 -77% (112) +119% Income tax paid (7) (51) -86% (60) -88% Other (incl. non-cash ope
Slide 15: Reconciliation of Underlying EBITDA (1H 2022)
RECONCILIATION OF UNDERLYING EBITDAA (1H 2022) KEY FACTORS: SALES VOLUMES, MARKET FACTORS AND C1 COSTS key driver 500 1H 2022 benefited Production volume Operating forex gains from two pre-war effect. net of stock on US$ denominated 400 months with higher trade receivables due to movement, of US$149
Slide 16: Review of C1 Costs
REVIEW OF C1 COSTSA ELECTRICITY AVAILABILITY AND PRICES KEY FACTOR WATERFALL CHART: C1 COSTSA C1 COSTA COMPOSITION - Energy-linked costs of 48% compared to 46% in 1H 2022 reflecting the net effect of higher electricity costs and lower costs for natural gas 80 17.3 2.2 4.8 10.3 - Lower royalty relate
Slide 17: Q&A
Q&A 17
Slide 18: Standing with Ukraine
STANDING WITH UKRAINE 18