Ferrexpo mining company with assets in Ukraine in 2021 increased its net profit by 37.1% to $870.99 million with revenue growth by 48.1% to $2.5 billion, the company said in a report on the London Stock Exchange on Friday. According to it, EBITDA profit increased by 67.5% to $1.4 billion.
The report also notes that the company’s gross debt decreased from $266 million to $50 million last year, and its net cash position increased from $4 million to $117 million.
Ferrexpo points out that its production assets were not affected by the hostilities after February 24, however, sea transportation has been stopped since February 25, and currently only shipments of products to Europe are carried out.
Commenting on the impact of the war on operations and financial performance, Ferrexpo points out that it has adjusted its long-term model to reflect the lower sales volume caused by the lack of maritime sales to its customers. The expected lower sales volume will have a negative impact on cash flow generation, which, in turn, will negatively affect the carrying amount of the group’s non-current assets in future periods. However, Ferrexpo has so far refrained from making any estimates.
At the same time, Ferrexpo reported that it had prepared stress tests with more serious adverse changes, such as the cessation of production for three, six and 18 months. Under these stress-testing scenarios, the impairment loss may increase to between $320 million and $400 million, again depending on circumstances and macroeconomic data that will be known only to the group at the time of preparation of the interim condensed consolidated financial statements for the six months ended June 30, 2022.