Ferrexpo reels as tax policy disrupts Ukrainian output
By Iain Gilbert
Date: Wednesday 06 Aug 2025
(Sharecast News) - Iron ore producer Ferrexpo said on Wednesday that Ukraine's VAT refund suspension had forced it to scale back operations and furlough a significant portion of its workforce.
Despite a strong start to the year, Ferrexpo said momentum was curtailed in Q2, forcing it to make deep cost cuts, with the firm reducing stripping rates, cutting non-essential spending, and operating just one pellet line.
Ferrexpo said group revenues fell 33% to $400m, while underlying earnings dropped 42% to $129m, reflecting lower output and weaker pricing. Net cash fell sharply from $109m to just $6m, as liquidity was squeezed by the Ukranian tax authority's decision.
Margins also narrowed, with its EBITDA margin slipping from 41% to 32%. However, Ferrexpo tripled the output of high-grade concentrate to 36% of its overall mix, driven by strong Chinese demand, helping mitigate some of the revenue shortfall.
Ferrexpo also warned that continued VAT disruption could further constrain production and investments. Still, Ferrexpo said it remains committed to supporting Ukraine, noting that it has paid over $340m in taxes and $180m in salaries since the war began.
As of 0835 BST, Ferrexpo shares were up 0.73% at 45.83p.
Reporting by Iain Gilbert at Sharecast.com
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