Key points:
- Ferrexpo shares fell 10.5% after suspending operations on Russian air strikes.
- The company noted that the electricity infrastructure near its facility was hit.
- It is not yet clear when the iron ore exporter shall resume operations.
The Ferrexpo Plc (LON: FXPO) share price fell 10.5% after announcing that it had temporarily suspended operations at its sites across Ukraine after the different parts of the country were hit by Russian missile strikes in the ongoing conflict between the two countries.
The company noted that none of its employees had been injured by the attacks, which hit state-owned electrical infrastructure outside the Group’s operations, damaging the same. Therefore, the amount of electricity available had been severely limited.
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The limited electricity available has been prioritised for critical equipment used for essential services and the local communities. The company temporarily suspended its operations to allow engineers time to assess the damage done to the electrical infrastructure before charting a way forward.
Luckily for investors, Ferrexpo confirmed that it has an adequate supply of iron ore, some currently in transit, while others were in stockpiles. The ore volume is enough to meet the expected sales volume so long as the transport corridors it uses within Ukraine remain open.
Ferrexpo promised to issue further updates to the markets as the situation unfolds. The exporter of high-grade iron ore pellets to the global steel industry is just one of many Ukrainian companies whose operations have been negatively affected by the Russia-Ukraine war.
A quick resolution is not feasible, as both sides have maintained hardline positions. Still, the most affected are the civilians who are not part of the war but are usually the biggest victims of war.
Jim North, Ferrexpo’s CEO, commented: “At Ferrexpo, since the start of Russia’s invasion of Ukraine in 2022, our first priority has always been our people, and we are working to ensure the safety of our team in Ukraine. The events of yesterday have resulted in significant damage to major cities across Ukraine, as well as a power outage at our operations and local communities. We are working to ensure that power is provided in critical areas, both within our facilities and in local communities, in order to support the safety of our workforce and community members.”
*This is not investment advice.
Fererexpo share price.
The Ferrexpo share price fell 10.5% to trade at 113.03p, falling from Monday’s closing price of 126.30p.