Ferrexpo's Q1 output lifted by improved Ukraine power supply

(Reuters) - Ferrexpo Plc said on Thursday its first-quarter production more than doubled from the prior three months due to improved power supplies to its units in Ukraine, sending the miner's shares up over 5%.

The group, which has all its operations in Ukraine, said it produced 900,000 tonnes of iron ore pellets in the first quarter, compared with 420,000 tonnes in the fourth quarter last year.

Ferrexpo's operations have been impacted by the Russian invasion and the ensuing conflict as severe logistical constraints and damages to Ukraine's electrical infrastructure have forced the miner to scale down production.

The group's mining activities began slumping in the second quarter last year due to the constraints and as European customers — particularly steelmakers that use iron ore pellets to produce steel — cut purchases.

While Ferrexpo maintained product deliveries to European customers throughout 2022, restrictions on its access to the Black Sea due to a Russian blockade hit logistics routes to markets outside Europe and dented its sales.

Ferrexpo reiterated in a statement that it would be able to operate two of its four pelletiser lines, and said it intends to operate with between one and two lines in the second quarter.

Brokerage Peel Hunt, meanwhile, said power and logistics issues look set to limit Ferrexpo to two pelletiser lines into the third quarter at least.

However, it added that the second line ramped up production faster than it expected, helping Ferrexpo post a significant beat versus its expectations of 745,000 tonnes in output in the first quarter.

London-listed Ferrexpo's shares were up as much as 5.8% at 117 pence.

(Reporting by Muhammed Husain in Bengaluru; Editing by Nivedita Bhattacharjee and Uttaresh Venkateshwaran)