Ferrexpo shares tumble on surprise loss, struggling Ukraine peace efforts

Ferrexpo’s shares plummeted on Wednesday following its announcement of a surprise loss and after fledgling efforts by US President Donald Trump to ease fighting in Ukraine, where the iron ore pellet producer operates, appeared to flounder.

The London-based company’s shares, which have lost more than two-thirds of their value since the start of the Russia-Ukraine war in February 2022, slid nearly 15% on Wednesday.

Trump had hoped to broker a 30-day ceasefire during a telephone call with Russian President Vladimir Putin on Tuesday as a first step toward a broader deal to end the conflict, which is stretching into its fourth year.

Putin, however, only agreed to stop attacking Ukrainian energy facilities temporarily. The two countries were already accusing each other of violating the deal on Wednesday just hours after the call between Trump and Putin.

Ferrexpo, meanwhile, took a $72 million impairment charge for 2024 due to falling carrying values of its assets and lower cash flow, leading to a loss of $50 million for the year, it said in its annual results.

Without the charge, it had expected to report a profit of $22 million.

Brokerage Peel Hunt had also expected the company to post a net profit but said Wednesday’s market reaction was more linked to the war.

“I think the share price fall is more to do with the Trump-Putin call not delivering the 30-day ceasefire that seemed to be the expectation going in,” said Peel Hunt analyst Peter Mallin-Jones.

Prices of commodities, including the iron ore that the company uses to make its pellets, have fallen sharply since the outbreak of the war, a trend flagged by Ferrexpo in its results.

It has also struggled to maintain its Ukrainian operations after the government moved in February to nationalize its largest mine amid investigations into the alleged misappropriation of funds related to illegal mining.

It has denied all allegations.

Ferrexpo on Wednesday said that it had sent a formal notice to the Ukrainian government over the move to gain control of the nearly 50% of rights it owns in Poltava mining and processing plant. It said it has yet to receive any official documentation or requests from authorities.

(By Pushkala Aripaka, Yamini Kalia and Aby Jose Koilparambil; Editing by Savio D’Souza and Joe Bavier)