Ferrexpo blames share price collapse on Ukrainian law enforcement
MOSCOW. March 21 (Interfax) - Ferrexpo plc, a producer of iron ore pellets with operations in Ukraine, attributes the 36% drop in its share price on the London Stock Exchange in the past 10 days and the 65% drop in the past year to pressure on the company from Ukrainian law enforcement agencies, Ukrainian media reported, citing a company statement.
The recent drop in the share price of parent company Ferrexpo plc on the London exchange is a consequence of the general increase in pressure on Ferrexpo from Ukraine's law enforcement agencies in the past year and questionable court rulings, the company said, denying reports in the Ukrainian media about other reasons for the drop.
Ferrexpo cited commentary from analysts and institutional investors in London and New York, but did not name them.
As an example of "questionable court rulings," the company cited the decision of the Eastern Appellate Economic Court in Kharkov in favour of Maxi Capital Group LLC ordering Ferrexpo's Poltava Mining to pay UAH4.7 billion ($125 million).
Ferrexpo said that, as a company that is traded on the LSE, it adheres to the highest standards of corporate governance and complies with all requirements of international and Ukrainian law, and hopes that this ruling will be overturned on appeal.
Ferrexpo's IPO in June 2007 was priced at 140 pence per share. After climbing to 260.9 pence, the shares plunged to 19.817 pence at the end of 2018, at the height of the global financial crisis. The shares then rebounded back to 329.6 pence in 2011 and fell back to an all-time low of 13.164 pence at the beginning of 2016 after the collapse of Finance & Credit, the bank controlled by Ferrexpo majority shareholder and CEO Konstantin Zhevago, amid a drop in world iron ore prices. The share price rose back to an all-time high of 480.8 pence in July 2021 amid a shortage of iron ore products on the world market, after which they again began to fall and the drop accelerated after February 2022.
The company's share price fell 5.5% to 44.92 pence on Wednesday. Ferrexpo's market capitalization is now about GBP284.35 million ($361.2 million at the current exchange rate).
Ferrexpo's net profit fell by two thirds to $27.01 million in the first half of 2023 on revenue down by about 65% to $334.01 million. EBITDA plunged 87% to $63.64 million. The company has not disclosed its financials for all of 2023.
Ferrexpo owns 100% of iron ore miners Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining, as well as 99.9% of Ferrexpo Belanovo Mining.