THE POLITICAL crisis in Ukraine took the gloss off miner Ferrexpo’s strong first-quarter production results yesterday.
The FTSE 250 iron ore producer, which operates in the beleaguered country, posted a 9.2 per cent rise in production year-on-year to 2.71m tonnes.
The company said last month that the ongoing political conflict with Russia over territory in Ukraine had not disrupted operations so far and it would continue to invest in ramping up production. Output increased 0.6 per cent quarter-on-quarter.
Yet the firm’s share price slumped almost one per cent yesterday morning, which analysts attributed to weak iron ore price forecasts and political risks.
“The ramp up continues according to plan and continues to belie the political volatility in the country,” said Rob Clifford, analyst at Deutsche Bank.
“With the recent devaluation of the currency – 40 per cent since the start of the year – costs should be down significantly, but inflation will be close behind.”
Investec lowered its price target on the stock, due to its adjusted view of the iron ore price.
Shares fell 0.3 per cent.