A metallurgical plant is seen on the outskirts of the city of Mariupol, Ukraine
(Picture: AP)Companies are closing operations in Ukraine and scrambling to rescue staff in the face of advancing Russian troops.
London-listed Ferrexpo and Enwell Energy both announced shutdowns in the country today while steel giant Evraz said it was preparing for possible sanctions.
Stock markets staged a mild recovery as investors went bargain hunting but city broker Peel Hunt said it was “far too early to judge how this will play out and the extent of sanctions”.
Some early impacts were becoming clear. Ferrexpo, the world’s third largest exporter of iron ore pellets for steel manufacturing, said it had suspended trade from the Ukrainian port of Pivdennyi on orders from local authorities.
About 50% of the company’s $1.7 billion in annual sales travels through the port. Affected customers have been given a “force majeure” notice.
Mining operations elsewhere in the country continue for now, with Ferrexpo planning to build up stockpiles.
“The group’s continued primary focus remains the safety of its workforce in Ukraine,” it said. Ferrexpo employs around 10,000 people in the country.
Peel Hunt placed the stock under review “until there is more clarity over the appalling situation in Ukraine”.
Enwell Energy said it had shut down its oil operations in Eastern Ukraine “in light of Russian military activity”. The AIM-listed company has four sites in the country. Enwell said: “The company is taking all measures available to protect and safeguard its personnel and business, and has implemented its emergency response measures following the military action taken by Russia against Ukraine.”
WPP said yesterday it was working to make sure its 200 staff in Ukraine were safe. Uber has offered to help staff in Kyiv relocate as troops advance.
Evraz, the Russian steel giant with shares are listed in London, said that the “worsening situation related to Ukraine has further increased the economic uncertainty and the risk of the imposition of sanctions.”
The board has stress-tested the business and concluded Evraz could survive “further international sanctions” that reduce exports outside of Russia and its allies to zero.
However, in a “severe downside scenario” Evraz, which is almost a third owned by Chelsea’s billionaire owner Roman Abramovich, will have to cut spending by $500 million a year and would need to “raise additional capital in 2023 and 2024”.
CEO Aleksey Ivanov said: “We are conscious of the current geopolitical circumstances. We continue to monitor the situation.”
The statement came as Evraz published annual results showing revenues up 45% to $14.1 billion, boosted by rebounding metal prices. The company declared a $729 million dividend on net profits of $3.1 billion, saying it had “confidence in the group’s financial position and outlook.”
Shares have fallen over 65% since the start of the month but rallied 24.7p, or 14.4%, to 196p this morning.
Elsewhere, AIM-listed Eurasia Mining, which has pits in the Ural mountains, said it would not be affected by new sanctions announced overnight.
