Ferrexpo Regulatory News (FXPO)

19 January 2015

Ferrexpo plc

("Ferrexpo", the "Group" or the "Company")

Unaudited Nine Month Results to 30 September 2014

Ferrexpo today announces key unaudited financial information as of and for the nine months ended 30 September 2014. The Company is releasing this information in connection with the announcement by Ferrexpo Finance Plc of an exchange offer for its US$500,000,000 7.875 per cent. Guaranteed Notes due 2016 and the commencement of the exchange offer period.

Michael Abrahams, Chairman of Ferrexpo commented:

"These good operating results highlight our resilient business model. We continue to benefit from increased production of high quality product which receives a price premium, and lower costs, driven by production efficiencies as a result of the investments we have made over the last four years combined with the fall in the value of the Hryvnia."

Highlights for the unaudited nine months ended 30 September 2014 are presented below:

Financial

§ Turnover of US$1,079 million (9M 2013: US$1,109 million)

§ Net profit before taxation of US$199 million (9M 2013: US$211 million)

§ EBITDA of US$404 million (9M 2013: US$346 million)

§ Group consolidated shareholder equity as of 30 September 2014 of US$954 million (30 September 2013 : US$1,648 million)

§ Net financial indebtedness as of 30 September 2014 US$712 million (30 September 2013: US$677 million)

§ Cash and cash equivalents of US$608 million as of 30 September 2014 (30 September 2013: US$339 million)

One off Impacts

§ US$56 million non-cash increase in EBITDA from the revaluation of US dollar receivables at the Group's Ukrainian subsidiaries

§ US$82 million impairment of Ferrous Resources reflecting the iron ore market environment

Sales and Marketing

§ Average Platts China CFR 62% Fe iron ore price was US$104 per tonne for 9M 2014 (9M 2013: US$136 per tonne)

§ Sales volumes were 8.3 million tonnes of pellets (9M 2013: 7.6 million tonnes of pellets)

§ Ferrexpo's DAF/FOB realized price 15% lower on average in 9M 2014 compared to 9M 2013. Benchmark iron ore price 23% lower on average in 9M 2014 compared to 9M 2013

Operations

§ Most regrettably there was one fatality during the period at the Group's operations

§ 9M 2014 total pellet production 8.3 million tonnes (9M 2013: 8.0 million tonnes)

§ Production of 65% Fe pellets increased 10% to 4.1 million tonnes (9M 2013: 3.7 million tonnes)

§ 9M 2014 average C1 cost per tonne US$47.1 (9M 2013: US$60.1 per tonne)

§ Lower costs driven by the depreciation of the Hryvnia, increased volume, improved efficiency, lower cost FYM ore and reduced commodity prices

Capital Investment

§ 9M 2014 capital investment US$191 million (9M 2013: US$214 million)

§ Growth projects substantially complete at 31 December 2014 to increase output to 12 million tonnes per year and produce mostly 65% Fe pellets

§ FYM concentrator project on hold

VAT / Prepaid Corporate Profit Tax

§ Gross VAT receivable in Ukraine of US$66 million as of 30 September 2014 (US$302 million as of 30 September 2013; US$ 318 million as of 31 December 2013)

§ Fair value of VAT bonds held at 30 September 2014 of US$72 million (30 September 2013: nil)

§ VAT balance as of 30 September 2014 reduced by US$149 million since 31 December 2013 due to foreign exchange losses and fair value adjustments to VAT bonds, of which US$115 million was recorded in reserves

§ VAT refunds in respect of the nine-month period to 30 September 2014 subject to prepayment of corporate profit tax

§ Prepaid corporate profit tax as of 30 September 2014 totaled US$91 million (as of 30 September 2013: US$90 million; as of 31 December 2013: US$87 million)

4Q 2014 Update

§ Average benchmark iron ore price in 4Q 2014 US$74 per tonne (average 9M 2014: US$104 per tonne)

§ The Group received no VAT refunds in November and December 2014, all remaining VAT bonds sold at fair value

§ 4Q 2014 production of 2.8 million tonnes of pellets (Q4 2013: 2.8 million tonnes of pellets)

§ 4Q 2014 production reduced by 144 thousand tonnes of pellets as a result of power restrictions (4Q 2013: nil)

§ 4Q 2014 capital investment approximately c.US$40 million (Q4 2013: US$64 million)

§ Cash and cash equivalents as of 31 December 2014 c.US$627 million (of which c.US$162 million held in Ukraine)

Key financial information for the nine months ended 30 September 2014 is summarised in the table below

(1) Last twelve months

For further information contact:

Notes to Editors:

Ferrexpo is a Swiss headquartered iron ore company with assets in Ukraine and transport and sales operations throughout the world. It has been mining and processing high quality iron ore pellets for the global steel industry for over 35 years. Ferrexpo's resource base is one of the largest iron ore deposits in the world. The Group is the 5th largest supplier of pellets to the global steel industry and the largest producer and exporter of pellets from the Former Soviet Union. In 2014, it produced 11 million tonnes of pellets, a 2% increase compared to 2013 and a record for the Company. Ferrexpo has a diversified customer base supplying steel mills in Austria, China, Japan, Germany as well as other European and Asian countries. Ferrexpo is listed on the main market of the London Stock Exchange under the ticker FXPO. For further information, please visit www.ferrexpo.com

Interim Consolidated Income Statement

Interim Consolidated Statement of Comprehensive Income

Interim Consolidated Statement of Financial Position

The financial statements were approved by the Board of Directors on the 5 January 2015.

Interim Consolidated Statement of Cash Flows

1 The movement in the current period includes the effect of a VAT receivable balance amounting to US$24,594 thousand recovered through VAT bonds. See also note 13

2 Net of withholding taxes paid subsequent to the end of the periods ended 30 September 2014 and 2013. See note 10 for further details. 

Interim Consolidated Statement of Changes in Equity

Notes to the Interim Condensed Consolidated Financial Statements

Note 1: Corporate information

Organisation and operation

Ferrexpo plc (the 'Company') is incorporated in the United Kingdom with registered office at 2-4 King Street, London, SW1Y 6QL, UK. Ferrexpo plc and its subsidiaries (the 'Group') operate two mines and a processing plant near Kremenchug in Ukraine, an interest in a port in Odessa and sales and marketing activities around the world including offices in Switzerland, Japan, China, Dubai and Ukraine. The Group also owns logistics assets in Austria which operates a fleet of vessels operating on the Rhine and Danube waterways and an ocean going vessel which provides top off services and operates on international sea routes. The Group's operations are vertically integrated from iron ore mining through to iron ore concentrate and pellet production and subsequent logistics. The Group's mineral properties lie within the Kremenchug Magnetic Anomaly and are currently being extracted at the Gorishne-Plavninskoye and Lavrikovskoye ('GPL') and Yeristovskoye deposits.

The majority shareholder of the Group is Fevamotinico S.a.r.l. ('Fevamotinico'), a company ultimately owned by The Minco Trust, of which Kostyantin Zhevago, the Group's Chief Executive Officer, is a beneficiary. At the time this report was published, Fevamotinico held 50.3% (30 September 2013: 51.0%; 31 December 2013: 50.3%) of Ferrexpo plc's issued share capital.

The Group comprises of Ferrexpo plc and its consolidated subsidiaries as set out below:

1 The entities were incorporated in February and March 2013.

2 Formerly Helogistics Transport GmbH.

3 The entity was acquired in February 2014.

The Group's interests in the entities listed above are held indirectly by the Company.

At 30 September 2014, the Group also holds through OJSC Ferrexpo Poltava Mining an interest of 48.6% (30 September 2013: 48.6%; 31 December 2013: 48.6%) in TIS Ruda, a Ukrainian port located on the Black Sea. As this is an associate, it is accounted for using the equity method of accounting.

Note 2: Summary of significant accounting policies

Basis of preparation

The interim condensed consolidated financial statements for the nine months period ended 30 September 2014 have been prepared in accordance with International Accounting Standard ('IAS') 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all of the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2013.

The interim condensed consolidated financial statements do not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the full year is based on the statutory accounts for the financial year ended 31 December 2013. A copy of the statutory accounts for that year, which were prepared in accordance with International Financial Reporting Standards ('IFRS') issued by the International Accounting Standard Board ('IASB'), as adopted by the European Union as they apply to financial statements of the Group for the year ended 31 December 2013, has been delivered to the Register of Companies. The auditors' report under section 495 of the Companies Act 2006 in relation to those accounts was unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

During the period ended 30 September 2014, the Ukrainian Hryvnia has devalued by approximately 62% compared to the US Dollar; from 7.993 as at 31 December 2013 to 12.949 as at the end of this reporting period. As a result of this devaluation, the total equity decreased by US$852,633 thousand as of 30 September 2014 due the exchange differences on translating foreign operations which is reflected in the translation reserve. Further details are provided in note 7 and note 16.

The Group continues to generate positive free cash flow under the lower iron ore price environment. The principal repayments under the Group's debt facilities take place in 2Q 2016 and the Group has sufficient liquidity to operate until this time. The fall in the iron ore price and the lower cash generation of the business is, however, likely to require certain debt facilities to be renewed or rolled over with extended repayment terms in order to ensure that the Group has sufficient working capital in 2016 (see note 17 for further information).

The Directors are of the view that such refinancing and or extension of debt repayment maturities will be available and as such the Directors are of the view that the Group is a going concern and the interim consolidated financial statements have been drawn up on this basis.

Changes in accounting policies

During the period ended 30 September 2014, the Group received VAT bonds issued by the Ministry of Finance of Ukraine to settle certain accumulated VAT liabilities. These VAT bonds were designated as financial assets at fair value through profit or loss ("FVTPL"). As disclosed in accounting policies in the Annual Report and Accounts 2013, the Group did not have such financial assets in previous periods.

The accounting policies and methods of computation adopted in the preparation of the interim condensed consolidated financial statements are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2013 except for the adoption of new amendments and improvements to IFRSs effective as of 1 January 2014, noted below:

Standards adopted affecting reported results, financial position or disclosures

IFRS 12 Disclosure of involvement with other entities

The new standard covers the disclosures that were previously required in consolidated financial statements under IAS 27 Consolidated and separate financial statements as well as those included in IAS 31 Interests in joint ventures and IAS 28 Investments in associates. The new standard became mandatory in the EU for financial years beginning on or after 1 January 2014. A number of additional disclosures will be required in the next Annual Report and Accounts under the new standard. There is no impact on these interim condensed consolidated financial statements to be considered. 

Standards and interpretations adopted with no effect on reported results, financial position or disclosures

IFRS 10 Consolidated financial statements

The new standard provides additional guidance to assist in the determination of which entities are controlled and are required to be consolidated. This standard replaces the portion of IAS 27 Consolidated and separate financial statements that addresses the accounting for consolidated financial statements. The new standard became mandatory in the EU for financial years beginning on or after 1 January 2014. The new standard did not have an impact on the financial position or performance of the Group.

IFRS 11 Joint arrangements

The new standard replaces IAS 31 Interests in joint ventures and SIC 13 Jointly-controlled entities - non-monetary contributions by ventures. The standard defines contractually agreed sharing of control of an arrangement and the accounting for joint operations and joint ventures. The new standard became mandatory in the EU for annual periods beginning on or after 1 January 2014. The new standard did not have an impact on the financial position or performance of the Group.

IAS 32 Financial instruments: presentation - offsetting financial assets and financial liabilities

The amendment clarifies existing application issues relating to the offset of financial assets and financial liabilities requirements. The amendment became effective for financial years beginning on or after 1 January 2014 with retrospective application. The amendment did not have an impact on the financial position or performance of the Group.

IAS 36 Impairment of assets - recoverable amount disclosures

The amendment to the standard was issued in May 2013 and became effective for financial years beginning on or after 1 January 2014. The amendment removes the requirement to disclose recoverable amounts when there has been no impairment or reversal of impairment. Further to that, the disclosure requirements have been aligned with those under US GAAP for impaired assets. The amendment did not have an impact on the financial position or performance of the Group.

IAS 39 Financial instruments: recognition and measurement - novation of derivatives and continuation hedge accounting

The amendment to the standard was issued in June 2013 and provides guidance in respect of the continuation of hedge accounting if a hedging derivative was novated. The amendment became effective for the financial years beginning on or after 1 January 2014 and did not have an impact on the financial position or performance of the Group.

Seasonality

The Group's operations are not affected by seasonality.

Note 3: Segment information

The Group is managed as a single entity which produces, develops and markets its principal product, iron ore pellets, for sale to the metallurgical industry. While the revenue generated by the Group is monitored at a more detailed level, there are no separate measures of profit reported to the Group's Chief Operating Decision-Maker ('CODM'). In accordance with IFRS 8 Operating Segments, the Group presents its results in a single segment which are disclosed in the income statement for the Group. The management monitors the operating result of the Group based on a number of measures including EBITDA, C1 costs and the net financial indebtedness.

EBITDA

The Group presents EBITDA because it believes that EBITDA is a useful measure for evaluating its ability to generate cash and its operating performance. The Group's full definition of EBITDA is disclosed in the Glossary on page 25.

C1 costs

C1 costs represent the cash costs of production of iron ore pellets from own ore divided by production volume of own ore, and excludes non-cash costs such as depreciation, pension costs and inventory movements, costs of purchased ore and concentrate and production cost of gravel.

Net financial indebtedness

Net financial indebtedness as defined by the Group comprises cash and cash equivalents, term deposits, interest bearing loans and borrowings.

Note 4: Revenue

Revenue for the nine months period ended 30 September 2014 consisted of the following:

No sales were made in Ukraine during the periods presented. Export sales of iron ore pellets and concentrate by geographical destination were as follows:

Information about the composition of the markets is provided in the Glossary.

Note 5: Cost of sales

Cost of sales for the nine months period ended 30 September 2014 consisted of the following:

Note 6: General and administrative expenses

General and administrative expenses for the nine months period ended 30 September 2014 consisted of the following:

Note 7: Foreign exchange gains and losses

Foreign exchange gains and losses for the nine months period ended 30 September 2014 consisted of the following:

Operating foreign exchange gains and losses are those items that are directly related to the production and sale of pellets (e.g. trade receivables, trade payables on operating expenditure). Non-operating gains and losses are those associated with the Group's financing and treasury activities and with local income tax payables. During the period ended 30 September 2014, the Ukrainian Hryvnia has devalued by approximately 62% compared to the US Dollar; from 7.993 as at 31 December 2013 to 12.949 as at the end of this reporting period. This has affected mainly the opening balances of property plant and equipment (note 12), income taxes recoverable and prepaid and other taxes recoverable and prepaid (note 13).

Note 8: Write-offs and impairment losses

Impairment losses relate to adjustments made against the carrying value of assets where this is higher than the recoverable amount. Write-offs and impairment losses for the nine months period ended 30 September 2014 consisted of the following:

The impairment loss on available-for-sale financial assets is related to the 15.5% equity investment in Ferrous Resources. Further information is provided in note 20.

Note 9: Finance income and expense

Finance income and expense for the period ended 30 September 2014 consisted of the following:

Other finance income includes a US$16,497 thousand release of a discount recorded in the prior years for VAT in dispute that was expected to be recovered over a protracted period of time. Further information is provided in note 13.

This discount was built up in prior periods and recorded as a finance cost. The amount recorded for the nine months ended 30 September 2013 and the year ended 31 December 2013 were US$18,000 thousand and US$3,695 thousand respectively.

Note 10: Taxation

The Group pays corporate profit tax in a number of jurisdictions and its tax rate is influenced by the mix of profits primarily between Ukraine, Switzerland and Dubai, as well as the level of non-deductible expenses for tax purposes in each of these jurisdictions. For the period ended 30 September 2014, the income tax expense was based on an expected tax rate of 24.5% for the financial year 2014, which is significantly above the effective tax rate for the financial year 2013 of 13.6%.

The increase of the tax rate during the period ended September 2014 was a result of a change in the mix of profits within the Group and significantly higher non-deductible expenses in Ukraine and Switzerland including the discount recorded on the VAT bonds sold prior to their maturity and the impairment loss recorded on an equity investment (see note 20 for further details).

During the financial years 2013 and 2014, current VAT receivable balances in Ukraine were mainly recovered in exchange for prepayments of corporate profit tax. As at 30 September 2014, the Group prepaid corporate profit tax totalling US$91,320 thousand (30 September 2013: US$85,889 thousand; 31 December 2013: US$87,514 thousand) and it is management's view that this balance will be either offset with future profits or recovered through an issuance of bonds by the Ministry of Finance as happened during the financial year 2014 for overdue VAT receivable balances (see note 13). As at the date of the preparation of these consolidated interim financial statements, there is an uncertainty as to the timing of the recovery of this balance. In light of this uncertainty, it was considered most appropriate to classify the entire balance as non-current in the consolidated statement of financial position.

Note 11: Earnings per share and dividends paid and proposed

Basic EPS is calculated by dividing the net profit for the period attributable to ordinary equity shareholders of Ferrexpo plc by the weighted average number of Ordinary Shares.

Diluted earnings per share are calculated by adjusting the weighted average number of Ordinary Shares in issue on the assumption of conversion of all potentially dilutive Ordinary Shares. All share awards are potentially dilutive and have been considered in the calculation of diluted earnings per share.

The calculation of the basic and diluted earnings per share is based on the following data:

The basic number of ordinary shares is calculated by subtracting the shares held in treasury from the total number of ordinary shares in issue.

Dividends

The interim dividends paid for 2014 and 2013 include withholding taxes of US$3,218 thousand and US$3,372 thousand paid subsequent to the periods ended 30 September 2014 and 30 September 2013 respectively.

Note 12: Property, plant and equipment

During the nine months period ended 30 September 2014, the Group acquired property, plant and equipment with a cost of US$192,668 thousand (30 September 2013: US$230,191 thousand; 31 December 2013: US$319,320 thousand) and disposed of property, plant and equipment with original costs of US$22,771 thousand (30 September 2013: US$17,358 thousand; 31 December 2013: US$32,782 thousand). The total depreciation charge for the period was US$77,350 thousand (30 September 2013: US$83,550 thousand; 31 December 2013: US$116,677 thousand).

During the reporting period, the Ukrainian Hryvnia has devalued compared to the US Dollar from 7.993 as of 31 December 2013 to 12.949 as of 30 September 2014 reducing property, plant and equipment by US$569,998 thousand. This effect is reflected in the translation reserve included in shareholder's equity. See also note 16.

Property, plant and equipment include capitalised borrowing costs on qualifying assets of US$13,811 thousand (30 September 2013: US$8,319 thousand; 31 December 2013: US$10,474 thousand).

Note 13: Other taxes recoverable and prepaid

As at 30 September 2014 taxes recoverable and prepaid comprised:

As at 30 September 2014, US$66,412 thousand of the VAT receivable before discount relates to the Group's Ukrainian business operations (30 September 2013: US$302,493 thousand; 31 December 2013: US$318,213 thousand).

The Ukrainian Hryvnia devalued compared to the US Dollar from 7.993 as at 31 December 2013 to 12.949 as at 30 September 2014 reducing the gross balance of VAT outstanding expressed in US Dollar by US$121,793 thousand and the associated provision of US$36,421 thousand by US$11,798 thousand. These net differences are reflected in the translation reserve. See also note 15.

During the second half of the financial year 2014, bonds were received by the Group with a face value of UAH1,607,101 thousand (US$135,573 thousand at the exchange rate at the date of issuance) in settlement for VAT due of the same amount. The bonds were issued by the Ministry of Finance to settle certain accumulated VAT liabilities and are tradable and mature over a period of five years in 10 equal instalments. The bonds carry a 9.5% annual coupon payable semi-annually. As at 30 September 2014, the Group had sold VAT bonds with a face value of UAH391,485 thousand at an average discount of 18.7% resulting in net proceeds of UAH318,256 thousand (US$24,594 thousand at the exchange rate at the date of sale). Subsequent to the end of the reporting period ended 30 September 2014, the remaining VAT bonds outstanding at the balance sheet date were sold resulting in additional proceeds of UAH934,544 thousand (US$72,473 thousand at the exchange rate at the date of sale). The average discount of all VAT bonds sold during the second half of the financial year 2014 was 21.8% resulting in net proceeds totalling UAH1,256,800 thousand (US$97,067 thousand at the exchange rate at the date of sale).

As at the end of the comparative period ended 31 December 2013, part of the VAT balance was in the court system and management estimated that these balances would be recovered over a protracted period of time. As a result a discount of US$23,696 thousand was recorded and charged to finance expense during the financial years 2012 and 2013. From this balance, US$16,497 was released to finance income in 2014 (note 9) with the remainder reflected in the translation reserve. As at 30 September 2014, management expect amounts in the court system to be recovered inside one year through a further issuance of bonds which will trade at a similar discount to face value and a provision of US$1,710 thousand has been recorded in the income statement to reflect this.

Note 14: Inventories

Inventories are held at the lower of cost or net realisable value. As at 30 September 2014 ore stockpiles amounting to US$69,729 thousand (30 September 2013: US$27,481; 31 December 2013: US$58,303 thousand) were classified as non-current as this ore is not planned to be processed within one year.

Note 15: Cash and cash equivalents

As at 30 September 2014 the Group held cash and cash equivalents of US$608,075 thousand (30 September 2013: US$339,219 thousand; 31 December 2013: US$390,491 thousand).

The Group's exposure to liquidity, counterparty and interest rate risk as well as a sensitivity analysis for financial assets and liabilities are disclosed in note 37 of the Annual Report and Accounts 2013. See also note 18 of these interim condensed consolidated financial statements for further information in respect of transactional banking arrangements with a related party.

Note 16: Share capital and reserves

The share capital of Ferrexpo plc at 30 September 2014 was 613,967,956 (30 September 2013: 613,967,956; 31 December 2013: 613,967,956) Ordinary Shares at par value of £0.10 paid for cash, resulting in share capital of US$121,628 thousand which is unchanged since the Group's Initial Public Offering in June 2007. This balance includes 25,343,814 shares (30 September 2013: 25,343,814 shares; 31 December 2013: 25,343,814 shares) which are held in treasury, resulting from a share buyback that was undertaken in September 2008, and 3,162,399 shares held in the employee benefit trust reserve (30 September 2013: 3,275,435 shares; 31 December 2013: 3,275,435 shares).

The translation reserve includes the effect from the exchange differences arising on translation of foreign non-US Dollar functional currency operations (mainly in Ukrainian Hryvnia). During the period ended 30 September 2014, the Ukrainian Hryvnia devalued from 7.993 as at the beginning of the year to 12.949 as at 30 September 2014 and the exchange differences arising on translation of the Group's foreign operations are initially recognised in the other comprehensive income. See also the Interim Consolidated Statement of Comprehensive Income on page 2 of these financial statements for further details. As at 30 September 2014 other reserves attributable to equity shareholders of Ferrexpo plc comprised.

Note 17: Interest bearing loans and borrowings

This note provides information about the contractual terms of the Group's interest bearing loans and borrowings which are measured at amortised cost and denominated in US Dollars.

As at 30 September 2014 the Group has a syndicated US$420 million pre-export finance facility, of which US$332.5 million is available and drawn, and a new fully drawn syndicated US$350 million pre-export finance facility. Both are revolving facilities with commitment amortisation over the final 24 months to the final maturity dates of 31 July 2016 and 8 August 2018 respectively. Subject to additional bank commitments, the new US$350 million facility can be further increased up to an amount of US$500 million within one year of the effective date, which was 8 August 2014.

As at 30 September 2014 the major bank debt facilities were guaranteed and secured as follows:

· Ferrexpo AG and Ferrexpo Middle East FZE assigned the rights to revenue from certain sales contracts;

· OJSC Ferrexpo Poltava Mining assigned all of its rights of certain export contracts for the pellets sales to Ferrexpo AG and Ferrexpo Middle East FZE; and

· the Group pledged bank accounts of Ferrexpo AG and Ferrexpo Middle East FZE into which all proceeds from the sale of certain iron ore pellet contracts are received.

In addition to the Group's major bank debt facilities listed above, an unsecured US$500 million Eurobond was issued on 7 April 2011 and is due for repayment on 7 April 2016. The bond has a 7.875% coupon and interest is payable on a semi-annual basis.

Further information on the Group's exposure to interest rate, foreign currency and liquidity risk is provided in note 37 of the Annual Report and Accounts 2013.

Note 18: Related party disclosure

During the periods presented the Group entered into arm's length transactions with entities under the common control of the majority owner of the Group, Kostyantin Zhevago and with associated companies and with other related parties. Management considers that the Group has appropriate procedures in place to identify and properly disclose transactions with the related parties.

Entities under common control are those under the control of Kostyantin Zhevago. Associated companies refer to TIS Ruda LLC, in which the Group holds an interest of 48.6%. This is the only associated company of the Group. Other related parties are principally those entities controlled by Anatoly Trefilov who is a member of the supervisory board of OJSC Ferrexpo Poltava Mining. Related party transactions entered into by the Group during the periods presented are summarised in the following tables:

Revenue, expenses, finance income and finance expenses