Financial Performance - The company reported a basic profit of $8.7 million but incurred a significant non-cash asset impairment of $163.9 million, resulting in a net loss of $156.8 million for 2023, compared to a loss of $87.9 million in 2022[46]. - Operating profit before changes in working capital was $43.3 million in 2023, down from $61.7 million in 2022, mainly due to a decrease in EBITDA[50]. - The company generated a net cash inflow from operating activities of $63.3 million in 2023, compared to a cash outflow of $32.7 million in 2022[50]. - The company reported a revenue decline of 9.2% to $253.0 million for the fiscal year ending December 31, 2023, compared to $278.8 million in 2022[66]. - Basic profit for the year was $8.7 million, a decrease of 65.1% from $25.0 million in 2022[66]. - The company recorded a net loss attributable to shareholders of $156.8 million, up 78.4% from $87.9 million in 2022, primarily due to a non-cash impairment of $163.9 million[66]. - EBITDA decreased to $45.8 million, down 18.4% from $56.1 million in the previous year[66]. - The company reported a total revenue of $252.987 million from various products and services, down from $278.757 million in 2022, a decline of 9.2%[172]. Debt and Liabilities - Total borrowings as of December 31, 2023, amounted to $67.321 million, a decrease from $78.058 million in 2022, representing a reduction of approximately 13.3%[12]. - The company has a net debt to EBITDA ratio requirement of less than 3.0 times, which has been adhered to since June 30, 2022[13]. - The debt service coverage ratio must be no less than 1.2 times, with the company having received waivers for this requirement from its major shareholder, MIC invest LLC[17]. - Total liabilities reached $85,951 thousand in 2023, up from $61,055 thousand in 2022, marking an increase of 40.6%[15]. - The net debt decreased significantly to $11.2 million by the end of 2023, down from $220.3 million in 2019, showing a substantial improvement in financial leverage[190]. - The net debt to EBITDA ratio improved from 0.74 in 2022 to 0.24 in 2023, reflecting enhanced financial stability[190]. Shareholding and Corporate Governance - The company maintained a public shareholding of 52.7% as of December 31, 2023, down from 58.5% in 2022, indicating a decrease of 5.8 percentage points[5]. - Axioma Capital FZE LLC acquired 401,812,360 shares, representing approximately 4.72% of the company's issued share capital, for a total consideration of HKD 47,413,858.48, equivalent to HKD 0.118 per share[32]. - Axioma's total shareholding increased to 30.61% post-acquisition, up from 25.89% prior to the transaction[32]. - The company confirmed compliance with the corporate governance code and has not violated any standards during the year[21]. Production and Operations - The production rate for K&S is calculated based on an annual capacity of approximately 3,155 thousand wet metric tons[38]. - Production volume fell by 4.0% to 2,467 thousand tons, primarily due to poor ore quality and mining issues[66]. - Iron ore production decreased by 4.0% to 2,466,829 tons in 2023, down from 2,569,845 tons in 2022[74]. - The company is preparing to commence mining operations at the Sutara mine in the first half of 2024[66]. - The company aims to maximize the potential of the Sutara mine and is investing significant resources to ensure its timely operation[69]. Costs and Expenses - Cash costs, excluding transportation, increased by 18.2% to $62.9 per ton due to rising operational costs[76]. - General administrative expenses before depreciation decreased by 32.6% year-on-year to $9.9 million due to the absence of one-time discretionary bonuses and payments to directors in 2023[104]. - The company recorded a total operating expenditure of $200.3 million and capital expenditure of $17.0 million in 2023, totaling $217.3 million[55]. Market Conditions and Risks - The company faced foreign exchange risk due to transactions denominated in foreign currencies, primarily the Russian ruble, and has no current hedging positions against the ruble[59]. - The average inflation rate in Russia for 2023 was approximately 7.4%, contributing to increased operational costs[98]. - The Russian ruble depreciated significantly in 2023, averaging 85 rubles per dollar, impacting the cost structure positively for K&S[101][102]. Future Outlook - The company anticipates 2024 to be the most challenging year, as it is currently in a transitional phase due to the depletion of the Kimkan mine and awaiting the start of operations at the Sutara mine[129]. - Future success depends on three key factors: successful operation of Sutara, recovery of the Chinese economy, and the ability to control operational costs[147]. - The company expresses confidence in its long-term development potential and has recently increased its shareholding to reflect this commitment[130].

Production and Sales Performance - K&S's production rate increased to 83% of design capacity, producing 1,308,821 tons of iron concentrate, a 4.0% increase year-on-year[15] - Sales volume grew by 7.6%, with 1,374,549 tons of iron concentrate sold during the reporting period[15] - Production increased by 4.0% to 1,308,821 tons, while sales rose by 7.6% to 1,374,549 tons[36] - K&S achieved a production increase of 4.0% year-over-year during the reporting period, despite operational interruptions[157] - The commercial iron concentrate production for the first half of 2023 was 1,308,821 tons, up 4.0% from 1,258,847 tons in the same period last year[158] Financial Performance - Average price of iron ore with 65% iron content was $132 per ton in the first half of 2023, a significant drop of 20.0% compared to the same period last year, leading to a 16.0% decline in revenue to $139.2 million[5] - EBITDA decreased by 45.0% to $28.9 million due to a decline in iron ore prices, despite a 7.6% increase in sales volume[41] - The company reported a net loss of $65.7 million for the first half of 2023, influenced by non-recurring items and foreign exchange[45] - Basic earnings, excluding non-recurring items and foreign exchange, were reported at $9.3 million, reflecting a 76.2% decrease from the previous year[44] - Iron ore sales revenue decreased by 16.0% to $139.2 million in the first half of 2023, compared to $165.7 million in the same period of 2022, despite a 7.6% increase in sales volume[58] - The group reported a loss of $65.7 million for the first half of 2023, an improvement from a loss of $77.9 million in the same period of 2022, mainly due to an impairment loss of $73.6 million on the carrying value of K&S and other assets[115] Cost Management - Transportation costs per ton increased by over 20%, but total cash costs per ton remained consistent with 2022 due to increased rail transport[6] - Cash costs per ton remained stable, with costs excluding delivery to customers rising by 24.6% to $59.8[36] - Cash costs (excluding transportation) increased by $11.8 per ton to $77.7 per ton in the first half of 2023, compared to $78.6 per ton in the same period of 2022[66] - The average cash cost of mining increased due to high inflation rates in Russia, particularly in electricity prices and wages[64] - The company anticipates a positive impact on costs in the second half of 2023 due to the depreciation of the ruble[178] Strategic Initiatives - The company is focusing on operational efficiency and sustainable practices to adapt to the volatile business environment caused by weak iron ore prices and inflation[4] - The Sutara mine is expected to commence operations in the first half of 2024, despite some delays in design document approvals[3] - The company is actively seeking opportunities for business and product diversification to enhance shareholder value[1] - The company plans to enhance its production capacity by potentially adding processing equipment and developing other exploration projects[11] - The company plans to continue exploring and participating in new business opportunities to mitigate risks associated with focusing on a single product[26] Market and Economic Conditions - The company faced challenges from the Russia-Ukraine conflict and global inflation, impacting production costs significantly, including nearly doubling electricity costs[6] - The strategic location of K&S allows it to serve the Chinese market effectively, benefiting from improving Sino-Russian relations[3] - The company faced challenges in the Russian market due to competition and pricing pressures, leading to minimal shipments to Russia in the first half of 2023[76] - The company will continue to monitor macroeconomic conditions and adjust its marketing strategies accordingly[76] - The group is closely monitoring the impact of sanctions from the UK, EU, and the US, which have not had a significant direct impact on operations to date[139] Corporate Governance - The management and board of directors are committed to maintaining good corporate governance to protect shareholder interests and enhance the group's performance[200] - The group believes that an open and responsible business approach, along with adherence to good corporate governance practices, can bring long-term benefits to the group and its shareholders[200] - Detailed disclosures of the company's corporate governance policies and practices can be found in the annual report for the fiscal year ending 2022[200] Employee and Operational Metrics - The group employed 1,629 people as of June 30, 2023, down from 1,773 employees a year earlier, with total employee costs amounting to $17.0 million[152] - K&S maintained a high safety level with a lost time injury rate of 2.26 during the reporting period, compared to 1 incident in the same period of 2022[138] Future Outlook - K&S aims to produce 3.2 million tons of iron concentrate with a grade of 65% annually, with the first phase of the project expected to commence mining in 2024[133] - The K&S project has a total resource of 577 million tons and a total reserve of 322 million tons, with a mine life exceeding 30 years[133] - The company is reviewing plans to advance the DSO project, which has a potential annual production of 1.9 million tons[184] - The company is actively involved in exploration projects aimed at discovering new resources and increasing confirmed exploitable reserves[186]

Impairment Loss - The company recognized an impairment loss of approximately $103.2 million for the year ended December 31, 2022[4]. - The impairment loss includes approximately $94.6 million related to the K&S mine's property, plant, and equipment[4]. - The company reported a total impairment of approximately $8.4 million for certain mining assets under construction due to lack of future construction plans[4]. - The impairment loss was recognized in the profit and loss statement for the year ended December 31, 2022[14]. - The company plans to provide additional information regarding the impairment loss for shareholders and investors[10]. - The financial results and impairment details were disclosed in the company's annual report for the year ended December 31, 2022[10]. K&S Mine Performance - The recoverable amount of the K&S mine's assets was estimated at approximately $433.3 million as of December 31, 2022, compared to a carrying amount of approximately $527.9 million[14]. - The average annual production at the K&S mine decreased from 3,176 thousand tons in 2021 to 3,126 thousand tons in 2022[6]. - The company applied the income approach for the valuation of the K&S mine, which is commonly used for mineral assets[12]. - The increase in country risk premiums in Russia and China contributed to a rise in the discount rate used for calculating the K&S mine's cash flow[11]. Economic Indicators - The average price of Platts 65% iron ore was recorded at $131 per ton, a decrease of $9 compared to December 31, 2021[16]. - The nominal pre-tax discount rate increased to 15.66% from 13.48% year-over-year, reflecting changes in market data and risk premiums[16]. - The actual pre-tax discount rate is expected to be 13.39%, up from 11.15% in the previous year, reflecting increased capital costs[16]. - The average exchange rate of the Russian ruble against the US dollar is projected to be 68 in 2023, compared to 75 in 2022[16]. - Inflation rates are expected to be 2.27% in 2023 and 2.33% in 2024, indicating a slight increase in economic pressure[16]. - The average price forecast for iron ore is set at $112.5 for 2028 and beyond, with a consistent decline expected in the short term[16]. - The average exchange rate for the ruble is projected to rise to 85 from 2025 to 2027, indicating a potential depreciation of the currency[16]. - The company anticipates continued downward pressure on iron ore prices in the short term due to market conditions[16]. - The consensus economic forecasts have been adjusted based on new assumptions regarding iron ore prices and inflation rates[17]. Miscellaneous - The company maintains that all other information in the announcement and the 2022 annual report remains unchanged[18].

Financial Performance - In the first half of 2023, the average price of iron ore with 65% iron content decreased by 20% compared to the same period last year, impacting overall performance [2]. - Despite a 7.6% increase in sales volume, total revenue fell by 16.0% from $165.7 million in the first half of 2022 to $139.2 million in the first half of 2023 [9]. - EBITDA decreased to $28.9 million, reflecting the challenging market conditions [2]. - The company reported a basic profit of $9.3 million, which is a more accurate reflection of its underlying performance, despite a reported loss of $65.7 million due to non-recurring items and foreign exchange [7][21]. - For the six months ended June 30, 2023, the company reported a loss of $65.7 million, compared to a loss of $77.9 million for the same period in 2022, primarily due to an impairment loss of $73.6 million on K&S and other assets [42]. - Revenue from external customers for the six months ended June 30, 2023, was $165.6 million, a decrease from $165.7 million in the same period of 2022 [49]. - The group reported a loss before tax of $60.4 million for the first half of 2023, compared to a loss of $80.2 million in the same period of 2022 [49]. - The net loss for the six months ended June 30, 2023, was $65,749 thousand, an improvement from a net loss of $77,942 thousand in the prior year [138]. - The basic loss per share for the period was $0.77, compared to $1.10 for the same period in 2022 [136]. Cost and Expenses - Cash costs per ton (excluding transportation) increased by $11.8 to $59.8 per ton, driven by high inflation in Russia, particularly in electricity and labor costs [12]. - The average cash cost per ton, including transportation, was $77.7, slightly lower than the previous year's $78.6 [13]. - General administrative expenses before depreciation decreased by 44.4% compared to the previous year, primarily due to one-time payments to management [18]. - Operating expenses, including depreciation, totaled $122.7 million for the six months ended June 30, 2023, slightly down from $126.9 million in the prior year [51]. - The financing costs increased by 5.6% to $4.4 million in the first half of 2023 due to rising market interest rates [54]. - The depreciation expense for the first half of 2023 was $9.8 million, a decrease of 13.3% compared to the same period in 2022 [36]. Production and Capacity - K&S maintained an average production capacity of approximately 83%, producing 1,308,821 tons of iron ore concentrate, a 4.0% increase year-on-year [23]. - The company produced 1,308,821 tons of iron concentrate during the reporting period, an increase of 4.0% year-over-year, while sales volume rose by 7.6% to 1,374,549 tons [94]. - K&S's iron ore production increased by 9.7% to 4,584,800 tons for preliminary processing compared to the first half of 2022 [191]. - K&S faced a production halt for about one week due to external power grid issues in May 2023, but managed to resolve the issue by the end of the month [186]. Impairment and Asset Management - The company recognized an impairment charge of $73.6 million for K&S and other assets during the first half of 2023, reflecting a decline in the price of iron ore [40]. - The recoverable amount of property, plant, and equipment for the K&S project was approximately $360.3 million as of June 30, 2023, down from $433.3 million as of December 31, 2022, resulting in an impairment loss of $74.306 million during the period [117]. - The company reported a net impairment loss of $73,575 thousand for the six months ended June 30, 2023, down from $112,987 thousand in the previous year [136]. Cash Flow and Liquidity - Operating cash flow for the first half of 2023 was $35.3 million, down from $47.9 million in the same period of 2022 [45]. - Cash and cash equivalents increased by $8.3 million to $45.2 million in the first half of 2023, enhancing the company's liquidity position [86]. - The company reported a cash flow hedge gain of zero for the six months ended June 30, 2023, compared to a gain of $5,656,000 in the prior year, highlighting a significant change in hedging effectiveness [1]. - Cash and cash equivalents at the end of the period were $44,930,000, down from $75,775,000 year-over-year, reflecting a decrease of approximately 40.7% [1]. Debt and Financing - The group's debt-to-equity ratio increased to 19.1% as of June 30, 2023, up from 17.4% at the end of 2022, primarily due to impairment provisions [65]. - The total debt of the group as of June 30, 2023, was $73.1 million, down from $78.5 million as of December 31, 2022, indicating a reduction in leverage [75]. - The company has pledged 2,120,000,000 shares of common stock as collateral for its borrowings, which were released on February 27, 2023 [112]. - The company’s borrowings from MIC invest LLC amounted to $72,698,000 as of June 30, 2023, down from $78,058,000 at the end of 2022, indicating a reduction in debt levels [1]. Strategic Initiatives and Future Outlook - The company is actively pursuing business expansion initiatives, including the purchase and subsequent sale of vessels, to diversify its operations and reduce risks associated with focusing on a single product [87]. - The company is focused on developing the Sutara mine, with expectations for it to commence operations in the first half of 2024, despite some delays in design document approvals [115]. - The company continues to monitor macroeconomic conditions and adjust its marketing strategies accordingly due to ongoing instability in the market [24]. - The company is actively seeking opportunities to diversify its business and product offerings to enhance shareholder value and capitalize on emerging market trends [114]. Employee and Operational Metrics - As of June 30, 2023, the company employed 1,629 people, a decrease from 1,773 employees on June 30, 2022, with total employee costs amounting to $17.0 million, down from $19.5 million in the previous year [93]. - The company maintained a high safety level with a lost time injury rate of 2.26, compared to 1.37 in the previous year, indicating a need for further safety improvements [1].

Safety and Health - The company recorded a lost time injury rate of only 0.66 per 1,000,000 hours worked in 2022, aiming for zero injury rate[12] - The company conducts annual health and safety training for all employees, ensuring compliance with Russian regulatory requirements and international best practices[8] - The company emphasizes the importance of a safe working environment, with all employees receiving health and safety training during onboarding[8] - The company has established a comprehensive industrial safety and labor protection management system to comply with labor protection and industrial safety regulations[10] - The company regularly performs risk assessments and operational safety audits to monitor and improve its operations[9] - The company conducts regular health checks for employees working in hazardous conditions to prevent occupational diseases[15] Environmental Management - The company has implemented an environmental action plan to improve environmental management efficiency and ensure the safe use of natural resources[22] - The company adheres to and often exceeds Russian legal standards and international best practices in its environmental policies[24] - The company encourages suppliers and contractors to follow its environmental and safety policies[18] - The company has designed a list of measures to achieve its environmental goals set for 2022, focusing on energy conservation and environmental safety[22] - The company is actively engaged in environmental monitoring, ensuring all data remains within regulatory limits[38] - The company has implemented measures to reduce carbon and sulfur emissions due to the lower content in hard coal compared to brown coal[44] - The company is focused on optimizing waste management and protecting biodiversity in its operational areas[56] - The company has identified and systematized sources of harmful pollutants as per new environmental regulations[68] Waste and Emissions - The total direct greenhouse gas emissions amounted to 57,856 tons, a 0.2% increase from 57,735 tons in 2021[41] - The total emissions from fixed sources increased by 8.6% to 3,923 tons in 2022 due to the development of new facilities, particularly the Kimkan West mine[64] - The total amount of inert waste generated in 2022 decreased by 3.7% to 52,143,030 tons, including 42,528,920 tons of cover layer, 2,772,770 tons of dry tailings, and 6,841,340 tons of wet tailings[80] - The company recycled 7,521,399 tons of waste in 2022, with 91% being wet tailings waste[85] - The total hazardous waste generated in 2022 was 3,257 tons, with a density ratio of 0.001 tons/ton[83] - The efficiency of industrial emissions treatment at the heating plant was 94%[67] - The company implemented energy-saving measures at the 10 MW heating plant, reducing coal usage during summer[66] Water Management - Water intake in 2022 was 1,082,165 cubic meters, an increase of 148,880 cubic meters from 2021, with 1,080,378 cubic meters sourced from natural water bodies[101] - The technical water consumption per ton of iron concentrate produced was 0.421 cubic meters in 2022, slightly increasing from 0.357 cubic meters in 2021[105] - The company’s actual wastewater discharge in 2022 was only 39.82% of the permitted discharge volume of 682,020 cubic meters, indicating a low risk of exceeding permitted levels[104] - The total recycled water provided to the processing plant from tailings storage facilities in 2022 was 8,577,800 cubic meters, an increase of 3.74% from 2021[108] - The company aims to prevent water pollution during production activities, with no significant changes detected in surface and groundwater quality in 2022[106] - The company’s water consumption for clean drinking water increased by 14,782 cubic meters in 2022 due to the return of personnel to workplaces post-COVID-19[101] Financial Performance - In the fiscal year 2022, the company reported revenues of $278.8 million and an EBITDA of $56.5 million, excluding non-recurring items and foreign exchange[157] - The total cash cost per ton, excluding transportation, was $53.2, representing a 24.9% increase compared to the previous year[157] - The company experienced a net loss of $87.9 million during the year, primarily due to a non-cash impairment provision of $103.2 million[157] - The company reported a basic profit of $25.0 million for the year 2022, demonstrating strong financial performance despite a challenging business environment[164] - EBITDA decreased by 66.9% to $56.5 million in 2022 due to reduced revenue and increased cash costs[188] - The company reported a net loss attributable to shareholders of $87,896, compared to a profit of $134,069 in the previous year, representing a 165.6% decline[195] Production and Operations - In 2022, the production volume reached 2,569,845 tons, slightly up from 2,557,794 tons in 2021[43] - The company sold 2,566,480 tons of iron ore, an increase of 0.5% compared to 2,553,804 tons in 2021[198] - The K&S mine is projected to achieve an annual capacity of 3.2 million tons of iron ore, producing high-grade iron concentrate with a 65% iron content[153] - The company plans to start mining at the Sutara mine in the second half of 2023, with expectations of higher production levels due to its high magnetic iron ore content[170] - The company faced operational challenges due to mining issues and railway congestion, which negatively impacted profit margins in Q4 2022[164] Employee and Social Responsibility - The total number of employees in 2022 was 1,804, a 2% increase from 1,767 in 2021[134] - The female employee ratio in 2022 was 29.7%, consistent with previous years[134] - The company released over 15,000 juvenile Amur sturgeon and salmon into the Amur River basin in 2022, with a total cost exceeding $29,280[120] - The health, safety, and environment committee consists of three independent non-executive directors, ensuring compliance with health and safety regulations[130] - The company implemented various biodiversity conservation measures, including forest fire prevention strategies in 2022[116] Market and Economic Outlook - The company anticipates that the macroeconomic environment will be influenced by slow growth, high inflation, and rising interest rates[164] - The ongoing geopolitical tensions and economic volatility are expected to impact iron ore demand and pricing[188] - The company is focused on diversifying risks and establishing new revenue sources to enhance growth opportunities[169] - The company believes that its business model and strategies will continue to enhance shareholder value despite external challenges[174] - The company is actively seeking to diversify its investment opportunities to expand its business portfolio, including the purchase and sale of vessels in Q1 2023[170]

Financial Performance - Basic profit reached $25 million for the year 2022, while the net loss after asset impairment was $88 million[2]. - The company reported a basic profit of $25.0 million for 2022, demonstrating strong financial performance despite a challenging business environment[58]. - EBITDA, excluding extraordinary items and foreign exchange, decreased by 66.9% to $56,514,000 in 2022[27]. - Basic earnings, excluding extraordinary items and foreign exchange, fell by 80.1% to $24,954,000 in 2022[28]. - The company reported a loss before tax of $88.540 million compared to a profit of $134.103 million in 2021[157]. - The group recorded a basic and diluted loss per share of $(87,896,000) for the year ended December 31, 2022, compared to a profit of $134,069,000 in 2021[180]. Production and Sales - Iron ore production was 2,569,845 tons in 2022, a slight increase of 0.5% compared to 2,557,794 tons in 2021; sales volume also increased by 0.5% to 2,566,480 tons[5]. - Iron ore production for 2022 was 2,569,845 tons, representing an 81% capacity utilization and a 0.5% increase from the previous year[29]. - In 2022, the company's sales and production volumes increased by 0.5% compared to the previous year, indicating a stable performance despite challenges[98]. Revenue and Pricing - The average price of iron ore with 65% iron content dropped by 25.3% to $139 per ton in 2022 from $186 per ton in 2021[5]. - The realized selling price for iron ore in 2022 was $118 per dry ton, a decrease of 25.8% compared to the previous year[7]. - The realized iron ore selling price dropped by 27.6% to $118 per dry ton in 2022 compared to $163 per dry ton in 2021[32]. - Total revenue for 2022 was $278.757 million, a decrease of 25% from $371.279 million in 2021[157]. - Revenue from iron concentrate sales was $274.598 million, down from $369.173 million in 2021, representing a decline of 25.5%[157]. - Revenue from external customers in China was $251.198 million, a decrease of 29.5% from $356.003 million in 2021[157]. Costs and Expenses - The cash cost per ton increased to $28.2 in 2022 from $21.5 in 2021, reflecting higher operational costs[17]. - The overall cash cost increased from $71.7 per ton in 2021 to $78.8 per ton in 2022, driven by higher shipping costs and mining expenses[22]. - Operating expenses for K&S in 2022 totaled USD 213.1 million, compared to USD 192.5 million in 2021[76]. - Operating expenses, excluding depreciation, increased to $227.700 million from $202.786 million, reflecting a rise of 12.3%[157]. Impairment and Asset Management - The company recorded an impairment loss of $103.2 million related to K&S mining assets due to weak iron ore prices and other economic factors[10]. - The company recognized an impairment loss of $103.169 million in 2022, with no impairment loss reported in 2021[157]. - The K&S project's recoverable amount was approximately $433.3 million as of December 31, 2022, leading to an impairment loss of $94,621,000 during the period[172]. Debt and Financial Position - The net debt to EBITDA ratio for the company was 0.36 in 2022, indicating a stable financial position[54]. - The company’s net debt decreased from $61.1 million at the end of 2021 to $41.6 million at the end of 2022, reflecting improved liquidity[102]. - As of December 31, 2022, total borrowings amounted to USD 78.5 million, a decrease from USD 113.2 million as of December 31, 2021[77]. - The company repaid $34.7 million in principal loans during the year, with $19.0 million coming from a debt-to-equity swap with its main lender[72]. - The company’s weighted average interest rate increased to 8.48% in 2022, up from 7.0% in 2021[53]. Market Conditions and Outlook - The outlook for 2023 remains uncertain, but the market is gradually recovering, with expectations of fruitful results from the Sutara mine and the Amur River Bridge operations[3]. - The company plans to continue monitoring market conditions and adjust its sales and marketing strategies accordingly[14]. - The demand for iron ore remains uncertain as China's economic recovery post-COVID-19 is still unclear, with the steel industry in China continuing to operate under low-profit margins[131]. - Geopolitical risks related to the Ukraine crisis continue to adversely affect the global economic situation, influencing the company's outlook[86]. Strategic Initiatives - The company plans to start mining at the Sutara site in the second half of 2023, as the Kimkan site is nearing depletion[87]. - The company plans to utilize the newly opened Amur River Bridge to transport more products to Chinese customers, reducing delivery time from 3-5 days to 1-3 days[124]. - The company is actively seeking diversification opportunities, including potential ship purchases in Q1 2023, to mitigate risks and establish new revenue sources[88]. - The company emphasizes the importance of completing the Sutara development to maintain continuous production despite external threats and challenges[132]. Employee and Operational Metrics - As of December 31, 2022, the company employed 1,804 staff, with total employee costs amounting to $35.7 million, an increase from $28.3 million in 2021[56]. - The company faced challenges in Q4 2022 due to a difficult operating environment, impacting profit margins and necessitating a temporary reduction in operational scale[85]. - The company has successfully resolved mining issues through constructive discussions with contractors, improving production efficiency[96].

Financial Performance - EBITDA for the first half of 2022 was approximately $52 million, with a basic profit of about $39 million[14]. - The total impairment loss for the group amounted to approximately $113 million, resulting in a net loss of about $78 million for the first half of 2022[10]. - Revenue decreased by 23.7% to $165,658 thousand from $217,170 thousand year-on-year[26]. - The company reported a loss attributable to owners of $77,885 thousand, a significant decline from a profit of $98,271 thousand in the previous year[26]. - The company reported a loss before tax of $(80,173) thousand, compared to a profit of $97,964 thousand in the same period last year[134]. - The net loss for the period was $(77,942) thousand, a significant decline from a profit of $98,230 thousand in the previous year[137]. - Basic and diluted loss per share was $(1.10), compared to earnings of $1.39 per share in the prior year[134]. - The total comprehensive loss for the period was $(71,452) thousand, compared to a comprehensive income of $91,878 thousand in the same period last year[137]. Production and Sales - In the first half of 2022, K&S operated at slightly above 80% capacity, producing approximately 1.3 million tons of high-grade iron concentrate[10]. - Iron ore production decreased by 4.0% to 1,258,847 tons compared to 1,310,718 tons in the same period last year[26]. - K&S shipped 1,277,048 tons of iron concentrate in the first half of 2022, maintaining sales levels similar to the previous year despite logistical challenges[80]. - Sales volume of iron ore fell by 1.8% to 1,277,048 tons from 1,300,045 tons year-on-year[26]. - The realized selling price based on wet metric tons dropped by 22.3% to $129.7 from $167.0 in the previous year[26]. Costs and Expenses - Cash costs per ton, including transport to customers, increased by 19.8% to $78.6 from $65.6[26]. - Operating expenses (excluding depreciation and amortization) increased to $(115,561) thousand, up 23% from $(93,925) thousand in the prior year[134]. - General and administrative expenses rose to $10.104 million from $5.501 million, marking an increase of approximately 83.5%[173]. - The company reported a significant increase in transportation and freight costs, which rose to $38.837 million from $29.823 million year-over-year[173]. Cash Flow and Debt Management - Cash and deposit balance increased to approximately $77 million, while net debt decreased sharply to about $26 million as of June 30, 2022[14]. - Financing costs decreased by 61.5% to $4.2 million in the first half of 2022, attributed to a reduction in loan balance after a voluntary early repayment of $70 million in 2021[55]. - The company’s cash and bank balances increased to $76.9 million as of June 30, 2022, compared to $52.1 million at the end of 2021, due to strict cash management measures[67]. - Total borrowings as of June 30, 2022, amounted to $102.9 million, down from $113.2 million as of December 31, 2021[71]. - Net debt significantly reduced to $26.0 million as of June 30, 2022, enhancing the company's ability to withstand interest rate fluctuations[71]. Market Conditions and Challenges - The average Platts 65% iron ore index for the first half of 2022 was $165 per ton, a 22% decrease from $211 per ton in the same period last year[13]. - The inflation rate in Russia reached 14.2% in the first half of 2022, significantly impacting operational costs for K&S[14]. - K&S faced operational challenges due to railway congestion and geopolitical tensions affecting transportation demand[10]. - The company is exploring alternative shipping routes and expanding local sales to mitigate the impact of external challenges[10]. Future Plans and Developments - The company plans to enhance production capacity by potentially adding processing equipment for the K&S project and developing other exploration projects[6]. - The company is preparing to commence operations at the Sutara mine, expected to improve production capacity in the second half of 2023[20]. - The estimated initial capital expenditure to bring the Sutara mine into operation is approximately $49.2 million, with $14.6 million already incurred as of June 30, 2022[63]. - K&S is evaluating options to upgrade its first-phase production facility to increase annual capacity to approximately 4.6 million tons[77]. Regulatory and Governance - The company adhered to the corporate governance code as per the listing rules during the reporting period[123]. - The board of directors confirmed compliance with the standard code of conduct regarding securities trading[123]. - The audit committee reviewed the unaudited interim results for the six months ending June 30, 2022, with discussions held with the management[124]. Employee and Operational Metrics - Employee costs totaled $19.5 million for the reporting period, compared to $13.7 million for the same period in 2021, with a workforce of 1,773 employees[73]. - K&S reported a lost time injury rate of 1.37 per million hours worked, compared to 0.7 in the same period of 2021, with one injury incident and no fatalities reported[88]. - K&S has established an emergency office to prevent the spread of COVID-19, implementing necessary measures without significant operational impact from the pandemic[88].

Financial Performance - In the fiscal year 2021, the company achieved a revenue of $382.1 million, representing a significant increase compared to previous years[8] - The basic EBITDA for 2021 rose by 114% to $171 million, indicating strong operational performance despite challenges[13] - The basic profit for the year was $125.3 million, marking a 33.3% increase year-over-year[8] - The company reported a net profit of $134.1 million for the year, demonstrating effective cost management and operational efficiency[8] - Basic earnings increased to $125 million, five times last year's figure, representing nearly two-thirds of the company's current market value[15] - The company reduced its net debt from $184 million at the end of last year to $61 million by the end of 2021, enhancing financial strength[15] - The total revenue for the year was $371.3 million, reflecting a 65.3% increase from $224.6 million in 2020[28] - The company reported a net profit attributable to shareholders of $134.1 million, a 33.3% increase from $100.6 million in 2020[28] - The group achieved a significant improvement in basic EBITDA, reaching $170.6 million in 2021, compared to $79.7 million in 2020, driven by strong iron ore prices and stable production rates[87] - The company reported a profit of $134.1 million for 2021, an increase from $100.6 million in 2020, driven by EBITDA growth and a reduction in financing costs[69] Production and Sales - The company produced and sold 2.6 million tons of high-grade iron concentrate in 2021, showcasing its production capabilities[13] - Iron ore production for the year ended December 31, 2021, was 2,557,794 tons, a decrease of 6.9% from 2,747,767 tons in 2020[28] - K&S's iron ore production in 2021 was 2,557,794 tons, representing 81% of its capacity, a decrease from 2020 due to poor performance from third-party contractors and lower ore quality[38] - The realized sales price for iron ore was $145 per ton, with a significant increase of 66.7% compared to $87 per ton in 2020[28] - K&S's sales volume for the reporting period was 2,553,804 tons, remaining flat compared to the previous year[98] Cost Management - The net cash generated from operating activities was $166.3 million, reflecting robust cash flow management[8] - Cash costs per ton, including transport to customers, increased to $71.7, up 40.0% from $51.2 in 2020[28] - The cash cost per wet ton of iron ore sold in 2021 was $71.7, a 40.0% increase from $51.2 in 2020, driven by higher mining and transportation costs[54] - The cash cost rose to $71.7 per ton in 2021 due to increased mining and transportation costs, despite strict cost management[90] - Administrative expenses, excluding depreciation and amortization, were $10.3 million in 2021, compared to $9.2 million in 2020, indicating effective cost control measures[87] Market Conditions - The average price of Platts 65% iron ore increased by 53% year-on-year to $186 per ton in 2021, with a peak of $260 per ton in May 2021[18] - The average price of iron ore in 2021 was $186 per ton, a 52.5% increase compared to $122 per ton in 2020[38] - The premium for high-grade iron ore continues to rise, with the price gap for 65% iron ore averaging $28 per ton at the beginning of 2022[18] - The iron ore market has seen a rise of over 20% since the beginning of 2022, with the Platts 65% iron ore index currently around $170 per ton[18] Strategic Initiatives - The company plans to enhance its production capacity by adding processing equipment and developing other exploration projects[6] - The company plans to develop the Sutara mine, expected to commence operations by the end of 2022 or early 2023, to boost production levels[18] - The company aims to achieve three main goals in 2022: reduce debt-to-equity ratio, develop Sutara, and provide dividend returns to shareholders[24] - The anticipated Amur River Bridge, expected to be operational in 2022, will further enhance transportation efficiency for the group and its customers[95] - The company is exploring new transportation routes to China via Zaibalkalsk and Manzhouli to enhance sales terms[45] Safety and Compliance - The company reported a low lost-time injury rate of 0.35, indicating effective safety management systems[24] - The group has implemented various systems and standards to ensure compliance with safety regulations, achieving a lost time injury rate of 0.35 in 2021, consistent with 2020[87] - The company has established an emergency office to prevent the spread of COVID-19, implementing necessary organizational and administrative measures[90] - K&S is facing two administrative violation lawsuits due to operating without proper permits and failing to comply with RTN's directives, with potential fines and operational suspensions[109] Human Resources - The group employed approximately 1,696 employees as of December 31, 2021, compared to 1,665 employees on December 31, 2020, with total employee costs amounting to $28.3 million in 2021, up from $26.6 million in 2020[84] - The company employed a total of 1,767 employees in 2021, representing a 4% increase from the previous year[180] - The employee turnover rate for the company in 2021 was 17%, with 301 employees leaving, which is higher than the mining industry average[191] - The company aims to create job opportunities and provide competitive wages and a safe working environment[199] - The company emphasizes professional and personal development opportunities for employees[200] Environmental, Social, and Governance (ESG) - The company emphasizes its commitment to environmental, social, and governance (ESG) responsibilities across all operational stages[158] - The company has established specific environmental, social, and governance (ESG) goals and deadlines, which are monitored by the board of directors[167] - The company is committed to gender equality in hiring practices and does not tolerate any form of gender discrimination[180] - The company aims to provide safe and healthy working conditions, rational use of natural resources, and conservation of the environment for future generations[171]

Financial Performance - IRC Limited achieved a record profit attributable to shareholders of $98 million in the first half of 2021, which is nearly half of the company's current market value[7]. - Revenue increased over 100% to $217 million in the first half of 2021, with EBITDA rising approximately threefold to $123 million compared to the same period last year[8]. - The company achieved a net profit attributable to shareholders of $98.3 million, a significant increase of 1,554.1% from $5.9 million in the same period of 2020[20]. - Basic earnings per share reached 1.39 cents, compared to 0.08 cents in the previous year, reflecting a growth of 1,554.0%[20]. - Profit before tax surged to $97,964,000, compared to $6,372,000 in the prior year, marking a significant increase of 1,438.5%[113]. - Total comprehensive income for the period was $91,878,000, compared to $7,300,000 in the previous year, an increase of 1,157.5%[115]. Revenue and Sales - Revenue for the six months ended June 30, 2021, was $217,170,000, representing a 104.5% increase from $106,173,000 in the same period of 2020[113]. - Revenue from iron ore sales was $215,772,000, while delivery services contributed $1,298,000 and engineering services added $100,000[142]. - The revenue breakdown by region shows that China accounted for $204,365,000 and Russia contributed $12,805,000[142]. - Sales volume for the same period was 1,300,045 tons, down 5.8% from 1,380,516 tons in 2020[20]. Production and Capacity - The company reported iron ore production of 1,310,718 tons for the six months ended June 30, 2021, a decrease of 6.1% compared to 1,395,411 tons in the same period of 2020[20]. - K&S operated at an average capacity of 84% in the first half of 2021, despite facing challenges such as operational issues with third-party mining contractors and railway congestion[12]. - K&S aims to increase its annual production capacity to approximately 4.6 million tons through upgrades to the first-phase production facility[71]. - The total resources at K&S are estimated at 784 million tons, with total reserves of 364 million tons and a mine life exceeding 30 years[70]. Costs and Expenses - Cash costs rose to $65.6 per ton, an increase of 34.4% from $48.8 per ton in the previous year[20]. - The company's operating expenses and general administrative costs increased by 24.2%, significantly lower than the revenue growth of 104.5%[24]. - Mining operating expenses and service costs increased to $100,328,000 in the first half of 2021 from $84,709,000 in the same period of 2020, representing an 18.4% rise[156]. Cash Flow and Financial Position - Cash and deposits at the end of the first half of 2021 stood at $67 million, with a focus on maintaining a strong financial position and prudent management of financial risks[8]. - The net cash generated from operating activities for the first half of 2021 was 86.4 million USD, a threefold increase from 20.3 million USD in the same period of 2020[57]. - The company reported a significant increase in cash flow, with cash and cash equivalents rising to $66,687,000 from $20,371,000, an increase of 228.5%[118]. - Total liabilities decreased to $(287,619,000) from $(298,835,000), reflecting a reduction of 3.9%[120]. Strategic Initiatives - The company is exploring conditions necessary for dividend payments to shareholders, emphasizing dividends as a priority for long-term shareholder returns[9]. - The ongoing construction of the Amur River Bridge is expected to provide new delivery points for customers in China, enhancing logistics capabilities[2]. - K&S is diversifying sales to southern maritime customers in China to mitigate the impact of railway congestion, which was alleviated in July 2021[14]. - The company is exploring new transportation routes to China through the Zabaikalsk-Manzhouli border crossing to enhance sales strategies[34]. Market Conditions - The realized hedge pre-sale price for iron ore was $186 per ton, up 118% year-on-year, reflecting strong market conditions despite global economic challenges[9]. - The industry standard price for iron ore with 65% iron content surged 44% since the beginning of the year, reaching over $260 per ton in mid-May 2021, the highest since the company was listed in 2010[12]. - The average price of 65% iron ore was $211.1 per ton, up 99.5% from $105.8 per ton in 2020[20]. Compliance and Governance - The company has confirmed compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations[103]. - The management and board are committed to maintaining good corporate governance to safeguard shareholder interests and enhance group performance[103]. - The company is committed to implementing measures to address administrative violations and ensure compliance with regulations[82]. Shareholder Information - As of June 30, 2021, major shareholder Petropavlovsk PLC holds a 31.10% stake in the company, equating to 2,205,900,000 shares[98]. - The company issued 1,328,000 new shares at an exercise price of 0.296 HKD per share, raising approximately 0.05 million USD during the first half of 2021[106].

Financial Performance - The company reported a revenue of $236.4 million for the fiscal year 2020, with an EBITDA of $79.7 million excluding non-recurring items and foreign exchange effects[7]. - The company achieved a net cash flow from operating activities of $62.9 million, representing a significant increase of over 100%[7]. - The company achieved a basic profit of $24.2 million, recovering from a loss of $21.0 million last year[14]. - Revenue reached $224.6 million, representing a significant growth of 26.8% compared to the previous year[14]. - The company recorded a net profit of $100.6 million for 2020, a substantial improvement from the previous year's performance[14]. - EBITDA (excluding non-recurring items and foreign exchange) increased to $79.7 million, more than doubling from 2019[14]. - The company reported a profit of $100.6 million, a significant turnaround from a loss of $38.7 million in 2019, driven by an increase in EBITDA and foreign exchange gains[63]. - The net cash generated from operating activities was $62.9 million in 2020, up 93.9% from $32.4 million in 2019, primarily due to increased revenues from the K&S mine[67]. - The total borrowings of the company decreased to $203.9 million as of December 31, 2020, from $224.6 million in 2019, reflecting a reduction in financing costs[77]. - Financing costs fell by 13.1% to $25.2 million in 2020, attributed to a decline in the London Interbank Offered Rate (LIBOR)[59]. Production and Sales - Iron ore sales volume reached 2.6 million tons, while production was 2.7 million tons, indicating a strong operational performance[7]. - The company reported iron ore production of 2,747,767 tons for the year ended December 31, 2020, an increase of 10.1% from 2,496,600 tons in 2019[26]. - Sales volume for the same period was 2,576,722 tons, up 4.6% from 2,464,401 tons in 2019[26]. - K&S's sales volume increased by 4.6% to 2,576,722 tons in 2020, despite logistical issues caused by traffic congestion on Russian railways[36]. - The company produced 2,747,767 tons of iron concentrate in 2020, representing a 10.1% increase compared to 2019[199]. Cost and Pricing - The cash cost per ton was reported at $51, with a realized selling price of $100 per dry ton, reflecting a 14.9% increase[7]. - The average realized price for iron ore based on dry metric tons was $100, a 14.9% increase from $87 in the previous year[26]. - The average price of Platts 65% iron ore was $122 in 2020, an increase of 17.3% from $104 in 2019[26]. - The cash cost per ton decreased by 2.8% to $51.2, down from $53 in 2019[30]. - The unit cash cost per ton was $51 in 2020, with potential for further cost control as full capacity is reached[104]. Safety and Environmental Impact - The company reported a lost time injury rate of 0.35, demonstrating a commitment to operational safety[7]. - Greenhouse gas emissions were recorded at 65.7 thousand tons, with a reduction of 4.6% compared to previous periods[7]. - The lost time injury frequency rate improved significantly, decreasing by 66% to 0.35 in 2020 from 1.04 in 2019[87]. - The company is committed to providing cleaner, more sustainable resources to meet the growing demand for iron ore[18]. - The company has maintained low levels of water intake and discharge while increasing the reuse of water[166]. Strategic Plans and Developments - The company aims to increase production capacity at the K&S mine to 3.2 million tons per year, with a long-term plan to add processing equipment and develop other exploration projects[5]. - Future expansion plans include new delivery points for Chinese railway customers, enhancing logistics capabilities[2]. - The company plans to develop the Sutara mine, with production expected to commence by the end of 2022 or early 2023[23]. - The company plans to continue reducing debt levels and accumulating cash to strengthen its financial position[14]. - The Amur River Bridge is expected to enhance logistics efficiency by reducing transportation distance to major customers once operational in 2022[18]. Customer Relationships and Market Position - The company has established long-term customer relationships in China and Russia, leveraging its competitive advantages in the iron ore market[4]. - The company is diversifying its customer base by selling to southern China and utilizing maritime routes to mitigate market challenges in northeastern China[40]. - The average realized price for iron ore before hedging was $100 per dry ton in 2020, up 14.9% from $87 per ton in 2019[41]. Human Resources - The average number of employees in 2020 was 1,700, a decrease of 3.4% from the previous year[185]. - The employee turnover rate was 20% in 2020, with 346 employees leaving the company, which is higher than the industry average[198]. - Labor productivity per ton of iron concentrate rose by approximately 13.9% in 2020, attributed to increased employee engagement and reduced downtime for maintenance[200]. - The average salary in 2020 increased compared to 2019, contributing to higher labor productivity[200]. Resource and Reserve Estimates - The company reported total resources of 1,353 million tons and reserves of 390 million tons as of year-end 2020, compared to 1,410 million tons and 372 million tons in 2019[87]. - K&S total resources amount to 783.7 million tons with an average iron grade of 31.2%, containing 244.9 million tons of iron[150]. - The total reserves for K&S were reported at 363.6 million tons with an average iron grade of 30.1%[140]. - The total inferred resources for K&S amount to 434.5 million tons with an average iron grade of 30.1%, containing 131.0 million tons of iron[150].