Page 61 - UKRRptSept18

59% m/m to $68mn in May. Metinvest’s taxes paid skyrocketed to $95mn from $4mn in April, while interest paid jumped to $79mn from $21mn in April. The holding reported a cash outflow from investment activities of $68mn (vs. an inflow of $129mn in April). Metinvest’s cash outflow from financing activities amounted to $200mn and its end -May cash balance crashed 58% m/m to $268mn. "Metinvest’s business remained strong in May, with prices increasing m/m for semi-finished products (pig iron 4%, slabs 3%, billets 9%) and dropping slightly, by 1%, for finished products," Dmytro Khoroshun at Kyiv-based brokerage Concorde Capital wrote in a note on August 29. The outsized $95mn tax payment is due to profit tax payment for the previous year (a regular May occurrence), whereas the abnormally large $75mn interest payment is likely a one-off due to the debt restructuring that was finalied in April, he added. Concorde also believes that the risks of Metinvest declaring and paying large amounts of dividends, but do not see signs of this in the holding’s May report. "Indeed, the $200mn financing outflow includes a $141mn PXF loan prepayment and therefore is unlikely to include any sizable dividend payments," Khoroshun wrote in the note.
Ukraine's largest steel pipe producer Interpipe increased its pipe production by 21.3% year-on-year to 452.1 tonnes in January-July, according to estimates published by Kyiv-based brokerage Concorde Capital on August 20. Interpipe produced 2.28 tonnes of pipes per day (or 70.7 tonnes per month) in July, a 0.6% month-on-month increase in average daily terms. Interpipe NTRP pipe production dropped 2.9% m/m to 0.85 tonnes per day in July. Interpipe NMPP output jumped 51.3% m/m to 0.36 tonnes per day. Interpipe Niko Tube output decreased 7.1% m/m to 1.07 tonnes per day during the same period.
Ferrexpo daily pellet output slides 3% m/m in July. Ukraine’s largest iron ore pellet exporter Ferrexpo produced 912 kt of pellets in July, which amounts to 29.4 kt per day, a 3.0% m/m decrease, Interfax-Ukraine reported on August 16. During 7M18, Ferrexpo’s pellet output amounted to 6.0 mmt, a 2.0% y/y increase. “The 2% y/y increase in the year-to-date dynamic (vs. a 1.2% decrease for the first half of 2018) might ease in August because in July 2017, Ferrexpo’s output was very weak at only 751 kt (23.6 kt per day),” Dmytro Khoroshun of Concorde Capital said in a note. “We expect Ferrexpo to produce 10.5-10.8 mmt of pellets in 2018, resulting in 29-30 kt per day and a 1-3% y/y gain. We retain our neutral view on FXPOLN Eurobonds.”
Ferrexpo Poltava Mining (FPM), a subsidiary of Ukraine’s largest iron ore pellet exporter Ferrexpo, won its case in the Kyiv Appellate Economic Court to boost its claim against Finance & Credit bank to UAH3.9bn ($146mn), according to oligarh.media, reports Concorde Capital. The court’s decision, which was made on July 18, is not yet available in Ukraine’s registry of court decisions. Recall in October 2017, FPM lost the first-instance court hearing in, which it wanted to boost its claim against Finance & Credit bank, which was declared insolvent in September 2015 to UAH3.9bn ($146mn) from UAH485mn ($18.1mn).
61 UKRAINE Country Report September 2018 www.intellinews.com