Page 74 - UKRRptMay19

of the recent upgrade of one of Ilyich Steel’s casting machines, Metinvest demonstrated strong steel production volumes in the first quarter of 2019, averaging 21.5 tonnes per day. Using the same rate for the remainder of the current year, we are cautiously upgrading our forecast for Metinvest’s 2019 steel production to 7.85mn tonnes, up 7% y/y, but still below management’s recent guidance for 2019 of 8.32mn tonnes (up 14% y/y).
EBITDA at Ukraine’s largest steelmaker Metinvest (METINV) jumped 22.3% m/m in January to $126mn, according to its monthly results published on Apr. 11. The holding’s revenue lost 7.0% m/m to $900mn. Metinvest’s operating cash flow before working capital changes plunged 24.2% m/m to $116mn, whereas cash flow from operations (before profit tax and interest) jumped 66% m/m to $13mn in January. The holding reported a net cash outflow from investment activities of $90mn (vs. an inflow of $28mn in December). Metinvest’s cash outflow from financing activities amounted to $60mn and its end-of-month cash balance dropped 20.4% m/m to $223mn. The holding’s gross debt dropped $20mn m/m to $2,723mn. Metinvest’s metallurgical segment EBITDA rose to $18mn in January (vs. $-9mn in December), while its mining segment EBITDA lost 12.4% m/m to $99mn.
Ukraine’s largest steel producer, Metinvest (METINV), is planning to launch on Apr. 9 three hot-blast stoves at blast furnace No. 3 at its Azovstal factory, according to an Apr. 9 report by mariupolnews.com.ua, a news site. Metinvest has been reconstructing BF No. 3 at Azovstal since 2017. The hot iron capacity of BF No. 3 will increase as a result of the project by 0.5- 0.8mmt per year to 1.3-1.6mmt per year. The total CapEx is expected to amount to $70-75mn. After the launch of Azovstal’s BF No. 3, Metinvest was planning to shut down BF No. 6 at Azovstal (annual hot iron capacity of about 1mmt per year) for a three-year upgrade.
● Interpipe
Ukraine’s largest pipe producer Interpipe (INPIP) secured 100% lender consent for a restructuring proposal and plans to finish the restructuring by June 30, according to Reorg Research, a distressed debt information provider. In addition to details previously reported by Reorg Research and by Debtwire, in its Apr. 8 report Reorg Research said, citing its sources, that the fees to be paid on the restructuring will be large, consisting of the interest accumulated starting February 2018 for bondholders and starting November 2017 for other creditors at LIBOR+8%. Reorg Research also said that the threshold for a share pledge enforcement was recently lowered to 66.6% from 75%.
Pipe production at Ukraine's largest steel pipe producer Interpipe increased by 6.4% year-on-year to 197.4 tonnes in January-March, according to calculations of Kyiv-based brokerage Concorde Capital published on April 15. The company's pipe output stood at 2.48 tonnes per day (or 77 tonnes per month) in March, a 24% month-on-month jump.Interpipe NTRP pipe production jumped 29.6% m/m to 0.82 tonnes per day in March. Interpipe NMPP output inched up 0.6% m/m to 0.38 tonnes per day. Interpipe Niko Tube output gained 29.2% m/m to 1.29 tonnes per day. Concorde Capital’s Dmytro Khoroshun expects the 2019 pipe production volume at Interpipe to drop 7% y/y to 700 tonnes, or 1.92 tonnes per day. "However, we note that the 2.48 kt daily pipe production rate in March was the highest since July 2014, and we see upside risks to our volume forecast because of recent oil price gains," he wrote in a note on April 15.
74 UKRAINE Country Report May 2019 www.intellinews.com