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quarter of 2021. EBITDA loss of its pipe segment widened 49% y/y to negative $6.9mn in the first quarter of 2021. EBITDA of Interpipe’s steel segment soared 70% y/y to $35.1mn in the first quarter of 2021.
The company’s net operating cash flow skyrocketed 3.1x y/y to $20.8mn in the first quarter of 2021, while its CapEx jumped 58% y/y to $17.3mn. Free cash flow was positive $4.2mn in the first quarter of 2021, compared with negative $3.6mn a year ago.
At end-the first quarter of 2021, Interpipe’s gross debt amounted to $110mn and its net debt amounted to $53mn (net debt/L12M EBITDA 0.2x).
Interpipe declared and paid $40mn in dividends in March, $150mn in May, and plans to pay a further $40mn in dividends later in 2021, according to the company management statements made on a call with investors on the same day. Interpipe had about $200mn of cash in the beginning of June, and plans to spend about $84-86mn in total on CapEx in 2021, including about $23mn on maintenance and $60mn on development. Interpipe plans to spend about $207mn in total on development CapEx during the next five years, its management said, adding that maintenance CapEx is seen at $25-27mn per year. The company’s policy is to maintain at least $80mn in cash on its balance.
The release of provisions contributed positive $11mn to Interpipe’s total EBITDA in the first quarter of 2021, including $15mn to pipe segment EBITDA, according to its management statements on the call.
As of now, Interpipe does not does not foresee the recent political tensions around Belarus as resulting in any additional barriers to its railway product exports to that country, the management said, adding that railway product total sales volume has returned to the levels of 15 kt per month typical before the imposition of the Russian embargo in early February. Interpipe expects railway product sales volume to return to pre-covid level in 2H21, whereas the similar rebound for pipe sales volume might take longer.
The fast and steep increase in prices of input materials, including steel scrap and energy sources during the first quarter of 2021 was an important factor for the decrease in Interpipe’s profitability. In the second quarter of 2021, the company has been quite successful in passing the input price inflation on to its customers by being more aggressive in pricing new orders, according to the presentation released on June 3. Despite the Russian embargo on railway product imports from Ukraine, exports to other Customs Union countries such as Belarus and Kazakhstan have remained duty-free since the beginning of February, Interpipe emphasized in the presentation. Overall, Interpipe expects a qoq improvement in its business performance in the second quarter of 2021, the presentation stated.
● DTEK
Last month’s restructuring of much of DTEK’s bank and bond debt can be traced back to debt taken on in 2012, before the Donbas war, CEO
71 UKRAINE Country Report July 2021 www.intellinews.com