Page 84 - UKRRptSept21

9.2.11 Metallurgy & mining corporate news
● Metinvest
Metinvest B.V., the holding company for Ukraine’s largest steel producer, Metinvest , will squeeze out minority shareholders from private joint stock company Pokrovske Coal, the company said on August 25. Metinvest B.V., alongside its affiliate Industrial Coal Holding LLC, own 41.93% and 57.29% of Pokrovske Coal respectively. Minority shareholders in Pokrovske Coal own only 0.78% or 6.61mn shares in the company. Metinvest B.V. hopes to acquire the minority stakes at UAH12.8 ($0.48) per share, valuing the Pokrovske Coal’s total equity at $407mn. Pokrovske Coal will increase in raw coal mining volume by 25% y/y in 2021 according to the CEO of Metinvest, Yuriy Rizhenkov. In 2020 it had already increased its raw coking volume by 22.6% y/y. In 2019 Pokrovske Coal produced 5mmt of coal (13.7kt) per day, a 25.8% y/y jump. The squeezeout will be positive for Metinvest because it will improve corporate governance by reducing the bureaucratic burden and legal risks attached to the current quasi-public legal status of Pokrovske Coal, according to Concorde Capital. Metinvest will spend $3.2mn on the squeezeout, which is very affordable to Metinvest, having earned $752mn of EBITDA in May and had $1.2bn of cash at the month’s end. Concorde Capital remain neutral on METINV bonds.
The attributable production of iron ore concentrate at Metinvest , Ukraine’s largest steel producer, amounted to 3.16 mmt (105.5 kt per day) in June, according to Concorde Capital’s analysis of separate news reports by Interfax-Ukraine. This is a 1.5% m/m gain on a daily average basis. The holding’s pellet output was 800 kt in June, a 25.1% m/m jump on a daily average basis. Concentrate production at Inhulets Iron Ore rose 3.3% m/m in June to a daily rate of 36.7 kt. Production at Northern Iron Ore was flat m/m at 38.7 kt per day. Production at Central Iron Ore retreated 2.7% m/m to 13.3 kt per day, whereas output at Southern Iron Ore added 5.0% m/m to 36.7 kt per day. In 1H21, Metinvest’s attributable output of iron ore concentrate rose 6.9% yoy to 18.54 mmt, or 102.4 kt per day, while its pellet production gained 16.5% yoy to 4.52 mmt.
Steel production at Ukraine’s largest producer Metinvest (METINV) was 24.4 kt per day (or 755 kt per month) in July, a 4.5% m/m decrease, according to Concorde Capital’s analysis of separate news reports by Interfax-Ukraine. Ilyich Steel reported a 3.2% m/m drop in steel production to 11.8 kt per day, while Azovstal’s output lost 5.6% m/m to 12.6 kt per day in July. The holding's hot iron output slid 5.0% m/m to 26.0 kt per day. In 7M21, Metinvest's steel output was 5.11 mmt (24.1 kt per day), or 9.3% more y/y.
EBITDA at Ukraine’s largest steelmaker Metinvestrose 15.7% m/m to $752mn in May, according to its monthly results published on August 4. The holding’s revenue inched up 0.9% m/m to $1,569mn. EBITDA excluding joint ventures (JVs) added 10.2% m/m to $605mn in May. Metinvest’s operating cash flow before working capital changes increased 11.6% m/m to $604mn in May, whereas cash flow from operations after working capital changes (but before profit tax and interest) lost 2.8% m/m to $459mn in May. Cash outflow due to changes in accounts receivable was $91mn in May, a 52.4% m/m drop.
84 UKRAINE Country Report September 2021 www.intellinews.com