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years. The AMCU found the four companies guilty of distorting the results of 2018 tenders conducted by Ukrainian Railways (RAILUA). On August 16, Interpipe Ukraine notified the AMCU that it had paid the UAH69mn fine. “Interpipe should be able to continue offering the wheels it produces to Ukrainian Railways via public procurement tenders even after this particular AMCU win, we continue to think,” analysts at Concorde Capital believe. They think that one solution may be for Interpipe to bid via companies other than the four tender participants disciplined by the AMCU in October.
● Ferrexport
Revenue jumped 74.3% y/y to $1,353mn at Ukraine’s largest iron ore pellet exporter Ferrexpo, the company said in its 1H21 financial report released on August 4. Its 1H21 EBITDA soared 2.5x y/y to $868mn and net profit skyrocketed 2.6x y/y to $661mn. Operating cash flow before working capital soared 2.9x y/y to $901mn, while net cash from operating activities jumped 2.6x y/y to $661mn. CapEx increased 48.4% y/y to $142mn.
Ferrexpo’s net cash position amounted to $213mn at end-June. During 1H21, the company repaid $257mn of debt, including a full early repayment of its PXF facility. As a result, the gross debt plunged to $22mn by end-June. Ferrexpo said that it had no debt covenants (particularly, no debt-related covenants that limit its ability to pay dividends) at end-June following this debt repayment.
Ferrexpo’s C1 cash production cost rose 14.0%, or $5.7/t y/y to $46.6/t. The company disclosed that commodity input cost increases contributed $5.1/t to the C1 production cost growth in 1H21, including $2.2/t due to natural gas prices, $0.9/t due to electricity tariffs, and $0.5/t due to fuel prices. The maintenance costs added $1.5/t, which was partially offset by a $1.1/t decrease due to the currency effects.
The share of China and South East Asia in Ferrexpo’s sales volumes plunged 39pp to 29% in 1H21 (from 68% in 1H20), while gains were reported for Central Europe (+13pp to 34%), Turkey and MENA (+12pp to 13%), and Western Europe (+10pp to 14%).
Ferrexpo also presented its plans for Wave 1 of its capacity expansion project. The company plans to add 3 mmtpa of pelletizer capacity at a cost of $181mn and 4.1 mmtpa of concentrate capacity at a cost of $240mn. Both projects are tentatively expected to be completed by 2024.
Ferrexpo also declared an interim dividend of USc 39.6 per share to be paid on August 26, with the record date for the payment of August 13 and ex-dividend date of August 12, according to the report.
During a call with investors on the same day, the company’s management said that its CapEx for 2021 might amount to around $300mn, or about 50% more y/y. The management clarified that the pelletizer capacity increase, expected to be completed by 2024, will involve shutting down, for several months, one of its four pelletizers (currently with the capacity of 3 mmtpa each) and bringing it back online with an increased capacity of 6 mmtpa.
87 UKRAINE Country Report September 2021 www.intellinews.com