Page 59 - UKRRptOct18

9.2.10 Metallurgy & mining corporate news
Ebitda at Ukraine’s largest metal producers Metinvest increased by 3.1% month-on-month to $231mn in June , according to its monthly results published on August 31. The company’s revenue expanded 9.8% m/m to $1,096mn. Metinvest’s operating cash flow before working capital changes increased 6.9% m/m to $202mn, whereas cash flow from operations (before profit tax and interest) jumped 4.3-fold m/m to $292mn in June. Metinvest reported a cash inflow from investment activities of $6mn, including dividends received of $68mn (vs. an outflow of $68mn in May). Metinvest’s cash outflow from financing activities amounted to $160mn and its end-of-month cash balance expanded 38% m/m to $370mn. In January-June, Metinvest’s revenue increased 58% year-on-year to $6.18bn, while Ebitda rose 59% y/y to $1.34bn. By segment, the 12% y/y drop in the mining segment Ebitda to $638mnwas more than offset by a 3.7-fold jump in the metallurgical segment Ebitda to $755mn. Metinvest’s business remained steady in June, with prices weakening m/m for both semi-finished products (slabs 3%, billets 6%) and finished products (1%), Dmytro Khoroshun at Kyiv-based brokerage Concorde Capital wrote in a note on September 3.
Metinvest , Ukraine’s largest steelmaker, released its 1H18 financial results on September 14. The holding confirmed that its EBITDA amounted to $1,335mn (a 59% y/y surge), the value inferable from its monthly reports. Revenue rose 58% y/y to $6,179mn, and net income surged 9.3x y/y to $668mn. Its EBITDA margin increased 1pp y/y to 22%, and its net margin climbed 9pp to 11%. Operating cash flows before working capital jumped 56% y/y to $1,148mn. Net cash from operations increased 50% y/y to $457mn. Operating cash outflow due to changes in working capital rose 11% y/y to $356mn, driven by the outflows due to the increase in receivables ($467mn, a 32% y/y jump). Metinvest’s CapEx amounted to $420mn in 1H18, up 2.2x y/y, driven by a 3.8x y/y jump in its metallurgical segment’s CapEx to $271mn. In 1H18, Metinvest received $261mn in dividends from its joint venture Southern Iron Ore (1H17: zero) and paid $29mn in dividends to its owners (1H17: zero). Net debt (including subordinated loans) stood at $2,521mn at June 30, decreasing 8% YTD, and the ratio of net debt to last-12-months EBITDA amounted to 1.0x, sliding from 1.3x at the end of 2017. Metinvest disclosed that the $190mn consideration for the 24.99% stake in Pokrovske Coal and related assets that the holding acquired after the balance sheet date is payable (with interest) over a maximum period of 6 years. Regarding the remaining 75.01% currently owned by four co-investors, Metinvest seems to have guaranteed the settlement of the obligations of these co-investors before the sellers of Pokrovske Coal. Metinvest has an option to acquire this 75.01% stake.
Ukraine’s largest iron ore pellet exporter Ferrexpo resumed this month production of pellets from purchased concentrate, according to consultancy Metal Expert. Ferrexpo purchased 50 tonnes from Russia’s Metalloinvest in September and is considering purchasing 30-40 tonnes in October. Ferrexpo’s pellet production from purchased concentrate dropped to 50 tonnes in 2017 from 143 tonnes in 2016 and 403 tonnes in 2015. In January-August, Ferrexpo produced 14.5 tonnes of pellets from purchased concentrate, down from 21.5 tonnes in the first half of 2017. "It is positive that Ferrexpo is trying to capture short-term gains by utilizing its spare pelletizing capacity, of which it has about 1.2mn-1.5mn tonnes per year if it uses only its
59 UKRAINE Country Report October 2018 www.intellinews.com