Metinvest affiliate Pokrovske Coal output jumps 24% in 11M19

Private joint stock company Pokrovske Coal produced 13.0
kt of raw coking coal per day in November, an 8.3% m/m drop, according to
Concorde Capital’s analysis of Energy Ministry data as reported by
Interfax-Ukraine on Dec. 13.

In 11M19, Pokrovske Coal produced 4.49 mmt of coal, a
24.3% yoy jump.

Recall, Pokrovske Coal said in its 2018 annual report
that it plans to boost coal production 42% yoy
to 5.63 mmt in 2019. Metinvest (METINV), Ukraine’s largest steelmaker, owns 25%
in Pokrovske Coal assets.

Dmytro Khoroshun: Pokrovske’s
coal output slowdown in October-November is generally explained by a dire
situation on world steel markets and the resulting drop in Ukraine’s iron and
steel production volumes. However, Ukrainian iron and steel export prices have
apparently stabilized in the beginning of November, which might support coking
coal demand in Ukraine in the coming months.

We expect Pokrovske Coal to boost its production
22-23% yoy to 4.9 mmt in 2019.

We maintain our neutral view on METINV bonds.