Metinvest April attributable steel output flat m/m, 7% higher yoy

Ukraine’s leading steel producer Metinvest (METINV) kept its April steel production flat m/m at its subsidiaries at 772 kt (+8% yoy), according to our analysis of subsidiary reports by Interfax-Ukraine. Steel production at Zaporizhstal (accounted for as a JV, with Metinvest owning 49.9% of its shares) grew 1% m/m in April to 302 kt (+3% yoy). The results imply that Metinvest’s attributable steel output was flat m/m and grew 7% yoy in April to 923 kt.

The attributable steel output grew 14% yoy to 3,408 kt in 4M16.

Roman Topolyuk: Despite flat m/m operating performance, fewer calendar days in April compared to March (by 3%) suggest that the capacity load of Meinvest’s steelmakers increased by 4 p.p. for Azovstal to 76%, 3 p.p. for Yenakiyeve to 67%, 3 p.p. for Zaporizhstal to 78%, and 0.5 p.p. for Azovstal to 80%. The improvement was spurred by steel price recovery in March and April.

We are keeping our projection of attributable steel production by Metinvest unchanged at 10.4 mmt in 2016 (+7% yoy). This supports our bullish view on METINV notes.