Metinvest subsidiary Pokrovske Coal output plunges 20% m/m in August

Private joint stock company Pokrovske Coal produced
4.20 mmt of raw coking coal (17.3 kt per day) in 8M21, a 12.2% yoy rise,
according to Concorde Capital’s analysis of Ukraine’s Energy Ministry data.

Daily coal production rate at Pokrovske Coal plunged
19.5% m/m to 12.0 kt in August, following a 22.1% m/m fall in July.

In 2020, Pokrovske Coal’s output was 6.13 mmt of raw
coking coal (16.8 kt per day), a 22.6% yoy rise. In 2019, Pokrovske Coal
produced 5.0 mmt of coal (13.7 kt per day), a 25.8% yoy jump.

Pokrovske Coal intended to launch four new longwalls,
three in July and one in August, with the total reserves of 5.3 mmt of raw
coal, according to a June 25 report by GMK Center, an industry consultancy.

Pokrovske Coal will increase its coal mining volume by
25% yoy in 2021, according to Metinvest’s CEO Yuriy Ryzhenkov, Interfax-Ukraine
reported on June 23.

Dmytro Khoroshun: The
July-August plunges in daily production rate at Pokrovske Coal are negative for
Metinvest.

We are revising down Pokrovske Coal’s 2021 output
estimate to 6.5-6.8 mmt (18-18.5 kt per day), or 6-10% more yoy.

We maintain our neutral view on METINV bonds.