Metinvest EBITDA rises 5.9% m/m in August

EBITDA at Ukraine’s largest steelmaker Metinvest (METINV)
inched up 5.9% m/m to USD 216 mln in August, according to its monthly results
published on Oct. 26. The holding’s revenue fell 7.9% m/m to USD 838 mln.

 

EBITDA excluding joint ventures (JVs) slid 3.4% m/m to
USD 168 mln in August.

 

Metinvest’s operating cash flow before working capital
changes climbed 6.5% m/m to USD 163 mln in August, whereas cash flow from
operations after working capital changes (but before profit tax and interest)
plunged 45.4% m/m to USD 100 mln in August.

 

Cash flow due to changes in accounts receivable was
positive USD 20 mln in August, compared with negative USD 89 mln in July. Cash
inflow due to changes in accounts payable was negative USD 83 mln in August,
compared with positive USD 53 mln in July.

 

The holding’s cash outflow from investment activities
lost 14.3% m/m to USD 54 mln. Metinvest’s outflow from financing activities
amounted to USD 71 mln and its end-of-month cash balance retreated 14.4% m/m to
USD 523 mln. Its gross debt slid USD 64 mln m/m to USD 3,017 mln, while net
debt increased USD 24 mln m/m to USD 2,494 mln.

 

Metinvest’s metallurgical segment EBITDA (including
JVs) jumped 59.6% m/m to USD 91 mln in August, while its mining segment EBITDA
lost 13.0% m/m to USD 134 mln.

 

Excluding JVs, Metinvest’s metallurgical segment
EBITDA advanced 35.5% m/m to USD 84 mln in August, while its mining segment
EBITDA dropped 21.8% m/m to USD 93 mln.

 

The ratio of Metinvest’s net debt to its last-12-month
(LTM) EBITDA (excluding JVs) dropped to 2.46x at the end of August, down from
2.58x a month ago.

 

In 8M20, Metinvest’s revenue dropped 11.8% yoy to USD
6,716 mln, while its EBITDA including JVs slid 1.6% to USD 1,135 mln and EBITDA
excluding JVs lost 3.1% yoy to USD 956 mln.

 

Metinvest’s iron and steel product prices advanced in
August, gaining 6% for pig iron, 7% for slabs, 1% for billets, 4% for flat
products and 8% for long products. Its iron ore concentrate price lost 6% m/m
in August, while the pellet price slid 2% m/m.

 

Dmytro Khoroshun: We expect
both Metinvest’s metallurgical and mining segments to demonstrate strong
(comparable to August’s) results in September-November because of the high
steel and iron ore prices at the global markets.

 

We maintain our neutral view on METINV bonds.