Metinvest EBITDA drops 13% m/m in November

EBITDA at Ukraine’s largest steelmaker Metinvest (METINV)
dropped 12.8% m/m in November to USD 184 mln, according to its monthly results
published on Jan. 31. The holding’s revenue slid 1.6% m/m to USD 917 mln.
Metinvest’s operating cash flow before working capital changes decreased 7.0%
m/m to USD 160 mln, whereas cash flow from operations (before profit tax and
interest) plunged 44.4% m/m to USD 95 mln in November.

The holding reported a net cash outflow from
investment activities of USD 74 mln (vs. USD 49 mln in October). Metinvest’s cash
outflow from financing activities amounted to USD 39 mln and its end-of-month
cash balance dropped 17.8% m/m to USD 366 mln.

Metinvest’s metallurgical segment EBITDA dropped 34.3%
m/m to USD 69 mln, while mining segment EBITDA inched up 1.0% m/m to USD 105
mln.

Steel product prices demonstrated weakness m/m for
slabs and flat products (-3% both) and billets (-4%), while long product prices
were flat m/m and pig iron prices gained 2% m/m.

Dmytro Khoroshun: Metinvest’s
steel prices and its metallurgical segment’s profitability demonstrated
substantial m/m weakness, and we continue to expect them to drop
further because of the recent plunge in steel prices that
intensified in August. On the other hand, the recent Vale mine disaster in
Brazil and the observable jump in iron ore prices, if sustained, would improve
the profitability of Metinvest’s mining segment, supporting the overall
profitability of the vertically integrated holding.