Metinvest EBITDA rises 9% m/m in July

July EBITDA at
Ukraine’s largest steel maker Metinvest (METINV) rose 8.8% m/m to USD 160 mln,
according to its monthly results published on Sept. 28. The holding’s revenue
increased 1.7% m/m to USD 732 mln. Its operating cash flow before working
capital changes swelled 16.7% m/m to USD 140 mln, but net cash flow from
operations decreased 18.9% m/m to USD 137 mln. Its CapEx dropped 65% m/m to USD 11 mln and
its end-July cash balance climbed 64% m/m to USD 424 mln.

The monthly results
imply that Metinvest’s EBITDA was USD 999 mln in 7M17, or a 38% yoy
improvement.

Andriy Perederey: The
high end-July cash balance was a surprise, given that Metinvest reported that
daily average cash for May-July was just USD 189 mln. The holding’s July
results were stronger than we
estimated due to better performance of its mining segment.
But it supports our expectations about radical improvements in its financials,
in line with stronger prices for steel and iron ore. This allows us to expect a
significant increase in Metivest’s coupon payment in November, or even some
early payment on Eurobonds already in October. We are retaining our position expressed
in our Sept. 26 note on Metinvest that the holding will be able to refinance
its Eurobond by the end of 2018, and we’re keeping our neutral view on
Metinvest’s bond.