Metinvest reports 1H16 financials in line with monthly results
13 October 2016
Ukraine’s leading metals and mining holding Metinvest (METINV) reported on Oct. 12 its 1H16 interim financial statements, whose results were in line with its monthly figures. In particular, Metinvest’s 1H16 consolidated revenue was USD 2,880 mln, down 21% yoy owing to lower prices of steel and iron ore products, which hit 7-year lows in 1Q16. Sales volumes of square billets, pipes, coke and pellets dropped due to weak demand in key markets and unstable operations at Yenakiyeve Steel (ENMZ UK).
Its 1H16 EBITDA also corresponds to the sum of earlier disclosed monthly results and amounted to USD 580 mln (-7% yoy).
The holding’s 1H16 net profit amounted to USD 90 mln, compared to a net loss of USD 166 mln a year ago. Its cash flow from operating activities declined to USD 163 mln from USD 354 mln in 1H15, mainly due to an increase in trade receivables as well as a rise in recoverable VAT.
Igor Zholonkivskyi: As the 1H16 results bring little additional information, this does not change our forecast for the holding’s 2016 EBITDA of USD 1.2 bln. As we highlighted earlier, the interim decline in steel output in September and October, as announced by the holding’s CEO earlier this week, adds some downside risk to our annual EBITDA estimate.
Nevertheless, we remain bullish on METINV Eurobonds anticipating that a successful long-term restructuring of the bonds by end-November will be a price catalyst.
