Metinvest reports EBITDA of USD 133 mln in August

Ukraine’s largest steelmaker Metinvest (METINV) reported EBITDA of USD 133 mln in August (-9.5% m/m), according to monthly results published on Oct. 28. The monthly results imply that Metinvest generated EBITDA of USD 859 mln in 8M16.

Its operating cash flow before working capital changes declined 5.5% m/m to USD 104 mln in August, but the cash inflow from working capital release was USD 64 mln (compared to outflow of USD 75 mln in July).

The holding’s CapEx was USD 23 mln in August (-8% m/m). Cash outflow from financial activities almost doubled to USD 52 mln. Cash on its balance sheet increased 53% m/m to USD 263 mln, exceeding the USD 180 mln threshold that enabled it to pay out excess cash interest for the month.

Andriy Perederiy: Metinvest’s August EBITDA was higher than our estimates of USD 107 mln, on assumption of smaller steel output and weaker profits of iron ore segment. The strong September result allows us to keep our annual EBITDA forecast at USD 1.2 bln.

In April-July, Metinvest replenished its working capital by USD 410 mln, most of it from USD 486 mln in operating cash flow generated during this period. The August monthly results confirmed that the working capital accumulation process has ended. This may suggest Metinvest won’t invest much in working capital in September and October, which will allow it to pay a relatively high portion of its cash interest in October after 98% was paid in September, compared to a 30% minimum. We continue to expect the holding will be able to agree to a long-term debt restructuring by end-December and we are keeping our positive view on Metinvest Eurobonds.