Metinvest subsidiary Pokrovske Coal output rises 20% in 1H21

Private joint stock company Pokrovske Coal produced
3.37 mmt of raw coking coal (18.6 kt per day) in 1H21, a 19.7% yoy rise,
according to Concorde Capital’s analysis of Ukraine’s Energy Ministry data.

In 2020, Pokrovske Coal’s output was 6.13 mmt of raw
coking coal (16.8 kt per day), a 22.6% yoy rise. In 2019, Pokrovske Coal
produced 5.0 mmt of coal (13.7 kt per day), a 25.8% yoy jump.

Metinvest (METINV), Ukraine’s largest steelmaker, in March increased its effective interest
in the so-called Pokrovske coal business, which includes Pokrovske Coal, to a
controlling stake.

Pokrovske Coal intends to launch four new longwalls,
three in July and one in August, with the total reserves of 5.3 mmt of raw
coal, according to a June 25 report by GMK Center, an industry consultancy.

Pokrovske Coal will increase its coal mining volume by
25% yoy in 2021, according to Metinvest’s CEO Yuriy Ryzhenkov, Interfax-Ukraine
reported on June 23.

Dmytro Khoroshun: Pokrovske
Coal’s daily production rates will likely increase in July and later in 3Q21,
when new longwalls are launched.

Pokrovske Coal’s 2021 output will amount to 6.9-7.7
mmt (19-21 kt per day), or 13-25% more yoy, we continue to expect.

We maintain our neutral view on METINV bonds.