Metinvest 9M21 EBITDA shot up 4.4x

EBITDA at Metinvest (METINV), Ukraine’s largest steelmaker,
skyrocketed 4.4x yoy to USD 6,102 mln (including joint ventures) in 9M21,
according to its financial results published on Dec. 3. The holding’s revenue
jumped 78% yoy to USD 13.6 bln and its EBITDA margin climbed 27pp yoy to 45%.

 

EBITDA of Metinvest’s mining segment shot up 3.9x yoy
to USD 3,763 mln in 9M21, while that of its metallurgical segment skyrocketed
5.6x yoy to USD 2,781 mln.

 

Metinvest’s CapEx amounted to USD 822 mln in 9M21, up
79% yoy, driven by a 2x yoy jump in its metallurgical segment to USD 452 mln
(including USD 120 mln for acquisition of Dniprovskyy Steel PP&E assets)
and a 53% increase in the mining segment’s CapEx to USD 342 mln.

 

Gross debt was USD 2,245 mln at end-September, down USD
692 mln YTD. Cash and equivalents swelled to USD 2,006 mln at end-September, a
USD 1,180 mln YTD increase, and net debt stood at USD 239 mln on Sept. 30, a
USD 1,872 mln YTD plunge. The ratio of net debt to last-12-months EBITDA
(excluding JVs) amounted to 0.0x on Sept. 30, plunging from 1.2x at the end of
2020.

 

Metinvest spent USD 1,245 mln on deleveraging in 9M21
and USD 1,097 mln on other financing activities, which was mostly dividends (including USD 423 mln
paid in 1H21) according to Concorde Capital assessment.

 

In 3Q21, Metinvest’s EBITDA (including JVs) slid 1%
qoq to USD 2,307 mln.

 

Dmytro Khoroshun: Metinvest’s
EBITDA (including JVs) will plunge 35-50% qoq to USD 1.3-1.5 bln in 4Q21
because of the drops in steel and iron ore prices globally, we expect.

 

Further dividend payments, after about USD 1 bln in
9M21, are possible in 4Q21 and in 2022 as the holding’s cash pile remains about
USD 1.5 bln above its minimum liquidity required for smooth operations.

 

We maintain our neutral view on METINV bonds.