Metinvest EBITDA improves 3% m/m in October

October EBITDA at Ukraine’s largest steel maker
Metinvest (METINV) improved 3.2% m/m to USD 224 mln, according to its monthly
results published on Dec. 27. The holding’s revenue rose 11.5% m/m to USD 928
mln. Its operating cash flow before working capital changes grew 6.0% m/m to
USD 194 mln, whereas net cash flow from operations jumped 58.8% m/m to USD 108
mln. The holding’s CapEx jumped 2.2 times m/m to USD 56 mln and its end-October
cash balance increased 13% m/m to USD 330 mln.

The monthly results imply that Metinvest’s EBITDA was
USD 1,597 mln in 10M17, or a 43% yoy improvement.

Dmytro Khoroshun: Metinvest’s
October EBITDA is another monthly record set since October 2015, in line with our expectations. Metinvest’s
realization prices for steel products continued growing in October with monthly
increases amounting to 6% for slabs, 5% for billets and 2% for finished
products.

We conclude that Metinvest started selling its slab
inventories in October because the slab sales volumes for the month, 183 kt,
were significantly larger than the 9M17 average of 79 kt per month. In its 9M17
presentation, Metinvest explained that its slab inventories increased
by 158 kt year-to-date due to a temporary lack of transportation vessels.

We’re keeping our neutral view on Metinvest’s bonds.