Metinvest EBITDA jumps 22.1% m/m in December

EBITDA at Ukraine’s largest steelmaker Metinvest
(METINV) jumped 22.1% m/m to USD 321 mln in December, according to its monthly
results published on Feb. 16. The holding’s revenue increased 8.0% m/m to USD
1,016 mln.

 

EBITDA excluding joint ventures (JVs) added 21.9% m/m
to USD 256 mln in December.

 

Metinvest’s operating cash flow before working capital
changes climbed 17.1% m/m to USD 240 mln in December, whereas cash flow from
operations after working capital changes (but before profit tax and interest)
dropped 28.9% m/m to USD 217 mln in December

 

Cash flow due to changes in accounts receivable was
negative USD 74 mln in December, compared with positive USD 63 mln in November.
Cash inflow due to changes in accounts payable jumped 95.0% m/m to USD 39 mln
in December.

 

The holding’s cash outflow from investment activities
slid 6.2% m/m to USD 76 mln. Metinvest’s outflow from financing activities
amounted to USD 105 mln and its end-of-month cash balance inched up 1.6% m/m to
USD 826 mln. Its gross debt slid USD 3 mln m/m to USD 2,937 mln, while net debt
dropped USD 16 mln m/m to USD 2,111 mln.

 

Metinvest metallurgical segment’s EBITDA (including
JVs) dropped 16.9% m/m to USD 113 mln in December, while its mining segment’s
EBITDA jumped 47.9% m/m to USD 210 mln.

 

Excluding JVs, Metinvest metallurgical segment’s
EBITDA dropped 25.4% m/m to USD 94 mln in December, while its mining segment’s
EBITDA soared 65.7% m/m to USD 164 mln.

 

The ratio of Metinvest’s net debt to its last 12 month
(LTM) EBITDA (excluding JVs) dropped to 1.16x at the end of December, down from
1.40x a month ago.

 

In 2020, Metinvest’s revenue dropped 2.8% yoy to USD
10,453 mln, while its EBITDA including JVs soared 81.7% to USD 2,204 mln and
EBITDA excluding JVs jumped 73.5% yoy to USD 1,815 mln.

 

Metinvest’s iron and steel product prices mostly advanced
in December, gaining 4% for pig iron, 2% for billets, 1% for flat products and
12% for long products, but losing 2% for slabs. Its iron ore concentrate price
gained 10% m/m in December, while the pellet price rose 14% m/m.

 

Dmytro Khoroshun: Metinvest’s
monthly EBITDA should approach USD 400 mln in 1Q21 due to the jump in steel and
iron ore prices in November-January, we estimate.

We maintain our neutral view on METINV bonds.