Metinvest EBITDA rises 17% m/m in January

Ukraine’s largest steelmaker Metinvest (METINV) reported EBITDA of USD 155 mln in January, an increase of 17% m/m, according to monthly results published on March 31. Its revenue increased 19% m/m and 49% yoy to USD 598 mln in January. Its net operating cash flow before working capital change was USD 120 mln, or a 49% m/m rise. Its cash flow from operations decreased 15% m/m to USD 35 mln in January, after the company recorded USD 57 mln in working capital investments during the month (vs. USD 7 mln in December).

The holding`s CapEx declined 60% m/m to USD 34 mln. Its cash inflow from financial activities decreased to USD 19 mln. The company’s end-January cash balance increased 10% m/m to USD 248 mln.

Andriy Perederey: Despite the strong monthly results, the company paid only 30% of its January coupon due to low average cash during the month, which was USD 159 mln. This factor is disappointing and we suppose that average daily cash inflow was unstable. Also, we expect that its February results will be weaker due to halted operations at Yenakiyeve Steel since Feb. 20. But this factor won’t prevent the holding from generating enough free cash flow for all its creditors in 2017. So we are keeping a positive view on Metinvest bonds, which are now trading at 93% of par.