Metinvest EBITDA rises 9.6% m/m in November

EBITDA at Ukraine’s largest steelmaker Metinvest
(METINV) rose 9.6% m/m to USD 263 mln in November, according to its monthly
results published on Jan. 29. The holding’s revenue increased 8.4% m/m to USD
941 mln.

 

EBITDA excluding joint ventures (JVs) added 14.1% m/m
to USD 210 mln in November.

 

Metinvest’s operating cash flow before working capital
changes climbed 9.6% m/m to USD 205 mln in November, whereas cash flow from
operations after working capital changes (but before profit tax and interest)
skyrocketed 98.1% m/m to USD 305 mln in November.

 

Cash flow due to changes in accounts receivable was
positive USD 63 mln in November, compared with negative USD 95 mln in October.
Cash inflow due to changes in accounts payable dropped 70.6% m/m to USD 20 mln
in November.

 

The holding’s cash outflow from investment activities
jumped 62.0% m/m to USD 81 mln. Metinvest’s outflow from financing activities
amounted to USD 71 mln and its end-of-month cash balance advanced 14.2% m/m to
USD 813 mln. Its gross debt inched up USD 8 mln m/m to USD 2,940 mln, while net
debt dropped USD 93 mln m/m to USD 2,127 mln.

 

Metinvest’s metallurgical segment EBITDA (including
JVs) slid 2.9% m/m to USD 136 mln in November, while its mining segment EBITDA
gained 10.9% m/m to USD 142 mln.

 

Excluding JVs, Metinvest’s metallurgical segment
EBITDA dropped 3.8% m/m to USD 126 mln in November, while its mining segment EBITDA
increased 22.2% m/m to USD 99 mln.

 

The ratio of Metinvest’s net debt to its last-12-month
(LTM) EBITDA (excluding JVs) dropped to 1.40x at the end of November, down from
1.71x a month ago.

 

In 11M20, Metinvest’s revenue dropped 5.4% yoy to USD
9,437 mln, while its EBITDA including JVs soared 50.3% to USD 1,882 mln and
EBITDA excluding JVs jumped 43.2% yoy to USD 1,557 mln.

 

Metinvest’s iron and steel product prices mostly
advanced in November, gaining 6% for pig iron, 4% for slabs, 1% for billets, and
4% for flat products, but losing 1% for long products. Its iron ore concentrate
price lost 9% m/m in November, while the pellet price slid 3% m/m.

 

Dmytro Khoroshun: Metinvest’s
monthly EBITDA should rise above USD 300 mln and approach USD 400 mln in 1Q21
due to the jump in steel and iron ore prices in November-January, we estimate.
Its December EBITDA should be comparable to November’s save for year-end
one-offs.

 

Metinvest’s cash holdings at the end of November, USD
813 mln, was about USD 0.5 bln higher than the USD 0.3 bln average during the
last few years. One possible reason for Metinvest to accumulate cash is to
exercise its option for 75% of Pokrovske Coal assets,
which would require a USD 0.5-0.6 bln payment to its co-investors.