Metinvest iron ore concentrate output falls 6.5% yoy in 11M16

Attributable production of iron ore concentrate of Metinvest’s (METINV) subsidiaries amounted to 2.51 mmt in November, according to Concorde Capital’s analysis of separate reports by Interfax-Ukraine. This is a 17% yoy decline and 1.6% decline compared to October (on a daily average basis). In 11M16, output of attributable concentrate by Metinvest fell 6.5% yoy to 30.8 mmt, we calcuate.

Also, recall that Metinvest has promised to publish its ultimate restructuring terms of Eurobonds on or prior to Dec. 19, but still has yet to do that.

Andriy Perederiy: The decline in Metinvest’s iron ore mining was impacted by lower steel production during the same month. The company’s performance in the mining division comes below our projection of a 1% yoy increase in output of merchant iron ore concentrate to 35.2 mmt in 2016. However, smaller output will be compensated by much better iron ore prices in 2016 (about USD 57.6/t on average, or 17% above our initial forecast), thus contributing positively to Metinvest’s mining EBITDA.

We continue to expect the holding will be able to agree to a long-term debt restructuring by end-January, and hope that it will announce the latest restructuring terms in the coming days. We are keeping our positive view on Metinvest Eurobonds.