Metinvest keeps EBITDA flat, slashes debt and CapEx in 1Q13
14 June 2013
Metinvest (METINV) reported USD 3.1 bln in 1Q13 revenue (-3% yoy, +12% qoq) and EBITDA of USD 460 mln (-14% yoy, +1% qoq). Its EBITDA margin slid 100 bps to 15% compared to 4Q12. The company cut its CapEx during the quarter to USD 96 mln, compared to average quarterly investment of USD 185 mln in 2012, and reduced its gross debt 7% YTD to USD 3.98 bln.
Roman Topolyuk: The holding’s modest 3% yoy revenue drop in revenue is a result of Metinvest’s reselling the steel products of Zaporizhstal (ZPST UK), activity that was absent in 1Q12. Without this increase in trading, the holding would have shown a remarkable 14% yoy decline in 1Q13 revenue, we estimate. Moreover, it seems like increased trading activity was the key factor that allowed Metinvest’s EBITDA to grow qoq.
Combined with reduced gross debt, the ratio of gross debt to LTM EBITDA improved to 2.1x vs 2.2x as of end 2012 (compared to the covenant of 3.0x). An across-the-board decrease in selling prices of its full product mix this quarter will squeeze the group’s EBITDA further, but the holding’s apparently decreased CapEx should serve to keep the company’s leverage in a safe zone.
