Metinvest profitability decreases in 1Q12

Metinvest (METINV) reported 1Q12 revenue of USD 3.2 bln (+0.9% yoy) yesterday. The holding’s steel segment comprised 71% of total sales, down from 73% in the same period last year. EBITDA reached USD 538 mln in 1Q12, which implies EBITDA margin of 16.7%, down from 25% in full-year 2011. Net margin squeezed to 5% on USD 170 mln in net profit, versus 13% in 2011. Net debt as of end-1Q12 stood at USD 3.2 bln, implying a net debt to annualised EBITDA ratio of 1.5x – a way below Metinvest’s Eurobond covenants of 3x. CapEx in 1Q12 slowed down to USD 168 mln, which corresponds to 14% of the figure for all of 2011.