Metinvest B.V., the parent company of a vertically integrated group of steel and mining companies (jointly referred to as “Metinvest” or “the Group”), announced its unaudited IFRS interim condensed consolidated financial statements for 1H 2020.
Due to rounding, numbers presented throughout this release may not add up precisely to the totals provided and percentages may not precisely reflect absolute figures.
|Summary - production results||1H 2020||1H 2019||Change, y-o-y|
|Iron ore concentrate||15,174||14,454||720||5%|
|Coking coal concentrate||1,536||1,404||132||9%|
|Summary - financial results||1H 2020||1H 2019||Change, y-o-y|
|Income statement highlights|
|Cash flow highlights|
|Net cash from operations||685||570||115||20%|
|Net cash used in investing activities||-435||-529||94||-18%|
|Net cash used in financing activities||-52||-40||-12||30%|
|Summary - financial results||30-06-20||31-12-19||Change, YTD|
|Cash and cash equivalents||465||274||191||70%|
Commenting on the results, Yuriy Ryzhenkov, Chief Executive Officer of Metinvest, said:
“So far in 2020, Metinvest has successfully navigated global turbulence and continued to demonstrate solid progress on its ESG agenda, focusing foremost on maintaining stable operations and keeping its people safe.
During this time, we took decisive steps to fight the spread of the COVID-19 pandemic while protecting our employees and communities. Among other steps, we ensured our workers were protected in all our plants through rigorous health protocols and switched administrative employees to remote work, in addition to implementing other safety measures. The Group also purchased and transferred free-of-charge 18,000 COVID-19 express tests to 44 medical institutions. Our overriding priority remains the health and safety of our people and communities during this emergency.
In the first half of 2020, Metinvest’s financial performance was affected by weak global pricing for steel products and the COVID-19 pandemic. However, the Group’s vertical integration, global sales network and the deep experience of our team have once again proven themselves. We managed to quickly adjust the product mix and redirect sales volumes among markets. As a result, Metinvest was able to benefit from China’s early and robust economic recovery in the second quarter of the year, expanding ore shipments to that market by more than 3 million tonnes. We also resumed steel sales to this country, selling almost half a million of tonnes of semi-finished and finished steel products during the reporting period. Coupled with a lower cost base, the Metallurgical segment significantly improved its performance, delivering an 80% year-on-year increase in EBITDA. Overall EBITDA totalled US$715 million.
As planned, we reduced our CAPEX by 35% year-on-year to US$313 million during the reporting period. Despite external challenges, we were able to achieve our objectives and complete several strategic projects during this period. As such, Metinvest completed an upgrade of the beneficiation facilities at Central GOK to produce a premium class concentrate with 70.5% Fe, which allowed us to create the fabrication line for the production of a high-grade pellet for DRI technology. We remained committed to reducing our environmental footprint and doubled our ecological CAPEX year-on-year to US$110 million.
Importantly, we also managed to strengthen the Group’s liquidity. Amid a working capital release and lower capital expenditures, the Group generated free cash flow of US$240 million, while the cash balance improved by 70% since the beginning of the year to US$465 million.
Looking forward, despite continued uncertainty in the macroeconomic environment and recurring global challenges posed by the pandemic, we believe that Metinvest is able to overcome these difficulties and deliver a sustainable performance. I would also like to take the opportunity to thank our stakeholders for standing with us during this time of profound change.”