Metinvest reports its operating results for Q3 2016

2 November 2016

Crude steel output of Metinvest remains almost unchanged, while operating performance in Mining division worsened production of iron ore concentrate and coking coal decreased.

Crude steel output

Metinvest crude steel output 2016

Quarterly production figures
k tons Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016
Crude steel 2 082 1 712 1 998 2 191 2 149
Iron ore concentrate 8 189 8 213 7 911 7 902 7 137
Coke 1 140 1 113 1 124 1 066 1 126
Coking coal 844 803 799 781 740

Despite in reporting period Metinvest crude steel output remained practically unchanged vs. both previous quarter and Q3 2015, more significant changes took place in the structure of output by mills. Yenakiieve Steel increased production vs. previous quarter by 13% (due to low base of Q2 which was related to shortage of raw materials), while Azovstal decreased by 7% as one of its blast furnaces was shut down for an overhaul during 23 days over July and August.

As for different types of production, in Q3 semi-finished products output grew vs. previous quarter by 28% to 668k tons (as merchant pig iron production rose by 129k tons following completion of overhaul of blast furnace at Ilyich Steel), finished products decreased by 3% (1 658k tons), which is related to flat and railway products.

In last reporting quarter coke output of Metinvest grew by 5.6% vs. Q2, mainly at account of Zaporizhya Coke and Azovstal. Groups self-sufficiency in coke remains at close to 100% level.

On the other side in last reporting quarter Metinvest significantly decreased production of iron ore concentrate (-10% to Q2 2016 and -13% to Q3 2015). According to report of the company this fact mainly resulted from lower rate of overburden removal due to unsatisfactory condition of mining transportation equipment. It can be direct consequence of lower than necessary Groups maintenance expenses and is clearly negative for Metinvest, taking into account profits of the company starting from March (average monthly EBITDA made USD 138M).

Main production figures for 9m 2016 are represented in following table:
k tons 9m 2016 9m 2015 Change, %
Crude steel 6 336 5 957 6.4%
Iron ore concentrate 22 948 23 995 -4.4%
Coke 3 316> 2 974 11.5%
Coking coal 2 320 2 482 -6.5%

Relatively good figures are reported for crude steel and coke output, main reason low base of H1 2015, when significant disruptions of operations took place due to negative influence of conflict in the East of Ukraine.

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