Monthly report of Metinvest May 2017

31 July 2017

The company improved performance of its main business segments.

According to preliminary report of the company for May, total Metinvest proceeds in reporting month made USD 737M, which has been by 22% higher than in April and is the highest monthly proceeds amount for the latest period of time (please see chart below).

EBITDA margin of the company stays relatively stable, in May it made 21% (in absolute terms EBITDA comprised USD 154M vs. USD 136M in April).

Metinvest revenues and EBITDA margin dynamics since the beginning of Y2016 look as follows:

Metinvest revenues and EBITDA margin May 2017

In reporting month Metallurgical division revenues (USD 606M, +27% vs. previous month) made 82% of total Metinvest sales. The company increased its sales of finished production in tons vs. previous months (by 20% up to 719k tons, though we note that finished production sales have still been lower vs. 766k tons in March).

In reporting period Metinvest kept increasing sales of semi-finished production in May it made 262k tons (+42% vs. previous month).

In total in May the company sold 981k tons of steel products, which is the largest value for the several latest months.

As for Mining division, its revenues (disregarding Intragroup sales) has been relatively stable vs. previous month (USD 131M), EBITDA margin made 29.5% (vs. 37% in April and 54% in March). Decrease of the margin took place amid general decrease of global iron ore prices in May they have been by 30-40% lower than in the beginning of March.

Situation with operating cash flow of Metinvest considerably improved vs. previous month in April it made (disregarding interest and taxes paid) USD -24M (due to growth of Inventory and Trade Receivables), in May already USD 116M (the highest value of monthly operating cash flow since August 2016, despite still growing trade receivables).

As a result we note that cash balance of the company increased from USD 137M as of 30.04.2017 up to USD 185M as of 31.05.2017.

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