Metinvest's 1Q15 EBITDA falls 61% YoY

Metinvest's 1Q15 EBITDA falls 61% YoY



5 червня 2015 года
ICU

In its trading update published yesterday, Metinvest reported its 1Q15 EBITDA declined 61% YoY to US$341m. The company's 1Q15 revenues dropped 38% YoY to US$1.8bn and capex fell 69% YoY to US$38m. As of end-1Q15, Metinvest's net debt was down 5% to US$2.95bn from end-2014, while Net Debt/LTM EBITDA remained unchanged at 1.2x. The company's 1Q15 revenues were hit most of all by production disruptions and deteriorating demand in Ukraine, all resulting from the military conflict in Donbass, while another significant effect came from iron ore product prices down 35-44% and steel product prices down 6-17% YoY. The negative impact on EBITDA was partly mitigated by lower costs of raw materials and natural gas as well as by the positive effect from the hryvnia's devaluation.

Investment implications: We expect the above factors to continue to have a negative impact on Metinvest's financial position throughout 2015. If the Donbass conflict is frozen, Metinvest's 2015 EBITDA could decline 40-60% to US$1.1-1.6bn, but EBITDA could decline even more significantly if fighting intensifies. With sustaining capex of around US$0.5bn and US$0.2bn of debt service, Metinvest could find it problematic to pay the total amount of US$0.8bn debt due in 2015. However, the company may concede to the pressure of the 2015 bondholders and further improve the restructuring terms which currently offer a 25% down payment in June 2015 and the remaining 75% to be paid in January 2016.

Источник: ICU

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