Metinvest steel production falls 13% in 2012

Обзоры по компаниям и отраслям 04.02.2013 Metinvest’s (METINV) steel production fell 13% yoy in FY12 to 12.5 mmt but grew 2% qoq to 2.9 mmt in 4Q12, according to the company’s trading update published on Feb. 1. Metinvest experienced a sharp decline in semi-products output in FY12 (-24%), led mainly by plunging slab production (-46% yoy) to 1.3 mmt, while steel billets output soared 59% to 0.8 mmt. These changes coincided with falling prices and demand for slabs, as well as improving global conditions for billets. Both flat and long finished products took a hit – down 9% and 6% yoy respectively in FY12, while 4Q12 brought some relief (up 14% qoq to 1.4 mmt) in the flat products segment, driven by restocking on the global market. Production of iron ore concentrate inched up 1% yoy in 2012 to 36 mmt and 1% qoq to 9 mmt. Output of iron ore products for third parties grew 12% yoy to 21 mmt as internal consumption declined. Coal mining decreased 9% yoy in FY12 to 12 mmt but improved 2% to 2.8 mmt in 4Q12. A 53% jump in 4Q12 washed coal production for third parties didn’t boost the annual number, which was down 31% yoy in 2012. Adverse global demand for coking coal and very poor demand for steam coal in the US were among the factors behind Metinvest’s annual decrease in coal mining. Roman Topolyuk: The ongoing shift towards selling more iron ore at the expense of finished steel brings some support to falling margins (EBITDA margin of Metinvest fell to 16% in 9M12 in comparison to 25% in FY11), however the absolute numbers are set to decline. We estimate Metinvest will post USD 1.9 bln in EBITDA for FY12 (-46% yoy) and expect its EBITDA will stay generally flat yoy in 2013.