ArcelorMittal Kryvyi Rih, the biggest mining and steel plant in Ukraine, invested $415.4 million in the development of production in 2019, which was 6.2% less compared with 2018 ($433 million). The company said in a press release on Thursday that of these, operating costs amounted to $116 million, and capital – to $299.4 million.
“2019 was a difficult year for all plants of mining and steel complex of Ukraine, while the second half of the year was more difficult than the first one. It was increasingly difficult for Ukrainian exporters to sell their steel products due to a significant drop of prices and general decrease in steel consumption on the world markets. Along with rising costs, this negatively impacted on the financial condition of the steel companies and led to decrease in production. Nevertheless, ArcelorMittal Kryvyi Rih has managed to maintain fairly high rate of investments and continued the implementation of the strategic projects,” the company said.
“Despite the reduction of the investment program budget, in 2020 the company intends to complete the implementation of key investment projects and continue the implementation of new ones,” ArcelorMittal Kryvyi Rih said.
The company said that over the 14 years of operations in Ukraine, ArcelorMittal’s total investments amounted to $9.7 billion ($4.8 billion is the amount of the acquisition of the plant during privatization and $4.9 billion invested in development of production). Until 2022 the total volume of capital investments of ArcelorMittal Kryvyi Rih in the development of production will be $1.8 billion.
Myronivsky Hliboproduct (MHP) based on a preliminary estimate of results for the full year 2019, expects that earnings before interest, taxes, depreciation and amortization (EBITDA) is to be some 15% lower than the company’s previous guidance of $450 million provided in September 2019. According to a company report posted on the website of the London Stock Exchange (LSE) on Thursday, Three factors contributed to the weakening of profitability in the fourth quarter of 2019.
“[It is] strengthening of the Ukrainian hryvnia – as 54% of the company’s revenues are denominated in U.S. dollars, whereas most costs are incurred in UAH, the 13% strengthening of the UAH in Q4 2019 adversely impacted profits, primarily in grain growing operations (accentuated by the seasonality of operations with major expenses incurred in H1 2019),” the company said.
In addition, weak export prices – prices of chicken exports (mainly to the EU) and crops (especially corn) decreased substantially also affected the EBITDA decline. The third factor is the ban on exports to KSA – since September 2019, MHP has been banned from exporting poultry to Saudi Arabia, one of the company’s largest` export markets. MHP said that on 29 January 2020, KSA reopened its market to the import of Ukrainian poultry products (excluding products from the Vinnytsia region).
“Despite this, MHP ended the year with net debt at US$1,143 million and more than $300 million in cash. With no major debt facilities maturing until 2024, very limited short-term borrowings (around 2%) and a modest CAPEX program, it remains MHP’s policy to maintain robust cash reserves that are not materially affected by the weaker than expected financial performance,” MHP said.
The company said that the 2019 dividend is subject to the board of directors’ decision, however, taking into account the lower results, dividends are expected to be lower than last year.
The growth of Ukraine’s economy in the fourth quarter of 2019 slowed down to 2.2% and will again exceed 3% in the first quarter of 2020, Dmytro Sologub, the Deputy Governor of the National Bank of Ukraine (NBU), has stated. “According to our estimates, behind the growth figure [GDP] of 3.3% in 2019 is the fourth quarter growth of 2.2% … Regarding the first quarter, we currently have an estimate of GDP growth above 3%,” he said at a briefing in Kyiv.
As reported, the NBU worsened the forecast for GDP growth in 2019 to 3.3% from 3.5% and kept it at 3.5% in 2020 and 4% in 2021.
Sopharma AD pharmaceutical company in 2019 increased sales in Ukraine by 5% compared to 2018. According to the company’s preliminary report, in general, in 2019, revenue from sales to European countries increased by 21% compared to 2018.
The company noted that such an indicator was achieved, in particular, due to an increase in sales in Ukraine by 5% and in Russia by 32%, as well as an increase in sales to the Balkan countries, as well as Poland, the Czech Republic, Moldova, and other countries.
In addition, the company reports that in 2019 the company received 47 permits for the use of new medicines, in particular, in Ukraine, for the preparation of desloratadine in two dosage forms, as well as two names of cosmetic products.
As reported, in January-June 2019 Sopharma increased sales in Ukraine by 35% compared to the same period in 2018.
Since January 2008, Sopharma AD has been controlling PJSC Vitamins in Ukraine, and in August 2012 it created the subsidiary Sopharma Ukraine LLC (Kyiv) to optimize its trading business.
PrJSC Severodonetsk Azot, part of Group DF belonging to businessman Dmytro Firtash, in 2019 tripled production of mineral fertilizers, to 384,090 tonnes, the group’s press service has said.
Production of ammonium nitrate amounted to 371,660 tonnes (3.8 times more than a year earlier), commercial water ammonia to 1,650 tonnes (36.4% more), carbamide-ammonia mixture to 10,780 tonnes (doubled). Production of non-concentrated nitric acid amounted to 296,200 tonnes, which is 3.7 times more than a year earlier.
“The large-scale and important project for us over the year is the start of production at the new UAN liquid fertilizer plant. The result is as follows: we produced twice as many UANs as a year earlier, when we used the temporary UAN production technological scheme,” the press service said citing chairman of the board Leonid Buhayev.
The report also noted that in addition to the installation of the UAN production facility, projects for the modernization of the ammonia-refrigeration unit in ammonia production workshop 1-A, overhauls in the nitric acid production workshop, the steam supply and general communications department, and a number of other divisions became important for the enterprise’s work.
According to the press service, the total capital investment of the enterprise last year amounted to UAH 32.73 million.
PrJSC Severodonetsk Azot is one of the largest Ukrainian chemical enterprises. It has been part of Group DF since 2011. The core business of the enterprise is production of mineral nitrogen fertilizers.
Metinvest, the largest Ukrainian mining and metallurgical holding, increased steel production by 3% in 2019 compared with 2018, to 7.578 million tonnes, and pig iron production fell by 3%, to 7.928 million tonnes, and total coke production – by 11%, to 4.667 million tonnes. Metinvest B.V., the parent company of the holding, said in a report on operational results for Q4 2019 and entire 2019, in Q4 2019 pig iron production fell by 7% compared with the previous quarter, to 1.887 million tonnes due to scheduled major overhauls of blast furnaces at the Mariupol steelmakers.
Steel production in Q4 2019 fell by 16% compared with the previous quarter, to 1.673 million tonnes as the group both produced less hot metal and allocated more to make merchant pig iron. The latter came amid higher demand for that product and lower demand for slabs and finished products.
In Q4 2019, coke production totaled 1.05 million tonnes, which is 8% less than in the previous quarter due to a fall in domestic consumption in the reporting period.
In 2019, Metinvest’s coke output dropped due to: a shortage of coal that started in June 2019, as direct supply stopped from Russia; unstable operation of coke-oven batteries, a coke dryquenching plant and emergency shutdowns of coke cars early this year at Avdiyivka Coke Plant; and lower intragroup consumption in Q4 2019.
