Metinvest B.V. (the Netherlands), the parent company of the international vertically integrated mining and metallurgical group Metinvest, in 2020 reduced sales of products in Europe by 21% compared to the previous year, to $ 2.851 billion.
According to the audited consolidated financial results for 2020, sales in Europe fell mainly due lower sales prices for steel products. This was also affected by a decrease in sales of semi-finished products by 31% and iron ore products by 48%. As a result, the region’s share in total revenue decreased by 7 percentage points (p.p.) compared to the previous year, to 27%.
In 2020, revenue in Ukraine decreased by 7%, to $ 2.939 billion, mainly due to a decrease in the average price for metal products and coke, as well as a 26% reduction in pellet sales. The decrease in revenues was partially offset by an increase in the supply of long products by 23%, coke by 14% and iron ore concentrate by 43%. In general, the share of Ukraine in the consolidated revenue decreased by 1 p.p. compared to 2019, to 28%.
Revenue in the Middle East and North Africa region rose 9%, to $ 1.8 billion, mainly driven by an increase in slab (2.5 times) and flat products (12%) shipments. As a result, the region’s share in the consolidated revenue increased by 2 p.p., to 17%.
Revenue in Southeast Asia rose 56%, to $ 1.467 billion thanks to the resumption of sales by Metinvest to China amid strong demand in the country. During the reporting period, the group sold 862,000 tonnes of semi-finished products and finished metal products in the country. In addition, supplies of iron ore products to China increased 1.7 times. As a result, the market share of the region in total revenue increased by 5 p.p., to 14%.
Revenue in the CIS decreased by 23%, to $ 635 million due to a decrease in sales volumes and sales prices for flat products. The region’s share in the consolidated revenue decreased by 2 p.p., to 6%.
Metinvest B.V. (the Netherlands), the parent company of the Metinvest international vertically integrated mining and metallurgical group, in 2020 increased its net profit by 54% compared to 2019, to $ 526 million from $ 341 million with a 2 percentage point increase in margin (p.p.), to 5% from 3%.
According to the audited consolidated financial results for 2020, published by the company, its revenue decreased by 3%, to $ 10.453 billion, EBITDA increased by 82%, to $ 2.204 billion, with a margin increase of 10 p.p., up to 21% from 11%.
The company’s total debt for 2020 decreased by 3% compared to 2019, to $ 2.937 billion from $ 3.032 billion, while the amount of cash tripled to $ 826 million from $ 274 million.
Net debt decreased by 23%, to $ 2.111 billion from $ 2.758 billion.
Capital investments decreased by 37%, to $ 663 million from $ 1.055 billion.
“Last year, the COVID-19 pandemic brought much of the global economy to a standstill. I am proud to report that Metinvest again proved able to navigate profound market challenges. We achieved higher margins and carried out key investment projects. We also protected our employees and communities while making progress on our environmental, social and governance (ESG) agenda,” Yuriy Ryzhenkov, the Chief Executive Officer of Metinvest, said commenting on the results.
“Our number one priority as the pandemic emerged was to safeguard our employees and local communities. We took firm and immediate steps, implementing enhanced health protocols at all assets and switching administrative staff to work remotely. We also supplied test kits and oxygen equipment to local healthcare institutions,” he said.
“After ensuring the safety of our people, the next task in our COVID-19 response was to maintain uninterrupted production across our assets. We ultimately delivered strong operational results, reflecting the positive effect of investments implemented in recent years,” he noted.
“Anticipating a difficult external environment, the group took the decision to reduce CAPEX in 2020, while maintaining it at a decent level. Key projects completed include launching the new down coiler at Illich Steel Mill’s modernized hot strip mill and upgrading the beneficiation facilities at Central GOK. We are carrying out a planned review of the Technological Strategy 2030 to ensure that projects bring maximum benefits,” he added.
“At the same time, Metinvest’s focus on operational improvements to ensure global cost competitiveness yielded a total effect of $ 376 million in 2020. We increased the efficiency of raw material and energy consumption, improved equipment productivity, streamlined logistics, enhanced the product mix and more,” the director said.
Revenue of Metinvest B.V. (the Netherlands), the parent company of the Metinvest mining and metallurgical group, in November 2020 increased by 8.4%, or $73 million, compared to the previous month, to $941 million from $868 million.
According to the published preliminary unaudited consolidated monthly results of the company’s financial statements, the overall rate of EBITDA amounted to $263 million in November, which is $23 million more than in October ($240 million), while EBITDA from participation in the joint venture was $53 million (in October $56 million).
According to the financial statements, the adjusted EBITDA of the metallurgical division of the group for November 2020 amounted to “plus” $136 million (in October, “plus” $140 million), including $10 million from participation in the joint venture ($9 million); EBITDA of the mining division – $142 million (in October $128 million), including from the joint venture – $43 million ($47 million). The management company spent $8 million ($7 million).
Total revenue in November consisted of $759 million ($689 million in October) for the metallurgical division, $268 million ($228 million) for the mining division, and intragroup sales of $86 million ($49 million).
The total debt of the company in November increased by $8 million compared to October, to $2.940 billion from $2.932 billion, whiles the amount of cash increased by $101 million, to $813 million from $712 million.
Funds used in investment activities amounted to $81 million and in financial activities to $71 million.
Metinvest received $61 million from the resale of square billets (produced by PJSC Dniprovsky Metallurgical Plant of the Industrial Union of Donbas corporation) in November in the amount of 138,000 tonnes. In addition, $120 million was received from the resale of 225,000 tons of flat-rolled products, 67,000 tonnes of long rolled products for $34 million, and 113,000 tonnes of cast iron for $44 million.
In general, the company in November sold 517,000 tonnes of semi-finished products for $222 million, 801,000 tonnes of finished metal products for $454 million, and 165,000 tonnes of coke for $34 million.
In November, the group sold 1.589 million tonnes of iron ore for $172 million, and 49,000 tonnes of coal concentrate for $6 million.
Metinvest, the largest Ukrainian mining and metallurgical holding, in 2020 increased steel production by 9% compared to 2019, to 8.268 million tonnes, cast iron by 7%, to 8.475 million tonnes, and total coke production by 3%, to 4.808 million tonnes.
According to a press release from the parent company Metinvest B.V. on the results of operating activities for 2020, the group in the fourth quarter of 2020 reduced the production of cast iron by 9% compared to the previous quarter, to 2.105 million tonnes due to a decrease in production at both Mariupol plants.
Thus, the decline at Illich Iron and Steel Works amounted to 137,000 tonnes, as blast furnace No. 3 was shut down for a major overhaul in November 2020 and at Azovstal to 63,000 tonnes amid less intensive blast furnace operations due to a planned overhaul of the air separation unit’s oxygen block and changes in the burden composition.
Steel production in the fourth quarter of 2020 decreased by 3% compared to the previous quarter, to 2.118 million tonnes, mainly due to an overhaul of basic oxygen furnace No. 2 at Azovstal in September-October 2020. At the same time, the volume of steel production at Illich Iron and Steel Works remained practically unchanged compared to the previous quarter as hot metal was reallocated to steelmaking.
In 2020, cast iron production increased by 7% compared to last year amid greater production at both Mariupol plants. At Azovstal, production climbed by 328,000 tonnes, as the highly efficient blast furnace No. 3 was launched following its major overhaul and upgrade in June 2019 and a planned major overhaul of blast furnace No. 2 in the fourth quarter of 2019.
At Illich Iron and Steel Works, output increased by 219,000 tonnes, mainly due to a low-base effect caused by the shutdown of blast furnaces No. 3 and 5 for planned overhauls in 2019.
Steel production in 2020 increased by 9% year-over-year mainly due to an increase in production at Illich Iron and Steel Works by 512,000 tonnes amid the reallocation of hot metal to steelmaking. The increase in production at Azovstal by 178,000 tonnes was caused by an increase in hot iron production.
In the fourth quarter of 2020, the production of semi-finished products decreased by 17% compared to the previous quarter, to 816,000 tonnes. At the same time, the decrease in cast iron production amounted to 107,000 tonnes as hot metal was redirected to make steel and downstream products at Illich Iron and Steel Works, and marketable slab to 57,000 tonnes due to the redistribution of slab in favor of flat-rolled products. In 2020, the production of merchant semi-finished products increased by 5% compared to 2019, to 3.313 million tonnes as Mariupol plants boosted merchant slab output by 329,000 tonnes in response to greater demand. Consequently, cast iron production declined by 14% y-o-y to 1.088 million tonnes.
In 2020, production of finished goods increased by 4% compared to the previous year, to 5.833 million tonnes. Namely: the production of flat products increased by 132,000 tonnes, to 4.809 million tonnes; the production of long products increased by 80,000 tonnes, to 794,000 tonnes; the production of rail products increased by 30,000 tonnes, to 79,000 tonnes amid an increase in orders from the Ukrainian railways; and the production of tubular products decreased by 4,000 tonnes, to 151,000 tonnes.
In the fourth quarter of 2020, coke production increased to 1.224 million tonnes.
Inhulets mining and processing plant (InGOK, Kryvy Rih, Dnipropetrovsk region), part of Metinvest Group, in 2020 increased production of iron ore concentrate, according to recent data, by 7.7% compared to the previous year, to 11.9 million tonnes.
The enterprise told Interfax-Ukraine that in December it produced 1.019 million tonnes of concentrate with a 66.13% iron content, while extracted 2.608 million tonnes of crude ore.
As reported, InGOK in 2019 increased production of iron ore concentrate by 1.2% compared to the previous year, to 11.052 million tonnes.
The enterprise specializes in extraction and processing of ferruginous quartzites of Inhulets deposit, located in the southern part of the Kryvy Rih iron ore basin. It produces two types of iron ore concentrate with an iron content of 64.8% and 67%.
The production capacity is 14 million tonnes of iron ore concentrate per year.
InGOK is part of Metinvest Group, the main shareholders of which are PrJSC System Capital Management (SCM, Donetsk, 71.24%) and the Smart-Holding (23.76%).
Metinvest Group’s management company is Metinvest Holding LLC.
Mariupol Illich Iron and Steel Works (Donetsk region), a member of the Metinvest Group, in 2020 increased the production of general rolled products, according to recent data, by 12.4% compared to the previous year, to 3.67 million tonnes.
As the enterprise told the Interfax-Ukraine, steel production during this period increased by 13.7%, to 4.05 million tonnes, cast iron by 4.4%, to 4.65 million tonnes, and sinter by 12.8%, to 12.34 million tonnes.
In December, Mariupol Illich Iron and Steel Works produced about 320,000 tonnes of general rolled products, 345,000 tonnes of steel, 330,000 tonnes of cast iron, and 1.06 million tonnes of sinter.
Illich Iron and Steel Works is part of Metinvest Group, the main shareholders of which are SCM Group (71.24%) and Smart-Holding (23.76%), jointly managing the company.
Metinvest Holding LLC is the managing company of Metinvest Group.
ILLICH IRON AND STEEL, MARIUPOL, METINVEST, METINVEST’S COMPANIES, STEEL
