Metinvest B.V. (the Netherlands), the parent company of the Metinvest international vertically integrated mining and metal group, cut net profit by 71.5% in 2019 compared with 2018, to $341 million from $1.188 billion with the decline in margin by 7 percentage point (pp), from 10% to 3%.
According to the audited consolidated financial results for 2019 released by the company on Wednesday, its revenue for decreased 10%б to $10.757 billion, earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 52%, to $1.213 billion with a drop in margin of 10 pp, to 11% from 21%.
The total debt of the company in 2019 increased 11% compared to 2018, to 3.032 billion from $2.743 billion. At the same time, cash and cash equivalents decreased 2%, to $274 million from $280 million.
Net debt grew by 12%, to $2.758 billion.
Capital investment increased 17%, to $1.055 billion from $898 million.
The main shareholders of Metinvest are SCM Group (71.24%) and Smart Holding (23.76%), jointly managing the company.
Metinvest Holding LLC is the managing company of Metinvest Group.
Metinvest B.V. (the Netherlands), the parent company of Metinvest mining and metallurgical group, has reduced its debt on pre-export financing by $75 million, to $406 million by early repayment of part of this debt.
According to the company’s press release, this move exempts Metinvest from scheduled payments of the principal amount over the next few months, which will provide greater financial flexibility for the group during the period of lower steel prices.
“This payment is the planned use of part of net proceeds from the recent issue of bonds denominated in two currencies, which was made to extend the maturity of the group’s eurobonds and received significant support from the global community of investors and the leading European financial institutions,” the press release reads.
As reported, in April 2018 Metinvest refinanced $2.271 billion in debt, issuing two tranches of bonds in the amount of $1.592 billion and received a pre-export credit line of $765 million. This is Metinvest’s largest issue of eurobonds with the lowest coupon so far and the longest maturity. It is also the largest issue of eurobonds in the Ukrainian corporate sector. The deal received significant support from the global community of investors and the leading European financial institutions. The joint managers of the transaction were Deutsche Bank, ING Bank (both London branches), Natixis (France), and UniCredit Bank (Germany).
Metinvest has completed a deal on the repurchase of $440 million eurobonds with a maturity in 2023 out of a total issue of $944.515 million through the placement of two new issues of eurobonds: $500 million due in 2029 and EUR 300 million due in 2025. The group’s debut two-currency offer, consisting of tranches denominated in U.S. dollars and euros, helped to effectively extend the maturity of $440 million 2023 eurobonds out of the amount of $944.515 million by six and a half years, while the net proceeds from the transaction amounted to approximately $350 million, the company said last week.
According to the Irish Stock Exchange, the new securities (in U.S. dollars with a coupon of 7.75% per annum and in euros with a coupon of 5.625% per annum) were admitted to circulation on October 17.
Metinvest said on the stock exchange that the total applications for the repurchase of eurobonds 2023, which were also issued with a coupon of 7.75%, amounted to $639.886 million.
As reported, the company held meetings with investors in the United States, the United Kingdom and continental Europe from September 18 to 27. The purpose of the offer is proactive management of debt repayment, extension of debt repayment terms and reduction of refinancing risks, Metinvest said.
Iron ore mines run by Ukraine’s Metinvest raised output in January-September 2019. An industry source told Interfax that Northern Mining (Pivnichny GOK) produced 6.542 million tonnes of merchant iron ore pellets in the 9M, up 1% year-on-year, including 422,000 tonnes in September; and 9.147 million tonnes of iron or concentrate, up 13.4%, including 923,000 tonnes in September.
Central Mining (Central GOK) raised merchant pellet output 0.1% in 9M 2019 to 1.779 million tonnes and concentrate 1.8% to 3.259 million tonnes, including respectively 209,000 tonnes and 390,000 tonnes in September.
Inhulets Mining (INGOK) reduced concentrate output 0.9% in 9M to 8.351 million tonnes, including 918,000 tonnes in September.
The vertically integrated Metinvest’s main shareholders are System Capital Management (SCM, 71.24%) and Smart Holding (23.76%).
Metinvest mining and metallurgical group has placed 10-year $500 million eurobonds at 7.95% per annum and five year EUR 300 million eurobonds at 5.75% per annum, a source in banking circles has told Interfax-Ukraine.
The total demand for both tranches amounted to more than $1.1 billion in U.S. dollar equivalent.
The benchmark yield on bonds in U.S. dollars was 7.75-7.99% per annum, in euros – 5.75% per annum.
Metinvest held meetings with investors in the United States, the United Kingdom and continental Europe from September 18 through September 27.
Metinvest said on Tuesday that its offer of September 17 for a cash buyback on the amount of $440 million from $944.515 eurobonds due in 2023 with 7.75% coupon as part of the new bond issue was answered by holders of $639.391 million eurobonds.
According to the terms of the offer, other eurobond holders can still apply for redemption until October 15, inclusive, but they will no longer receive a 3% premium for early applications.
“The purpose of the offer is the proactive management of debt repayment, extending the maturity of the debt and reducing refinancing risks,” Metinvest said.
The buyback price for those who agree to sell before September 30 is 106% of the face value plus accrued interest. The results of the offer are to be summarized on around October 16 in order to carry out all settlements on October 17.
Metinvest Mining and Metallurgical Group, which on September 17 announced an offer to buy back $440 million eurobonds from the $944.515 million issue with maturity in 2023 and a 7.75% coupon and issue new bonds, has received bids for buyback from eurobond holders for $639.391 million. “The estimated scaling factor is approximately 71.265%,” Metinvest reported on the Irish Stock Exchange. According to the terms of the offer, other eurobond holders can still apply for redemption until October 15, inclusive, but they will no longer receive a 3% premium for early applications.
“The purpose of the offer is the proactive management of debt repayment, extending the maturity of the debt and reducing refinancing risks,” Metinvest said.
The buyback price for those who agree to sell before September 30 is 106% of the face value plus accrued interest.
The pricing of new eurobonds is preliminarily scheduled for October 1, the results of the offer are summarized on around October 16 in order to carry out all settlements on October 17.
A source in banking circles told Interfax-Ukraine that Metinvest had held meetings with investors in the United States, Great Britain and continental Europe from September 18 to September 27. The organizers are Deutsche Bank, Natixis and UniCredit. The company intends to place dollar-denominated eurobonds with a maturity of eight to ten years, and will also consider the possibility of a tranche in euros for five to seven years.
