Metinvest Mining and Metallurgical Group, including its associates and joint ventures, increased its payments of taxes and fees to the budgets of all levels in Ukraine by 56% year-on-year to UAH 9.9 billion in January-June this year.
According to the company’s press release on Monday, the largest payment is the subsoil use fee, which more than tripled to UAH 2.9 billion in the first half of 2023. The second largest payment was the unified social tax of UAH 1.8 billion, up 19%. The top three largest payments were made in the form of UAH 1.7 billion in personal income tax, up 16% year-on-year.
At the same time, Metinvest’s Ukrainian enterprises paid UAH 1.4 billion in corporate income tax in January-June 2024, up 26% compared to January-June 2023. Land payments increased by 7% to UAH 631 million and environmental tax by 22% to UAH 368 million.
Yuriy Ryzhenkov, CEO of Metinvest, stated that the group has overcome many challenges during the war, but many challenges are still ahead.
“Our efforts to rebuild our business to operate in the new environment and our ability to turn problems into opportunities have paid off – tax payments are growing. This is our contribution to supporting the economy of Ukraine and the regions near the frontline where the company’s enterprises operate. We allocate significant resources to help the army and civilians, continue to make plans for a peaceful future and are ready to participate in the post-war revival of the country,” the top manager emphasized.
As reported earlier, Metinvest almost doubled its tax payments to the Ukrainian budget in the first quarter of 2024 to UAH 4.2 billion. In 2023, the company paid UAH 14.6 billion to the Ukrainian budget.
“Metinvest is a vertically integrated group of steel and mining companies. The Group’s enterprises are mainly located in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions.
The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
Metinvest Mining and Metallurgical Group has spent $209 mln to support Ukraine and its citizens since the beginning of the full-scale war, of which 57% for the army within the framework of Rinat Akhmetov’s Steel Front militarized initiative, 23% for employee assistance, 17% for humanitarian and other projects, and 4% for medical assistance.
According to Metinvest’s presentation at the Barclays ESG Emerging Markets Corporate Day, dated June 26 of this year, the group provided protective equipment to the personnel of the Ukrainian Armed Forces, the National Guard, the National Defense Forces and the National Police in support of the military.
At the same time 370 mobile shelters, 150 thousand bulletproof vests, most of which are made with Metinvest armored steel plate, 25 thousand helmets, 2000 thermal imagers and other equipment were purchased and sent to the military. The company manufactured and supplied the defenders of Ukraine with 250 fake military equipment targets, 80 thousand anti-tank hedgehogs and spiked chains, 70 mobile buggies and 5,000 field ovens.
More than 4,900 reconnaissance drones were also sent to the military. To protect Ukraine on the water, the group donated 10 high-speed boats and 800 self-inflating life jackets.
Metinvest’s Ukrainian assets donated 520 vehicles, 100 ambulances and 1.4 million liters of fuel to the front lines. The group also invested in the construction of a mine action center to train specialists in demining areas after combat operations.
As part of humanitarian and other projects, Metinvest, together with other SCM companies and with the assistance of the Rinat Akhmetov Foundation, in particular, created and finances the “Saving Life” humanitarian aid center with the provision of food and other essentials.
As part of medical aid, the company supplies vital medicines, equipment and consumables to local hospitals. The Group financed the development of medical services and reconstruction of hospitals. Together with the Puls charitable foundation, the group promotes the development of tactical medicine.
Social projects include supporting its employees and their families by providing psychological services, introducing an additional bonus for employees, and developing a program for veterans of the AFU. In 2023, the group’s workforce decreased by 7% year-on-year, with about 6,000 employees serving in the defense forces at the end of last year.
Amid the war, the group has focused on improving safety at work – health and safety expenditure increased by 16% in 2023 compared to 2022.
“Metinvest is a vertically integrated group of mining and metallurgical companies. The group’s enterprises are located primarily in Donetsk, Luhansk, Zaporizhzhya and Dnipropetrovsk regions. The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the holding. Metinvest Holding LLC is the management company of Metinvest Group.
In 2022-2023, Metinvest Mining and Metallurgical Group invested UAH 23 billion in the modernization of Kametstal and Zaporizhstal steel plants and the green transformation of the enterprises.
Metinvest’s Chief Operating Officer (COO), Oleksandr Myronenko, said during the discussion “The largest wartime investors: a look into the future” at the Forbes Ukraine forum “Money for Victory” that the company’s priority areas for investment in 2024-2025 are employees, equipment and assistance to the Ukrainian Armed Forces.
“We have three key priorities. The first is our employees. The second is equipment and production sites. And the third is to support the Armed Forces. Especially in the cities where our enterprises are located. These are Zaporizhzhia and Pokrovsk, located 40 kilometers from the front line. We must support the units that defend these cities,” said Mr. Myronenko.
He added that the company’s employees are paid an increased bonus, which reaches 20-50% of their salary, and that starting May 1, salaries were increased by up to 20% depending on their specialty.
Metinvest’s COO noted that in 2024, the company plans to invest $320 million in capital and about $350 million in operating investments in equipment and work sites.
“These are investments aimed at maintaining our equipment: repairs of blast furnaces and sintering machines, maintenance of equipment at mining and processing plants and development of mine management in Pokrovsk,” explained the top manager.
According to him, the company is currently operating at 65%-70% of its capacity. “And we clearly understand that when the hostilities end and the infrastructure is fully restored, we will need to accelerate – at the expense of people and equipment,” he said.
Mironenko added that the company has already allocated more than UAH 6 billion for humanitarian and military support to Ukraine since the start of the full-scale war. And now Metinvest is allocating about UAH 200 million a month to build fortifications and support brigades from Dnipro to Donetsk.
“We have a clear strategy for the development of Ukrainian and foreign enterprises. Now it is very difficult to persuade banks to finance any projects in Ukraine. We estimate the full transition of Ukrainian enterprises to green metallurgy within 10 years after the end of the war at about $9 billion,” the COO said.
He also said that the company would not be able to implement such a project on its own and would need to attract external financing. Since this option is currently not possible, Metinvest is considering a joint project with Danieli to build a steel plant in Italy, with an estimated investment of about $2 billion.
“The Ukrainian economy will benefit from the implementation of such a project. We will be producing energy-efficient green steel at a very low cost because we have our own resource – iron ore in Kryvyi Rih. From this point of view, we believe that the Ukrainian-Italian joint venture will be much more efficient than a European-only production facility and will be able to compete with European producers,” said Mr. Myronenko.
Metinvest’s COO also noted that the company’s operations are currently being negatively affected by the mobilization of personnel, as one in six employees is serving in the Armed Forces. “This is a big challenge in relations with the government. And it has a bigger impact on our operations than any commercial disputes,” the top manager stated.
He also emphasized that Metinvest buys equipment, drones, electronic warfare devices, etc. for the Armed Forces of Ukraine. There are also two proprietary developments that the group has already codified and certified with the Ministry of Defense and will now begin official deliveries. These are corrugated steel shelters and mine trawls that are installed on tanks.
The SSO clarified that the shelters produced by Metinvest are half the price of those currently purchased by the country, and the situation with mine trawls is about the same.
“The second thing we do is to make anti-submarine shelters for equipment. For example, Abrams, which are now fighting in the Donetsk sector, will be completely covered with our anti-water nets, and this will enhance their protection. We are also developing and already installing such shelters on Soviet-made T-64 and T-72 tanks. And there are many other things we are doing to make our soldiers feel protected,” summarized Mr. Myronenko.
“Metinvest is a vertically integrated group of steel and mining companies. Its enterprises are located in Ukraine – in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions, as well as in Europe.
The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it. Metinvest Holding LLC is the management company of Metinvest Group.
METINVEST, MODERNIZE, steel plants, ZAPORIZHSTAL, Каметсталь
In 2023, Metinvest B.V. (Netherlands), the parent company of Metinvest Mining and Metallurgical Group, increased capital investments in Metinvest Pokrovskugol, which manages the enterprises of Pokrovskoye Coal Group (PGU), by 15.6% year-on-year to $126 million from $109 million.
According to a corporate presentation published on the Irish Stock Exchange on June 4, Metinvest increased its capex investments in Kametstal by 5% in 2023, to $42 million from $40 million.
Capex at Central GOK increased by 6.7% to $16 million from $15 million.
At the same time, the Group reduced investments in Northern GOK by 29.5% to $31 million from $44 million, in United Coal (USA) by 47.5% to $21 million from $40 million, in Ingulets GOK by 58.1% to $13 million from $31 million, and in other assets by 53.3% to $35 million from $75 million.
In general, Metinvest reduced its capital investments in 2023 by 19.8% compared to 2022, to $284 million from $354 million, while $65 million was invested in the steel segment last year ($99 million in 2022) and $213 million in the mining sector ($244 million).
At the same time, it is noted that the share of the mining segment in 2023 increased to 75% of total investment (+6% compared to 2022), the share of investments in capital repairs increased to 86% of total expenditures (an increase of 6% compared to 2022), while strategic investments amounted to 14% of the total.
The priorities of capital expenditures affected by the war were affected by the implementation schedules of strategic projects in accordance with the actual production configuration and the identified optimization measures. At the same time, the development of the strategy for key projects is ongoing. Maintenance projects continue to be implemented to ensure an adequate level of output capacity and provide technology to increase production at the Ukrainian assets after the end of the war.
In addition, the group has taken a number of measures to minimize potential damage in case of emergency power outages.
As reported, Metinvest’s consolidated net loss in 2023 amounted to $194 million, while in 2022 it reached $2.193 billion (down 11 times). Revenue fell by 11% from $8.288 billion to $7.397 billion in 2022, while EBITDA fell by 54% to $861 from $1.873 billion. At the same time, the steel sector’s revenue decreased by 15.2% to $4.846 billion, and the mining segment’s revenue decreased by 0.8% to $2.551 billion. Adjusted EBITDA of the Group’s steel division decreased by 40.4% to $159 million, and of the mining segment by 50.2% to $770 million.
“Metinvest is a vertically integrated group of steel and mining companies. Its enterprises are located in Ukraine – in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions, as well as in Europe.
The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
CENTRAL GOK, INVESTMENTS, METINVEST, Каметсталь, Покровскуголь
“In January-March this year, Metinvest reduced steel production by 4% year-on-year and by 5% quarter-on-quarter to 469 thousand tons, according to a press release from the parent company Metinvest B.V.
According to the release, pig iron production decreased by 10% compared to Q1-2023 and by 5% compared to Q4-2023, to 448 thousand tons, and coke production by 11% and 3%, respectively, to 283 thousand tons. In particular, in 1Q2024, Kametstal produced 403 thousand tons of pig iron and 469 thousand tons of crude steel, which is lower than in 2023 and is mainly due to the shutdown of blast furnace No. 9 for scheduled overhaul in March 2024.
In 1Q2024, the output of semi-finished products amounted to 166 thousand tons, down 5% compared to 1Q2023 and 41% quarter-on-quarter, mainly due to the shutdown of BF-9 at Kametstal for repairs, as well as an increase in domestic consumption at downstream stages.
In the first quarter of 2024, finished product output increased by 4% quarter-on-quarter and by 8% year-on-year to 584 thousand tons. At the same time, flat products output increased by 12% compared to Q1-2014, but decreased by 1% compared to Q4-2013, to 282 thousand tonnes, due to an increase in the order book at rolling mills in Italy and the UK, while long products output decreased by 3% compared to Q1-2013, and increased by 17% compared to Q4-2014, to 302 thousand tonnes.
In particular, hot-rolled plate output increased by 8% year-on-year to 253 kt due to a shift in the order book in favor of these products at Ferriera Valider in Italy; galvanized cold-rolled coil output doubled year-on-year to 29 kt. tonnes due to the resumption of galvanized cold-rolled steel production in Italy; production of galvanized cold-rolled coils doubled year-on-year to 29 thousand tonnes. kt due to the resumption of production at Unisteel in Ukraine amid more stable electricity supplies in the first quarter of 2024 than in the first quarter of 2023; long products output increased by 17% as billet production at Kametstal stabilized and supplies to Promet Steel in Bulgaria returned to normal.
It should be noted that on February 24, 2022, Russia launched a full-scale military invasion of Ukraine. The Group’s plants in Ukraine, except for Mariupol and Avdiivka, continue to operate at different levels of capacity utilization, taking into account safety, personnel, electricity, logistics and economic factors.
In the first quarter of 2024, coke production decreased by 11% year-on-year and by 3% quarter-on-quarter to 283 thousand tons after some cells of coke oven battery No. 1 at KAMETSTAL were shut down.
It is also reported that Metinvest increased its total production of iron ore concentrate by 2.1 times year-on-year to 4.859 million tons in January-March 2024, pellets by 31% to 1.585 million tons, and total coking coal concentrate production decreased by 26% to 1.086 million tons.
“As a result, in the first quarter of 2024, iron ore production increased by 36% quarter-on-quarter to 4.859 million tons; production of commercial iron ore products increased by 41% quarter-on-quarter to 4.403 million tons; production of saleable iron ore concentrate increased by 53% quarter-on-quarter to 2.818 million tons; production of saleable pellets increased by 23% quarter-on-quarter to 1.585 million tons, partly due to increased orders for pellets,” the press release states.
The unblocking of Ukrainian ports on the Black Sea and an increase in the order book for pellets had the following effects in 1Q2024 compared to 1Q2023: gross iron ore concentrate output increased by 2.2 times, commercial iron ore products by 2.3 times, commercial iron ore concentrate by 4 times, and commercial pellets by 31%, the report says.
The press release explains that the Group’s decrease in coal concentrate output by 4% quarter-on-quarter and 26% year-on-year was due to a 6% drop in production at Metinvest Pokrovskugol in Q4 2021 and a 9% drop in production in Q1 2021, to 640 thousand tons, and a deterioration in the quality of coking coal and a decline in production. At the same time, the production of coal concentrate at United Coal (USA) remained almost at the same level as in the previous quarter – 446 thousand tons, but decreased by 41% due to the downtime of the Carter Roag mine and a decrease in production at some Wellmore mines.
As reported, in 2023, Metinvest increased its total production of iron ore concentrate by 4% compared to 2022 to 11.092 million tons, pellets by 66% to 5.283 million tons, and total coking coal concentrate production increased by 10% to 5.455 million tons.
In 2023, the Group decreased steel production by 31% compared to 2022 to 2.025 million tons, pig iron by 36% to 1.765 million tons, and coke by 25% to 1.241 million tons.
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the United States. Metinvest’s major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the company. Metinvest Holding LLC is the management company of Metinvest Group.
“Metinvest Group comprises mining and metallurgical enterprises located in Ukraine, Europe and the USA.
The major shareholders of Metinvest are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the company.
Metinvest Holding LLC is the management company of Metinvest Group.
In 2023, Metinvest Group’s Central, Ingulets and Northern Mining and Processing Plants (GOKs) implemented investment projects aimed at ensuring the stability of production processes and overhauling machinery and equipment, using a total of UAH 2.3 billion.
According to the company’s press release, last year, Metinvest’s Kryvyi Rih mining enterprises invested in projects to improve productivity, product quality, ensure the smooth operation of key equipment, and reduce the cost of producing iron ore.
The main projects implemented last year at Pivdennyi GOK included the modernization of sections and the installation of a new economical engine on the 2TE10M diesel locomotive, which is used to transport ore from the Pervomaisky open pit to the first crushing plant. It also includes the installation of roller screens for raw pellets at the LURGI-552A roasting machine to maintain competitive positions in the European iron ore market.
To ensure that the concentrate moisture content is met, a new vacuum filter was installed at Ore Dressing Plant No. 1 and a vacuum pump was replaced at Ore Dressing Plant No. 2.
Last year, Central GOK completed an important energy efficiency project. Pumping equipment was replaced at the facilities of the sludge management and technical power supply shops to reduce electricity costs. The company also launched a project to build a complex of treatment equipment to provide the plant’s facilities with drinking water.
The report emphasizes that even in the midst of the war, the program to improve working conditions at the plant continues. Repairs were carried out in the canteens of the Petrovsky open pit, crushing and concentrating plants. The crusher’s administrative and amenity building had its showers overhauled.
Last year, the bulk of capital investments at Ingulets Mining and Processing Plant were directed to projects to maintain production capacity, namely the reconstruction of the tailings dump. To ensure the smooth operation of the technological chain for the extraction and production of concentrate, the plant is preparing additional tanks for storing production residues.
Another major project of the year, which will ensure the development of mining operations at InGOK, concerned the rebuilding of railway tracks at the open pit horizons and the extension of the open pit and dump railroad dead ends.
A significant portion of the GOK’s investments was directed to overhauling machinery and equipment. To ensure uninterrupted mining and transportation of rock mass, the enterprises repaired dump trucks, bulldozers, dump trucks, motor-wheel sets, railway tracks and switches. Crushing and processing plants overhauled sections, crushers, dredgers, grab cranes, floors and fencing structures.
To maintain pellet production at the required level, the roasting machines LURGI 552 A and LURGI 552 B at Northern GOK and OK-324 at the pelletizing plant of Central GOK were shut down for repairs. At the same time, the companies implemented a number of projects to save energy, organize a safe working environment, maintain infrastructure facilities, etc.
“In total, in 2023, Kryvyi Rih GOKs utilized a total of UAH 2.3 billion in investments to maintain production capacity. During the war in 2022-2023, Metinvest Group was recognized by Forbes Ukraine as one of the largest Ukrainian investors. The company’s capital investments during that time amounted to UAH 22.7 billion. Currently, Metinvest’s investment strategy is focused on maintaining the operability of its assets,” the press release states.
As reported earlier, Metinvest is implementing a new model for its Kryvyi Rih mining operations by uniting its mining and processing plants in Kryvyi Rih under a single management.
“Given the current challenges, with no objective way to bring the workload of the GOKs to the optimal level, we are looking for the effect of combining their capabilities and business processes. To this end, the company sees its GOKs not as separate facilities with separate teams, but as one large production site and one large team, and tries to use the advantages of each GOK in a single technological chain. The creation of a single administrative and management center, so to speak, a consolidated GOK, will significantly simplify, speed up and increase the efficiency of these processes, as well as contribute to the creation of new synergies between the enterprises,” explained Yuriy Ryzhenkov, CEO of Metinvest, earlier.
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the United States. Its major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
Metinvest Holding LLC is the management company of Metinvest Group.
