According to Metinvest Group’s annual report, in 2023 Metinvest’s revenue decreased by 11% to $7.397 bln by 2022, mainly due to lower steel, iron ore and coking coal selling prices, which were in line with global rates. Also, sales volumes of pig iron, slabs, flat and tubular products were affected by the war from the suspension of production at Mariupol steel mills. At the same time, Metinvest increased shipments of other products in its portfolio (primarily billets by 6%, long products by 28%, pellets by 70% and coking coal concentrate by 32%), as well as steel and coke resales on the back of higher production at Zaporizhstal.
A significant factor supporting iron ore sales in H2 2023 was the opening of the Black Sea corridor for sales to distant markets.
Also, Metinvest’s revenue in Ukraine grew by 14% to $2.628 bln mainly due to a recovery in demand for iron ore and coking coal, as well as for flat and long products.
In turn, the group has had to make profound changes to its business operations as it continues to strive for adaptability and resilience.
“We have adjusted our supply chain and are strengthening relationships with our suppliers and customers to withstand the current conditions. At the beginning of 2023, the company experienced significant challenges, particularly due to power outages. However, by implementing the necessary changes to respond to this crisis, we were able to achieve a gradual recovery of production,” states the CEO.
He emphasized that the resumption of Ukrainian commercial shipping in the Black Sea later in 2023 was an important moment for Metinvest, allowing to increase capacity utilization. “We are cautiously optimistic about this undoubtedly positive development, while recognizing the ongoing military threats,” the top manager added.
According to him, these developments have directly impacted the group’s financial performance, improving the situation and allowing us to focus on operational efficiency, flexibility and strategic planning for future growth.
“Metinvest remains committed to servicing its debt obligations, having repaid the remaining principal amount of the group’s 2023 bonds redeemed last year on time and in full, while maintaining its deleveraging approach, Ryzhenkov said.
“Although Metinvest has focused its investments in 2023 mainly on maintaining its assets, I firmly believe that we must start preparing for the future. Our ambitions have not diminished; we have laid the foundation for Steel Dream, our visionary vision for rebuilding Ukraine. Despite the war, our commitment to a green transformation strategy also remains unchanged. This vision embodies our determination not only to dream, but also to plan a pilot project on low-carbon steel technology in Italy,” summarized the CEO.
“Metinvest consists of 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%), jointly managing it.
COKING COAL, IRON ORE, METINVEST, PIG IRON, REVENUE, ROLLED PRODUCTS, slabs, STEEL
In 2023, Metinvest Mining and Metallurgical Group sold 48% of its steel and mining products in the European Union (EU), compared to 49% in 2022.
According to the Group’s annual report, in 2023, Metinvest sold 35% of its total products in Ukraine (28% in 2022), 2% (7%) in MENA, 1% (3%) in the CIS, 7% (4%) in Asia, 6% (6%) in North America and 1% (3%) in other regions for a total of $7.397 billion ($8.288 billion).
At the same time, the share of the company’s steel segment’s revenue in the EU last year was 50% (49% in 2022), it sold 38% of its steel products in Ukraine (30%), 3% (10%) in MENA, 1% (4%) in the CIS, no supplies in Asia in 2023 or 2022, 7% (6%) in North America, and 1% (1%) in other regions for a total of $4.846 billion ($5.716 billion).
In addition, the company’s share of iron ore sales in the EU in 2023 was 44% (51%), in Ukraine – 30% (22%), in MENA – 0% (2%), in Asia – 20% (13%), in North America – 5% (6%), and in other regions – 1% (7%) for a total of $2.551 billion ($2.572 billion).
In 2023, the consolidated net loss of Metinvest B.V. (Netherlands), the parent company of Metinvest Mining and Metallurgical Group, amounted to $194 million, while in 2022 it reached $2.193 billion (down 11 times).
According to the group’s annual report, its revenue fell by 11% from $8.288 billion to $7.397 billion in 2022, and EBITDA fell by 54% to $861 from $1.873 billion.
It is specified that the revenue of the metallurgical sector decreased by 15.2% to $4.846 billion, and the mining segment – by 0.8% to $2.551 billion.
At the same time, adjusted EBITDA of the group’s steel division decreased by 40.4% to $159 million and mining segment by 50.2% to $770 million.
Metinvest’s operating profit in 2023 amounted to $445 million against an operating loss of $1.426 billion in 2022.
In addition, free cash and cash equivalents increased to $646 million from $349 million at the end of 2022.
As reported, Metinvest B.V.’s consolidated net loss in 2022 amounted to $2.193 billion compared to a profit of $4.765 billion in 2021. At the same time, revenues fell by almost 2.2 times to $8.288 billion from $18.005 billion in 2021, and EBITDA fell by 3.4 times to $1.769 billion.
Revenue of the steel sector decreased by 2.5 times to $5.803 billion, the mining segment – by 1.8 times to $3.473 billion, adjusted EBITDA of the steel division fell by 11.1 times to $0.262 billion, and the mining segment – by 2.5 times to $1.448 billion. Metinvest’s operating loss in 2022 amounted to $1.426 billion, compared to a profit of $4.933 billion in 2021.
Taking into account asset write-downs of $1.283 billion and foreign exchange losses of $1.154 billion, the group’s total loss for 2022 amounted to $4.1 billion, compared to a total profit of $5.023 billion in 2021. Free cash flows decreased by 3.3 times to $0.349 billion.
“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 Mining and Metallurgical Group sold 55% of its steel and mining products in the European Union (EU) in January-June 2023.
According to the company’s presentation at the 15th J.P. Morgan Global Emerging Markets Corporate Conference, during this period, Metinvest sold 35% of its steel products in Ukraine, 2% in MENA, 1% in the CIS and 7% in other regions for a total of $2.423 billion.
In addition, the Group sold 28% of its iron ore products in Ukraine, 10% in Asia, and 7% in other regions for a total of $1.131 billion.
At the same time, in 1H2022, Metinvest sold 48% of its steel products in the EU (50% in 2H2022), 28% (35%) in Ukraine, 13% (4%) in MENA, 6% (1%) in the CIS and 5% (10%) in other regions for a total of $3.603 billion ($2.113 billion).
In addition, the company’s share of sales of iron ore products in the first half of 2022 in the EU amounted to 45% (60% in the second half of 2022), in Ukraine – 20% (27%), in Asia – 19% (2%), in other regions – 15% (11%) for a total of $1.669 billion ($903 million).
The presentation states that sales of steel products in 1H2023 decreased by 33% year-on-year, mainly due to a 54% and 56% decrease in pig iron and flat products production at Ukrainian steelmakers amid a lack of slab sales and a decline in average selling prices. This was partially offset by increased supplies of billets (up 3%) and long products (up 14%), as well as coke (up 10%), with higher resale volumes.
The positive six-month trend in 1H2023 compared to 2H2022 (up 15%) was driven by higher sales volumes of all products, including finished products (up 22%), semi-finished products (up 7%) and coke (up 18%).
At the same time, logistical challenges continued to shape the geography of sales.
Sales of iron ore products in 1H2023 decreased by 32% compared to 1H2022, mainly due to a 44% drop in iron ore prices and reduced supplies due to the blockade of Ukrainian Black Sea ports, as well as lower intragroup consumption and a drop in local demand. The results were also affected by the negative dynamics of prices for iron ore with an iron content of 62%. This was partially offset by an increase in sales of pellets and coking coal concentrate by 43% and 42%, respectively. This resulted in significant changes in regional revenue shares.
At the same time, compared to the second half of 2022, there was a positive trend (up 25%), primarily due to an increase in sales of all products, namely pellets (up 2.1 times), iron ore concentrate (up 56%) and coking coal concentrate (up 13%).
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the USA. 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.