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.
Metinvest Mining and Metallurgical Group has announced a tender offer to buy back up to $70 million of its Eurobonds due 2025 and 2026.
According to a stock exchange announcement by Metinvest B.V., the 2025 Eurobonds will be redeemed at a price ranging from 85% to 92% of the face value, depending on the results of the Dutch auction, while the redemption price of the 2026 bonds has not been determined and will depend on the results of the auction.
The bonds will be purchased for cash.
The offer is valid from April 29, 2024 and expires at 16:00 London time on May 8, 2024.
The Eurobonds due June 17, 2025 were issued in the amount of EUR300 million with a coupon of 5.625%, and the Eurobonds due April 23, 2026 were issued in the amount of $505 million with a coupon of 8.5%. Currently, they are outstanding by $234.195 million and $493.871 million, respectively.
“The rationale for the offer (to repurchase – IF-U) is to use the group’s liquidity outside Ukraine to actively manage the company’s debt burden, mitigate cash outflows for debt service, improve the group’s overall debt position, and reduce liquidity pressure in relation to the upcoming maturities of the 2025 bonds and 2026 bonds, given the group’s continued turbulent operating environment,” the tender offer explains.
It adds that the ongoing war in Ukraine, coupled with volatile commodity prices, presents unprecedented challenges for the company and its subsidiaries.
In addition, although as at 31 December 2023 the company and its subsidiaries outside Ukraine had sufficient cash balances to meet the company’s scheduled interest payment obligations for the foreseeable future, there are certain restrictions on the transfer of cash from its Ukrainian subsidiaries in accordance with the current decisions of the National Bank of Ukraine. And there is no guarantee that these restrictions will be lifted, the document says.
In turn, the proposals give bondholders the opportunity to reduce their risks in the context of the ongoing war. The group’s operations remain subject to a number of risks that are beyond management’s control, including, in particular, an increase in the intensity of Russian attacks on the front line; escalation of attacks on Ukraine’s energy facilities and, as a result, disruption of the availability of the energy system for the group’s operations; uncertainty about the sustainability of Black Sea shipping; staff shortages due to mobilization in Ukraine; and volatile prices for key products.
These risks may adversely affect the price of Eurobonds in the future, the tender justification states.
“Metinvest is a vertically integrated group of steel and mining companies. Its businesses are located in Ukraine – in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions – as well as in the European Union, the United Kingdom and the United States.
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, including its associates and joint ventures, increased its payments of taxes and duties to the budgets of all levels in Ukraine by 1.7 times year-on-year to UAH 4.2 billion in January-March this year.
According to the company’s press release on Monday, the largest deductions include subsoil use fees, which increased 7.5 times year-on-year to UAH 1.3 billion compared to Q1 2023. The Group also increased its personal income tax payments by 22% to UAH 791 million. In addition, Metinvest transferred UAH 870 million of unified social tax to the budget, which is 20% higher than in Q1 2023.
At the same time, Metinvest’s Ukrainian enterprises paid UAH 407 million in income tax in January-March 2024. Land payments increased by 8% year-on-year to UAH 312 million, and environmental tax by 34% to UAH 182 million.
Yuriy Ryzhenkov, CEO of Metinvest, noted that despite the war in Ukraine and many unfavorable business factors, the Group managed to achieve positive dynamics in payments.
“This is the result of our team’s efforts to improve efficiency in all areas and to adjust the company to the new environment. As the largest taxpayer in the industry, we realize that the economy of the frontline regions and the entire country, as well as the ability to support the army and Ukrainians, depend on our stable operation. And we will do everything to continue to overcome all the challenges of wartime on the way to victory,” the top manager emphasized.
As reported, in 2023, Metinvest paid UAH 14.6 billion in taxes 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 Dnipropetrovs’k 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.
“Corum Druzhkovka Machine-Building Plant (Corum DrMZ), part of the Corum Group (DTEK Energy), has started manufacturing a 200-ton hoist for Metinvest Mining and Metallurgical Group, the plant reported on Facebook.
“Metinvest’s miners have already started preparing a solid and stable foundation on the air supply shaft No. 3 to install the machine,” the statement said.
Installation of the equipment is scheduled for the fourth quarter of 2024.
The plant also reports that in March it produced 34 units of equipment and more than 111 thousand components and spare parts, including trolleys, anchors, fire pipes and high-pressure hoses, under the conditions of relocation. Also, 35 sections of powered roof supports were repaired.
Corum Group is a leading manufacturer of mining equipment in Ukraine and is part of DTEK Energy, the operating company responsible for coal mining and coal-fired power generation within Rinat Akhmetov’s DTEK holding.
“Corum DrMZ, relocated to Dnipro in 2022, earned almost UAH 500 million in net profit last year, compared to a loss of UAH 452.8 million a year earlier, while net income increased 2.7 times to UAH 1 billion 530 million.
“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the United States. Its main shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.
