Metinvest Mining and Metallurgical Group’s consolidated revenue in the first half of 2024 amounted to $4.319 billion, up 22% to the first half of 2023, this result is mainly due to a 63% increase in sales to $1.847 billion of the mining segment due to the easing of logistical restrictions for Ukrainian exports and increased demand for pellets.
“The Black Sea corridor has enabled the sale of iron ore products to China… External revenues of the steel and mining segments grew by 2% and 63% year-on-year respectively, with the steel segment accounting for 57% and the mining segment 43% of total revenues,” the company said in a report Friday evening.
According to it, adjusted EBITDA increased to $650 million, up 33% due to improved performance in both segments, with the metals segment contributing 25% and the mining segment 75%.
Total debt and net debt decreased by 12% and 4%, respectively, to $1.740 billion and $1.284 billion. It is noted that the group managed to repay more than $500 million of debt from the start of full-scale invasion until the end of June 2024.
Providing microcredits “Ukr Credit Finance” (TM “CreditKasa”) and “1 Safe Agency of necessary loans” (TM “MyCredit”) received the highest revenue among financial companies in 2023 – respectively UAH 3.12 billion and UAH 2.33 billion, the National Bank reported on its website.
The next three companies were formed by FC “E Groshi Kom”, “Miloan” and “Aventus Ukraine” (TM CreditPlus), whose revenue amounted from UAH 1.66 billion to UAH 1.46 billion.
According to the results of 2022, the leaders in terms of revenue were Finod LLC, engaged in currency exchange and deprived of all licenses by the National Bank in August 2023, and Novapey payment system, the data of which the National Bank stopped publishing after re-licensing of payment systems. The net income of these companies in 2022 amounted to respectively UAH 5.41 and 5.18 billion, while the places from third to fifth were taken by “Ukr Credit Finance”, “Aventus Ukraine” and “E Groshi com” with revenue from UAH 2.50 billion to UAH 1.27 billion.
According to the results of 2023, net income over UAH 1 billion was received by five more companies, of which only one is not from the microcredit market: the network of payment terminals FC “Kontraktovy Dom” (TM “Easypay”), which received UAH 1.38 billion.
Following with relatively close revenue figures – from UAH 1.33 billion to UAH 1.07 billion are Lineura Ukraine (TM “Credit7”), LLC “Maniveo Fast Financial Assistance” (Moneyveo), “Consumer Center” (TM “ShvidkoGroshi”) and “Advance Credit”, which demonstrated the highest growth dynamics by the previous year among the entire top ten – almost 37 times.
Among the leaders, the highest labor costs were incurred by “Consumer Center” – UAH 167.8 million, or 13.6% of revenue, while at “Avans Kredit” they amounted to UAH 29.3 million, or 1.8% of revenue.
According to the NBU data, in 2023 the profitability of companies improved dramatically: of the 40 largest representatives of the market, all, except for the State Mortgage Institution (SMI), ended the year with net profit, which totaled UAH 1.57 billion, while a year earlier there were 15 unprofitable companies.
The leader in net profit among financial companies for the past year was PJSC “Ukrfinzhytlo” – UAH 5.94 billion. It is followed by Ukr Credit Finance – UAH 202.7 million, the State Fund for Entrepreneurship Development, the operator of state support programs – UAH 177.7 million and Bizpozyka – UAH 177.1 million.
Slightly behind was Maniveo Fast Financial Aid, which earned UAH 167.7 mln, which allowed it to partially offset UAH 625.6 mln of the previous year’s net loss.
“Ukrfinzhytlo” also significantly outperformed all and in terms of assets – 60.89 billion UAH, owing the primacy in these two categories to its capitalization at the expense of government bonds.
Avior FC specializing in lending to agrarians is next – UAH 12.05 billion, whose revenue amounted to UAH 125.4 million last year.
The other eight companies in the top ten with assets from UAH 8.68 billion to UAH 3.55 billion had no revenue last year, while salary expenses and net profit were minimal.
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
Revenue of Ukrainian catering establishments in July-December 2023 increased by 30% compared to the same period of 2022, the average check increased by 18%, according to a study by Poster.
According to it, the greatest growth of indicators demonstrated by restaurants: revenue increased by 37%, the average check – 23% (from 508 to 625 UAH). Restaurant attendance increased by 11%.
During the reporting period the segment of coffee shops increased revenue by 31%, average check increased by 20% (from 82 to 98 UAH), attendance – by 9%. Cafes grew in revenue by 26%, average check increased by 17% (from 187 to 219 UAH), attendance – by 7%. Bakeries showed growth of 22% in revenue, 17% in average check (from 63 to 73 UAH) and 5% in attendance.
According to Poster, the revenue of bars in the second half of the year increased by 28%, average check – by 12% (from 311 to 348 UAH), attendance – by 15%. Hookahs also increased their revenue by 28%, while the average check increased by 18% (from UAH 413 to 488) and attendance – by 9%.
The fast food segment increased revenue by 27% year-on-year, with the average check increasing by 21% (from 145 to 175 UAH) and attendance by 5%.
According to the results of a survey of market players, the performance of establishments in 2023 met the expectations of 44% of restaurateurs, 16% – exceeded them. About a quarter of respondents reported an increase in profitability, while 13% did not make a profit at the end of the year.
Among the main difficulties in the past year restaurateurs noted the search for employees and team retention (47%). Thus, 27% of respondents reduced their staff at the end of the year, 30% – increased.
Poster research is based on non-personalized aggregated sales data of 5 thousand catering establishments in Ukraine.
Revenue from the export of dairy products from Ukraine in September reached a record since the beginning of the year – $35.9 million, which is 9.2% more than in August 2022, and 2.45 times more than in September 2021.
According to the website of the Association of Milk Producers, such growth was facilitated by high export prices for dairy products and the preferential regime introduced by the EU for the export and transit of Ukrainian goods.
It is specified that in September Ukraine exported 4,900 tonnes of milk powder (more by 51% compared to August 2022) in the amount of $15.8 million (more by 39.8%), 1,100 tonnes of cheese (up 8.9%) worth $5.08 million (up 3.7%), as well as 327 tonnes of fermented milk products (up 19.6%).
At the same time, foreign supplies of butter in September decreased to 1,960 tonnes (down 8.25% compared to August) for a total of $11.3 million (down 5.7%), milk and whole cream – to 2,650 tonnes (down 25.7%) for $1.37 million (down 28.1%).
According to the union, whey exports fell to 1,960 tonnes in September due to problems with its delivery to the largest buyers in China and Malaysia, caused by Russian aggression.
The association clarified that the total import of dairy products to Ukraine in September decreased by 19% compared to August due to the cheap hryvnia. In general, dairy products worth $16.3 million were imported to Ukraine during the month.
It also underlined that a seasonal reduction in dairy exports should be expected in October, but its figures will still be high compared to last year.
The revenue of Arricano Real Estate Plc (Cyprus), a management company and developer of a number of shopping and entertainment centers (SECs) in Ukraine, for January-June 2022 amounted to $13.2 million, which is 22% less than the results of the first half of 2021.
According to unaudited interim results for the six months of 2022, published on the London Stock Exchange on Friday, the group’s operating profit from core activities before revaluation of investment property decreased by 27% compared to the first half of 2021 to $8.7 million.
As of June 30, 2022, the average occupancy rate was 98.4% (2021: 99.5%).
“Our operations have been drastically affected by Russia’s military invasion of Ukraine. During four of the six months reviewed, the team and tenants operate under extremely stressful conditions, in which dedication, self-sacrifice and unconditional faith in our people and country are required to continue effective operations. Thanks to their often heroic efforts, we were able to continue our business during the first months of the crisis and are now well positioned to resume growth after the end of the war and to focus on our long-term goals,” Arricano CEO Anna Chubotina was quoted in the report as saying.
The revaluation of the investment property portfolio resulted in a loss of $91.1 million due to the multiple negative financial impact of the Russian invasion (for the first half of 2021 – $9 million).
The total value of the investment property portfolio decreased to $231.1 million, down 28.7% from the December 31, 2021 value of $323.9 million.
As of June 30, 2022, operating cash flow was $8.0 million, with the group’s cash balance of $12.6 million (December 31, 2021: $8.5 million).
Net asset value almost halved to $83.2 million as of June 30 from $163.8 million as of December 31, reflecting a portfolio revaluation.
According to the report, the number of visitors to the mall after the Russian invasion of Ukraine initially fell sharply. However, as the threat to Kyiv has receded, traffic has begun to recover, reflecting the return of people who migrated to safer parts of the country at the start of the war to their homes.
“We continue to see a positive trend of increasing monthly visitor numbers, which in turn has contributed to a partial resumption of sales and cash flow. The war has a significant impact on consumer behavior, resulting in a combination of reduced purchasing power and reduced consumer confidence, and this, in turn, turn, contributes to a reduction in sales. Compared to the same period last year, there was a decrease in revenue by 22%, but a positive trend has been observed since the end of the first half of the year,” Chubotin is quoted in the report.
Despite the events of the first half of the year, Arricano opened 19 new stores and establishments across the portfolio of shopping centers, including a mix of local and international brands: Ukrzoloto, Anabel Arto, Brand Shop, BraBraBra, Zolota Krajina, Provocator, Diverse, Yabloki, ODH , Sushi take out, Doner Market and Greek House. The total area of the opened stores is 988 sq. m. m.
As noted in the message, Arricano’s business is stable and trading activity has improved since the second half of the year.
“Given the ongoing Russian invasion of Ukraine, it is difficult to predict the future; however, the company is well positioned to recover to previous levels after the end of the war. Until that time, Arricano will continue to support all of its tenants, teams and the mall community,” Chubotina assured.
Arricano Real Estate Plc specializes in the construction of shopping and entertainment centers and is one of the leading developers in the Ukrainian real estate market. Owns and manages five shopping centers in the country with a total area of 147.6 thousand square meters. m: “RayON” and “Prospect” in Kyiv, “Solar Gallery” in Krivoy Rog, City Mall in Zaporozhye. The company also owns 49.9% in the Sky Mall (Kyiv) and land plots for the further construction of three facilities that are at the design stage. The company is also building the Kyiv SEC Lukianivka.
As of September-2022, the shareholders of Arricano Real Estate Plc are Retail Real Estate O.U. together with Dragon Capital Investments Limited, Deltamax Group O.U., Yuri Pold and Rauno Teder. The total stake in Teder is 70.86%.
