Moscow, Russia - 14 March 2019 - Metalloinvest ("the Company"), a leading global iron ore and HBI producer, and one of the regional producers of high-quality steel, today publishes its audited IFRS financial results for the full year ended 31 December 2018.

FINANCIAL HIGHLIGHTS

• Revenue USD 7,187 mn (+15.3% y-o-y)
• EBITDA USD 2,934 mn (+38.4%)
• EBITDA Margin 40.8% vs. 34.0% in 2017
• Net Income USD 1,647 mn (+17.1%)
• Net Debt USD 3,358 mn (-17.2% compared to 31 December 2017)
• Net Debt/EBITDA 1.1x vs. 1.9x as of 31 December 2017
• Capital Expenditure USD 441 mn (-9.8%)

PRODUCTION HIGHLIGHTS

• Iron ore 40.4 mn tonnes (+0.2%)
• Pellets 27.7 mn tonnes (+10.2%)
• HBI/DRI 7.8 mn tonnes (+12.1%)
• Hot metal 3.0 mn tonnes (+12.6%)
• Crude steel 5.1 mn tonnes (+6.2%)

KEY CORPORATE HIGHLIGHTS

Operational developments and capital expenditure

• Completion of vacuum degasser modernisation at the EAF shop at Ural Steel
• Launch of commercial operations at concentrate intake facility at MGOK
• Launch of integrated financial and business management system, using the SAP S/4HANA business suite at LGOK and MGOK
• Launch of the Roller Treatment Furnace #1 and Heat Treatment Machine #1 Сomplex at Ural Steel
• Launch of new warehouse for the storage and shipment of finished products at OEMK
• Completion of the first modernisation stage of PP-3 at MGOK resulting in its productivity increase by 5% per year
• Completed works for the first launch complex of the external power supply network at LGOK
• Coordination meetings with KAMAZ, TMK, United Metallurgical Company and ChelPipe

Financing

• Refinancing of USD 240 mn pre-export credit facilities (PXF) with a new PXF raised in 2018
• Keeping the Company's series 02 and 03 bonds for a total amount of RUB 10 bn in the market for 5 years with a coupon rate set at 7.65%, following the successful execution of a put option
• Signing of a EUR 72 mn credit facility agreement with Crédit Agricole CIB guaranteed by export credit agency (ECA) for financing the purchase of equipment
• Improvement of commercial terms under the syndicated loan PXF-2017 for the amount of USD 800 mn (tranche A)
• Partial refinancing of loan portfolio following the new 6-year loan provided by Gazprombank in the amount of RUB 18.8 bn
• Extension and improvement of commercial terms under revolving credit line agreement with ING Bank for the amount of USD 200 mn (or EUR equivalent)
• Upgrade of outlook on Metalloinvest's ratings by Moody's Investors Service, RAEX (Expert RA) and Fitch Ratings to Positive from Stable

 

Andrey Varichev, CEO of Management Company Metalloinvest, commented:

"In 2018, the Company continued to deliver on its strategy to increase the production volume of high value-added products. In the reporting period, the production of pellets and HBI/DRI amounted to a record 27.7 mn tonnes and 7.8 mn tonnes respectively. The Company's focus on increasing its production of high value-added products, favourable market conditions, and the implementation of its operational improvement programme allowed Metalloinvest to demonstrate steady growth in its financial results. In 2018, revenue increased by 15.3% y-o-y, while EBITDA grew by 38.4%."

Alexey Voronov, Finance Director of Management Company Metalloinvest, added:

"In 2018, we continued to improve commercial terms of the Company's loan portfolio, as well as to introduce the best corporate governance practices. Our work has resulted in a reduction of average debt servicing costs, decrease of Net Debt/EBITDA ratio to a record 1.1x since 2011, and a reduction of 2019 scheduled loan payments to almost zero. In the reporting period, the international credit rating agencies Moody's and Fitch and the Russian rating agency Expert RA revised the outlook on Metalloinvest's rating to Positive from Stable."

 

Full press release and financial statements are available at:

http://www.metalloinvest.com/en/investors/financial-results/

 

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For further information, please contact:

 

Artem Lavrishchev

Director of Investor Relations and Corporate Ratings

E: ir@metalloinvest.com

Т: +7 (495) 981-55-55

  

 

Metalloinvest is a leading global iron ore and merchant HBI producer and supplier, and one of the regional producers of high-quality steel. The Company has the world's second-largest measured iron ore reserve base and is one of the lowest-cost iron ore producers.

Metalloinvest is wholly owned by Holding Company USM LLC. Alisher Usmanov is the major beneficiary of USM Holdings (49%), with other major beneficiaries being the companies of Vladimir Skoch (30%) and Farhad Moshiri (8%).