Metalloinvest falls because of cheap ore prices

The fall in prices on the global market of iron ore has decreased the financial performance of the largest Russian producer Metalloinvest. In the first six months of this year, the company reduced its revenue by 31% to $2.4 billion, and the net profit - by 5.8%, to $517 million. Analysts don’t expect any significant improvement in the situation on the ore market: in the major producing countries, like Russia, any increase in theexport of raw materials against the background of the devaluation of the national currencies, and the key Chinese demand could drop significantly because of the devaluation of yuan.

Metalloinvest has published its financial results under IAS in the first six months of the current year, reduced almost all indicators, except EBITDA margin. The revenues decreased by 31% to $2.4 billion, EBITDA fell by 20.2% to $872 million, and the net profit made up $517 million, which is by 5.8% less than in the previous year. At the same time, the EBITDA margin of Metalloinvest increased by 4.9 percentage points to 35.8%, while the capital expenditures decreased by a third to $198 million. Also, the company, as compared with the end of the year, significantly reduced its net debt (by 12.2% to $3.67 billion) and the improved the ratio of the debt to EBITDA - from 2.13 to 2.11.