OREANDA-NEWS. May 29, 2012. Metinvest B.V., a parent company of the international vertically integrated steel and mining group of companies (jointly referred to as “Metinvest”), published a trading update1 for the first quarter of 2012 ended 31 March 2012.

FINANCIAL HIGHLIGHTS

Consolidated revenues were USD 3,216 million

Adjusted EBITDA2 was USD 538 million with a margin of 16.7%

Net Profit was USD 170 million with a margin of 5.3%

Total loans and borrowings as of 31 March 2012 were USD 3,556 million, comprising USD 2,563 of long-term borrowings and USD 993 million of their current portion

Seller’s Notes were USD 319 million as of 31 March 2012

Cash and cash equivalents were USD 401 million at the end of the period

Capital expenditures were USD 168 million

OPERATIONAL HIGHLIGHTS

Crude steel production was 3,296 thousand tonnes

Coking coal output was 2,970 thousand tonnes

Production of iron ore concentrate was 9,189 thousand tonnes

STEEL

Despite the seasonal slowdown in demand over Q1 2012, the Group's revenue increased marginally by 0.9% year-on-year to USD 3,216 million, primarily driven by a 9.7% growth in sales of coal and iron ore products. The Steel segment accounted for 70.7% (compared with 73.0% in Q1 2011) of external sales, with the Mining segment accounting for 29.3% (compared with 27.0% in Q1 2011).

In Q1 2012, sales of the Steel segment saw a marginal decrease of 2.3% year-on-year to USD 2,273 million, whereas sales of the Mining segment increased by 9.7% up to USD 943 million.

Sales of semi-finished products saw a decline of 16.3% (USD 152 million) in Q1, primarily driven by weaker demand for slabs, and resulted in a reduction in sales of 238 thousand tonnes year-on-year.

Sales volumes of finished steel products remained relatively unchanged year-on-year and totalled 2,278 thousand tonnes in Q1. Whilst sales volumes of flat products were down by 13.1% (209 thousand tonnes) compared to the same period last year, sales volumes of long, railway and tubular products increased noticeably by 20.7%, 73.5% and 40.7% respectively. This was primarily due to an increase in orders from the CIS countries for long and railway products, as well as the continued implementation of a number of long-term pipeline projects such as the Beyneu-Shymkent project (Kazakhstan) and the East-West project (Turkmenistan).

MINING

In Q1 2012, sales volumes of iron ore products increased by 514 thousand tonnes (10.8%) year-on-year to 5,254 thousand tonnes due to an increase in salable pellets by 530 thousand tonnes, resulting primarily from the redistribution of sales volumes of pellets to third parties (338 thousand tonnes), as well as the overall redistribution of production volumes from iron ore concentrate to pellets (84 thousand tonnes).

Sales of coking coal concentrate totalled USD 138 million in Q1 2012, an increase of 50.0% year-on-year, driven by an equal increase in coal price and sales volumes.

In Q1 2012, sales volumes of steam coal concentrate saw a decrease of 163 thousand tonnes year-on-year as a result of low demand for steam coal in the US, due to which the mining of steam coal was reduced by 266 thousand tonnes at the US operations.