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Ukraine's improving economy propels Metinvest to profit in FY'16

Ukraine-based steel giant Metinvest B.V. returned to profit in 2016 from a loss of more than US$1.00 billion a year earlier on early signs of economic improvement and rising domestic steel demand.

The company booked a net profit of US$118 million after adjusted EBITDA surged 119.6% year over year to US$1.15 billion and the adjusted EBITDA margin improved to 19% from 8% in 2015.

However, full-year revenues slipped 9% to US$6.22 billion with global steel, iron ore and coal prices remaining volatile, according to the May 30 results.

Crude steel production in 2016 climbed 9% year over year to 8.4 million tonnes, but iron ore concentrate and coking coal concentrate declined 8% to 29.6 million tonnes and 7% to 3.1 million tonnes, respectively.

While disruptions to Metinvest's operations continued due to the ongoing conflict in eastern Ukraine, there were the first signs of economic improvement since 2012.

Metinvest said real GDP growth was 2.3% in 2016 and the recovery accelerated by the end of the year, which led to a 25% increase in domestic steel demand.