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Improved pricing, demand boost Metalloinvest's FY'17 profit to US$1.41B

Russian steel and iron producer OAO Metalloinvest benefited from Chinese production cuts in 2017, posting a 22% rise in net profit to US$1.41 billion.

EBITDA soared to US$2.12 billion, from US$1.26 billion in 2016.

In a March 15 earnings release, company CEO Andrey Varichev said China's strict environmental pollution controls had driven a rise in prices for Metalloinvest's products while steel demand also recovered in Russia, Europe and the U.S.

Global iron ore prices increased 23.6% in 2017, directly affecting Metalloinvest's revenue, which grew to US$6.23 billion, from US$4.26 billion in 2016. The 13% appreciation of the Russian ruble against the U.S. dollar also contributed to a growth in revenue in U.S. dollar equivalent.

On a yearly basis, revenue from Metalloinvest's iron ore products increased 51.5% to US$2.82 billion, and revenues from pig iron and steel products rose 43.7% to US$3.25 billion.

The company reported a slight year-on-year dip in iron ore and pellet output for 2017.

Total debt at the end of 2017 amounted to US$4.45 billion, up from US$4.18 billion at 2016-end, while cash and equivalents totaled US$390 million, tumbling from US$989 million at the end of 2016.

The launch of a number of development projects pushed by CapEx for the year by 67% to US$489 million. The company launched its HBI-3 Plant at Lebedinsky in June 2017, which took up approximately 24% of its capital expenditure for the year.

"In 2017, we successfully launched HBI-3 Plant at Lebedinsky GOK with a capacity of 1.8 million tonnes, a landmark event for the company," Varichev said.