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Weaker sales, higher costs drive down Metinvest's H1'19 profit

Metinvest BV's net profit in the first half dropped 39% year over year to US$408 million mainly due to lower revenues, higher operating costs and lower finance income.

The company noted that it spent US$163 million directly on ecological efforts, rising 16% on a yearly basis, in line with climate change considerations.

Weaker results were partially cushioned by a reduction in finance costs and a lower income tax expense.

Revenue declined 6% year over year to US$5.82 billion because of a drop in realized steel prices in line with global benchmarks, as well as lower resale volumes. By market, revenue from North America and the Middle East and North Africa regions fell 38% and 22% on a yearly basis, respectively, to US$240 million and US$983 million.

Operating profit fell 49% year over year to US$431 million as operating costs for the half rose 1% to US$5.39 billion.

EBITDA for the company declined 33% year over year to US$890 million, mainly due to a US$623 million slump in EBITDA from the metallurgical segment.

Capital expenditure in the first half climbed 15% year over year to US$482 million.

Metinvest's first-half production climbed 3% year over year to 3.9 million tonnes of crude steel, on increased production from the Ilyich Steel unit. Iron ore concentrate output rose 3% to 14.45 Mt, while coking coal concentrate rose 5% to 1.40 Mt.