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Metinvest absorbs 20% loss in H1'17 after losing Ukraine assets to separatists

Metinvest BV's net profit for the first half of the year dropped 20% to US$72 million, from US$90 million the year before, after losing control over several facilities in eastern Ukraine due to takeovers by separatist groups.

Operating profit doubled year over year to US$466 million, due primarily to revenues spiking by 36% to US$3.91 billion. Adjusted EBITDA rose 45% to US$839 million, despite a US$92 million impairment related to inventories at the Yenakiieve Steel, Krasnodon Coal and Khartsyzk Pipe assets, which were shut down in February.

Metinvest's metallurgical division recorded a 38% year-over-year increase in revenue to US$3.17 billion, due in part to higher sales of pig iron, slabs, flat products and coke. Net cash from operations rose 87% to US$305 million.

The company's net debt remained steady at US$2.95 billion, while CapEx in the half increased 66% year over year to US$193 million. Metinvest noted that maintenance comprised 89% of the CapEx figure, while expansion projects comprised 11%.

The group's mining division saw revenues jump 27% to US$748 million as a result of a 53% increase in total sales to US$748 million, which, in turn, was due to increased iron ore and coal sale prices, which were partially offset by reduced sales and production of iron ore products and coking coal concentrate.

In the first half of 2017, Metinvest produced 3.9 million tonnes of crude steel, 13.6 million tonnes of iron ore concentrate and 1.4 million tonnes of coking coal concentrate. Crude steel production decreased by 6%, iron ore concentrate production was down 14% and coking coal concentrate output decreased by 8% year over year.