Metinvest, Ukraine’s biggest steelmaker, expects earnings before interest, taxes, depreciation, and amortization to fall this year on declining steel sales, Chief Financial Officer Sergiy Novikov said.
This year’s Ebitda will drop to $1.7 billion or $1.8 billion from $3.56 billion last year, Novikov said in a phone interview today. The Donetsk, Ukraine-based steelmaker, controlled by billionaire Rinat Akhmetov, envisages capital expenditures of as much as $800 million next year and doesn’t plan any big borrowing, Novikov said.
“The first half of the year was challenging, and the second one will be even more,” Novikov said. “The third quarter was very difficult as iron ore prices slumped. We see the results of the second half of the year to be worse than the first one.”
Metinvest’s six-month net income plummeted 71 percent from a year earlier to $334 million as consolidated revenue fell 4 percent to $6.74 billion, the company said today. Crude steel production declined 8 percent to 6.75 million tons in the first half from the same period a year ago.
Metinvest aims to reduce steel costs by starting pulverized coal injection technologies at its steel plants to reduce consumption of expensive imported natural gas and help save at least $30 for each ton of steel, he said.
The steelmaker plans to invest around $400 million for maintenance works next year, according to Novikov. This year’s dividends will be on par with 2011, while at the same time the company has not decided when they are to be paid, he said.