METALLOINVEST ANNOUNCES 2016 IFRS FINANCIAL RESULTS

METALLOINVEST ANNOUNCES 2016 IFRS FINANCIAL RESULTS

Moscow, Russia - 16 March 2017 - Metalloinvest ('the Company'), a leading global iron ore and HBI producer, and one of the regional producers of high-quality steel, today publishes its audited IFRS financial results for the full year ended 31 December 2016.

FINANCIAL HIGHLIGHTS

- Revenue USD 4,261 mn (-3.0% y-o-y)

- EBITDA USD 1,258 mn (-12.2%)

- EBITDA Margin 29.5% vs. 32.6% in 2015

- Net Income USD 1,153 mn vs. USD 218 mn in 2015

- Net Debt USD 3,161 mn (-11.3% compared to 31 December 2015)

- Net Debt / EBITDA 2.5x, flat vs. 31 December 2015

- Capital Expenditure USD 290 mn (-30.5%)

- Total Assets USD 6,201 mn (-6.3% compared to 31 December 2015)

PRODUCTION HIGHLIGHTS

- Iron ore 40.7 mn tonnes (+3.1%)

- Pellets 25.2 mn tonnes (+5.9%)

- HBI/DRI 5.7 mn tonnes (+4.8%)

- Hot metal 3.0 mn tonnes (+20.2%)

- Crude steel 4.7 mn tonnes (+3.6%)

KEY CORPORATE HIGHLIGHTS

Operational developments and capital expenditure

- Achievement of design capacity at Pellet Plant #3 at Mikhailovsky GOK

- Launch of Blast Furnace #4 at Ural Steel after completion of major maintenance and modernisation works

- Commissioning of second gas purification unit at OEMK's electric arc furnace shop

- Completion of cold tests at HBI-3 Plant at Lebedinsky GOK

Key contracts

- Signing of a contract for the supply of iron ore concentrate with Industrial Metallurgical Holding (IMH)

- Signing of HBI supply contracts with MMK, TMK and ChelPipe

- Signing of new long-term contracts with Aktobe Rail and Section Works for the supply of rail and shaped billets

Financing

- Issue of BO-02, BO-07 and BO-08 series bonds for a total amount of RUB 20 bn

- Raising of a USD 450 mn pre-export finance facility (PXF) with a club of banks

- Partial repayment of USD 600 mn of PXF facilities ahead of schedule

- Redemption of debut Eurobond issue for a nominal amount of USD 750 mn

- Confirmation of the Company's long-term credit ratings at BB/Ba2 levels by Standard & Poor's, Fitch and Moody's, and at BBB+ by Dagong

Corporate governance

- Election of the Board of Directors and appointment of new committee members

- Consolidation of 100% of the shares of JSC Holding Company Metalloinvest into USM Metalloinvest LLC, registered in the Russian Federation  

Andrey Varichev, CEO of Management Company Metalloinvest, commented:

'In 2016, Metalloinvest achieved record production volumes of iron ore products at Lebedinsky GOK and Mikhailovsky GOK, as well as crude steel at OEMK and hot metal at Ural Steel, reaching the highest levels in the Company's history. The increase in output was achieved as a result of the timely implementation of development projects, such as Pellet Plant #3 at Mikhailovsky GOK, and the modernisation of existing facilities, including Blast Furnace #4 at Ural Steel and the gas purification system at OEMK. We have ambitious plans for 2017, notably the launch of HBI-3 Plant, one of the largest such facilities in the world, at Lebedinsky GOK.

Metalloinvest's strong competitive position combined with a recovery in the market in the second half of 2016 enabled the Company to demonstrate the stability of its financial profile. We expect an increase in the share of high value-added products, as well as continued stability in global iron ore prices will have a positive effect on the Company's results.'

Alexey Voronov, Finance Director of Management Company Metalloinvest, added:

'During the reporting period, we undertook substantial measures to improve our debt maturity schedule. The issue of rouble-denominated bonds, refinancing and partial early repayment of pre-export facilities and the redemption of the Company's debut Eurobonds allowed us to reduce our scheduled maturities in 2017 to almost zero. The Company attentively monitors the capital markets and bank lending opportunities on an ongoing basis. In the upcoming year, we will continue to work on maintaining the high quality of our debt portfolio and optimising our repayment schedule.'

Full press release and financial statements are available at http://www.metalloinvest.com/en/investors/financial-results/  

_{Metalloinvest is a leading global iron ore and merchant HBI producer and supplier, and one of the regional producers of high-quality steel. The Company has the world's second-largest measured iron ore reserve base and is one of the lowest-cost iron ore producers.}

_{Metalloinvest is wholly owned by USM Holdings. Alisher Usmanov is the major beneficiary of USM Holdings (49%), with other major beneficiaries being the companies of Vladimir Skoch (30%) and Farhad Moshiri (10%).}