Industrial Metallurgical Holding ramped up the pig iron production by 4%

Industrial Metallurgical Holdings (therefore - IMH) announced its operating results for the full year 2014. According to its press release, IMH ramped up the output of nearly all types of its products.

Growing efficiency of the Butovskaya mine and the Uchastok Koksoviy open-pit mine operations made it possible to further increase coal production. Total volume of coal extraction in 2014 was 5% higher to compare with 2013. Production of coal concentrate also showed positive dynamic.

Production of coke grew steadily throughout the second half of 2014. This was due to the company’s return to the markets of Ukraine, who were less active in the early months of last year. In addition, in December 2014, the company announced its decision to resume its supplies of coke to Asia, which favors the rubble depreciation. The share of premium coke grades with CSR more than 60% was 16% of the total coke output.

Production volumes of iron ore and production of iron ore concentrate remained virtually unchanged as compared to the level of 2013.

The total volume of pig iron production by Tulachermet plant increased by 4%. This was a result of efficient performance of all plants of IMH production chain and stable operations of Tulachermet’s facilities. The share of premium grades of pig iron was 28% of total production which means nearly two times increase in volumes as compared to the level of 2013.

Greater consumer interest to premium pig iron grades of Tulachermet was associated with a reduced supply on the world market, as well as attractive delivery conditions and stability of our plant’s supplies.

Sergey Cherkaev, Vice President and Chief Financial Officer of IMH, commented on the full year 2014 results: «2014 was a very productive and successful year for us and we already can see that we have achieved our financial targets in terms of EBITDA growth and decrease of leverage ratio.

A long period of low commodity prices on the back of stable price level for our pig iron was the main positive factor for our financial stability. We also got considerable support from the return of our coke to the Ukrainian market. There were a number of internal factors, which helped us to strengthen our financial position. First, I mean implementation of programs to improve production efficiency and to reduce costs. All of our companies achieved excellent results in this area and continued to implement these programs. National currency depreciation and an increase in revenues from export operations also became a favourable factor for the growth of our EBITDA indicators.

We are quite optimistic about the prospects for the first quarter of 2015. I think that the situation in the export market will continue to support us. In addition, we already see the benefits of our investments into production modernisation. We have consolidated market position in the premium grades of pig iron and coke, reduced energy costs of the Tulachermet plant, entered the market with a unique low phosphorous pig iron. This not only provides us with the financial stability, but also allows us to build a solid base for further development.»