Metalloinvest sees 2008 revenue at $11 bln -source

August 4, 2008

August 4th (Reuters) – Metalloinvest, the Russian miner founded by billionaire Alisher Usmanov, forecasts core earnings will double this year to $5.2 billion and revenues will rise 80 percent to over $11 billion, a company source said on Monday.

Metalloinvest, which is planning an initial public offering of its shares this year, plans to invest 266.8 billion roubles ($11.4 billion) between 2009 and 2012, in addition to investment of at least 28 billion roubles ($1.2 billion) planned for 2008.

 

“The market dynamics will allow us to reach these numbers this year,” the source, who declined to be identified, told reporters, referring to the forecast revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA).

 

Metalloinvest, co-owned by Usmanov and billionaires Vasily Anisimov and Andrei Skoch, produces 40 percent of Russia’s iron ore. It operates the country’s two largest iron mines and holds the world’s largest reserves of the steelmaking raw material.

 

Global iron ore prices have quadrupled in the past five years as China, producer of a third of the world’s steel, devours more of the raw material. Benchmark prices set by leading miners and Chinese buyers rose as much as 96.5 percent this year, the highest jump in a decade.

 

Metalloinvest posted 2007 revenues of $6.1 billion and EBITDA of $2.5 billion, the source said, confirming figures issued by the company earlier this year.

 

Metalloinvest plans to float up to 25 percent of its shares in an autumn IPO, sources close to the deal have said previously. The company has also been linked with London-listed Kazakh copper miner Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz).

Usmanov also agreed in May with Vladimir Potanin, the largest shareholder in Norilsk Nickel (GMKN.MM: Quote, Profile, Research, Stock Buzz), to swap assets in a deal that could create a large, diversified Russian mining house.

 

The terms of that deal envisage Usmanov buying up to 10 percent in Norilsk and Potanin purchasing 25 percent plus one share in Metalloinvest. [ID:nL28692466]

 

 

 

HIGHER OUTPUT

 

Metalloinvest plans to increase iron ore concentrate output by 50 percent to 60 million tonnes by 2013.

 

This year, the company plans to increase production of iron ore to 102 million tonnes from 100.16 million tonnes in 2007. Iron ore concentrate output is forecast to rise to 42.8 million tonnes from 41.3 million tonnes, the source said.

 

Output of hot-briquetted iron is forecast to double to 2.46 million tonnes from 1.21 million tonnes after the launch of a second plant at the company’s biggest iron mine, Lebedinsky.

 

Production at Metalloinvest’s two steel mills ranks it Russia’s fifth-largest steel producer.

 

Crude steel output is forecast to rise to 6.91 million tonnes in 2008 from 6.44 million tonnes last year and rolled product output to 5.18 million tonnes from 4.85 million tonnes.

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