2H16 financial results – consensus-beating EBITDA and FCF, despite net loss on impairments
EVRAZ has reported its 2H16 financial results. EBITDA was USD 965m, 6% ahead of the consensus, driven by lower costs, as revenues of USD 4.17bn were in line. The North American business was the main source of deviation as it generated USD 1m of EBITDA vs. our expectation of a large loss. FCF was up 2.8x hoh to USD 560m (68% above our forecast), helped by a USD 133m release of working capital; as a result, net debt fell 9% hoh to USD4.74bn (our definition), implying 3.1x LTM EBITDA from 4.8x at the end of 1H16, so EVRAZ’s financial position has improved materially. On the negative side, net income was a USD 211m net loss vs. the consensus of USD 267m of profit, due to non-cash write-downs, but we expect the market to overlook these. We believe the stock should react positively to these results due to the stronger operating performance and evidence of balance sheet improvement.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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