3Q17 financial results – FCF up 33% qoq, EBITDA in line with our forecast
Severstal has reported its 3Q17 financial results. EBITDA of USD 616m was down 2% qoq, but in line with our forecast and 2% behind the consensus. FCF was very strong, however, up 33% qoq at USD 488m (3% above our forecast), despite the marginally lower EBITDA, due to a USD 83m release in working capital, partially reversing the USD 315m working capital build-up we saw in 1H17 and the lower-than-expected tax payments. Net income was 26% below our forecast and the consensus due to a one-off FX loss, higher finance costs and tax, but we believe that investors should focus on the solid EBITDA and FCF generation, which is supportive of the high c.USD 500m 3Q17 dividend payment, which was announced after the market closed yesterday. We expect a positive share price reaction to both these results and last night’s dividend news.
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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