4Q16 results - higher-than-expected FCF, lower-than-expected net profit offset by non-cash impairments
Severstal released its 4Q16 financial results this morning. Overall, EBITDA beat consensus by 10%, off revenues which were broadly in line (+2%). Net income was -23% vs. our estimates, largely due to a non-cash impairment of USDÂ 115m on non-current assets. FCF was stronger than we had expected, due to the release of working capital, partially offset by a capex increase and weaker operating performance. Net debt was down 9% qoq to USDÂ 859m, 0.4x net debt/EBITDA, so leverage remains low, allowing Severstal to continue to pay out most of its FCF in dividends going forward. The stock should react positively to this news, in our view.Â
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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