highlights of 2019
Steeling our businessFor a market downturn
Understanding the cyclical nature of the business, Metinvest was well prepared for the adverse steel market developments in the second half of 2019. Amid considerable challenges, the Group further reduced operating costs, completed crucial maintenance work and implemented the investments planned under the Technological Strategy 2030. It also extended the maturity of its debt portfolio and increased environmental investment significantly. Last, but not least, Metinvest strengthened its health and safety system to achieve its uncompromising goals in this area.
OLEG POPOV CHAIRMAN OF THE SUPERVISORY BOARD download pdf 547kbvertically integrated for success
download pdf 108KB- Sales offices
- Operations
- Metallurgical
- Mining
- Associate or JV
- Coking coal
- Coke
- Iron ore
- Integrated steel
- Re-roller
- Refractories
chairman's statement
ENGAGING STAKEHOLDERSTO ACHIEVE STRATEGIC GOALS
While 2019 was challenging for the global steel industry, Metinvest retained a clear focus on ensuring its long-term competitiveness, investing in technology and pursuing its sustainability agenda. Our goal is to balance the diverse needs of all stakeholders.
OLEG POPOV CHAIRMAN OF THE SUPERVISORY BOARD download pdf 108kbceo’s statement
ALL HANDS ON DECK
In 2019, faced with numerous global events, Metinvest mustered every available resource, including the skills and experience of its team, the dedication of its partners, as well as the continued backing of international creditors and the broader stakeholder community. With their support, the Group was able to continue investing and managing its debt while also achieving steep reductions in the number of safety incidents and remaining on-track in terms of its environmental and other sustainability commitments.
yuriy ryzhenkov chief executive officer download pdf 102kbstakeholder engagement
BUILDING OUR FUTURETOGETHER
Metinvest works closely with each of its key stakeholder groups to carefully balance their diverse interests. Together with its employees, customers, suppliers and contractors, equity and debt providers, local communities, and government authorities, the Group strives to follow sustainable business practices that will meet the needs of future generations.
Importance for Metinvest
Metinvest’s most valuable assets are its people, without whom none of its achievements would be possible. Around the world, the Group’s almost 67,000 employees mine and process raw materials to make steel, which they then cast and roll into finished products, while office workers and managers support the smooth functioning of the vertically integrated structure and the supply chain that brings the final product to customers.
Engagement
The Group carries out regular employee engagement surveys in order to improve the effectiveness of measures taken to increase employee satisfaction. Staff meetings are conducted with the presence of senior managers who can act on the ideas and concerns raised. Metinvest also provides internal training opportunities. These are used to deliver comprehensive health and safety instruction. In addition, the Group provides internal courses to develop work skills and partners with universities to provide managers the opportunity to increase their qualifications. The Group also maintains a confidential Trust Line, providing staff with a safe means to communicate concerns and complaints.
Results for 2019
During 2019, the average salary in the Group rose by 37% year-on-year in US dollar terms, driven in part by Metinvest’s efforts to expand financial benefits for employees. In addition, the Group is also focused on augmenting non-financial benefits. For instance, a major project is under way to improve employee amenities to raise the quality of overall working conditions. More than 108,000 training sessions were held in 2019 as Metinvest deployed new e-learning tools to facilitate remote learning opportunities. Consequently, Metinvest’s turnover rate decreased year-on-year to 11%. Importantly, the Group hired around 1,500 new graduates as part of its drive to recruit the brightest young minds.
in focus
MODERNISING FACILITIESAND PROTECTING THE ENVIRONMENT
Guided by the Technological Strategy 2030, Metinvest fulfilled its capital expenditure plans in 2019. Among other achievements, the Group expanded production capacity, increased the range of value-added products, reduced costs and improved its environmental footprint.
download pdf 377kbDELIVERING ON STRATEGY
The Group’s capital investments have grown steadily since 2017. In 2019, Metinvest fulfilled its investment plan for the year with CAPEX of US$1,055 million, up 17% year-on-year. Total investment was the highest since 2011.
Importantly, US$717 million was spent on maintenance work at steelmakers, re-rollers, iron ore producers, coke plants and coal mines. This represented a 17% year-on-year increase. Strategic projects accounted for US$338 million, up 18% year-on-year. Last year saw important progress on several projects.
KEY PROJECT DETAILS
In the Metallurgical segment, the overhaul of blast furnace no. 3 at Azovstal, at a cost of around US$150 million, was completed simultaneously with the installation of the pulverised coal injection (PCI) unit in June. Now all of the Group’s operating blast furnaces are equipped with PCI technology.
Ilyich Steel completed the revamp of its hot strip mill (HSM) 1700 at a cost of around US$110 million. The first coils were produced in November 2019. The reconstruction of the HSM 1700 is expected to increase its capacity to 2.5 million tonnes of hot-rolled coils per year and enhanced the Group’s sales portfolio of higher value-added products thanks to improved coil quality.
In the Mining segment, CAPEX has focused on improving pellet quality, including the reconstruction of beneficiation and pelletising facilities. At Central GOK, the upgrade of the beneficiation plant at a cost of around US$20 million is designed to enable the production of premium concentrate with 70.5% Fe content, which will permit making pellets used in DRI technology. At Northern GOK, the first phase of the revamp of Lurgi 278-A roasting machine, at a cost of US$6 million, was completed. Other continuing projects at iron ore assets include the construction of crusher and conveyor systems.
In addition, environmental investments were among the key priorities in 2019, with total spending amounting to US$155 million, up 68% year-on-year.
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annual report 2019
STRATEGIC REPORT
Sustainability report
Governance report
Financial statements
- Independent Auditor’s Report
- Summary Consolidated Balance Sheet
- Summary Consolidated Income Statement
- Summary Consolidated Statement of Comprehensive Income
- Summary Consolidated Statement of Cash Flows
- Summary Consolidated Statement of Changes in Equity
- Notes to the Summary IFRS Consolidated Financial Statements