Metinvest prepares for significant losses as a result of the conflict in the East of Ukraine

The largest private mining and metallurgical group of Ukraine Metinvest in the second half of 2014 will lose several hundred million dollars in income due to the military conflict in the industrial center of the country.

After months of fighting between government forces and separatists in eastern Ukraine, some of Metinvest's facilities have been closed or significantly reduced their production capacity since August this year due to blocked railway lines and damage from artillery fire.

Alexey Kutepov, CFO of Metinvest, said that “in the first half of the year, assets such as the Yenakiyevo Metallurgical Plant and the Khartsyzsky Pipe Plant contributed a total of $ 200 million to total revenue. We won't have that in the second half, of course. "
Kutepov said that Metinvest's two main metallurgical plants in Ukraine's southern region, the least affected by the fighting, are operating at almost half their capacity due to railway disruptions, and will take over the bulk of their earnings in the second half, contributing $ 400 million in the first half of 2014.

The conflict led to the closure of steel mills and coal mines, as well as the destruction of infrastructure in Luhansk and Donetsk, regions that made up a sixth of Ukraine's economy and produced a quarter of industrial output in a country that was once the second largest economy in the former Soviet Union.