The SIJ Group successfully issues bonds

The SIJ Group successfully issues bonds With the payments made today, SIJ – Slovenska industrija jekla, d. d., has successfully completed the process of issuing five-year bonds valued at EUR 43 million with the annual yield of 4.50 %.

Achieving a significant increase of operational earnings in the current year, the SIJ Group will use the financial assets to diversify the long-term financing sources and ensure the optimum liquidity to implement the strategy of development until 2020. The strategy includes further optimisation of the production mix, an increase in the production of products with higher added value and continued focus on specialist market niches.

Said Anton Chernykh, President of the Board of Director of SIJ, d. d., after the bond issue: “If we consider the bond issue to be merely the first step in the further development of SIJ, d. d., as a public limited company, the result is highly satisfying. Well-informed investors have positively assessed the business condition of the SIJ Group and shown trust in our long-term strategy of sustainable development. In the mean time, we are going to continue implementing the many measures for Group consolidation and the increase of operational earnings, the results of which we are seeing even in the current business year.”

Predictions made before the bond issue anticipated the potential assets accumulated to range between EUR 30 and 50 million, although it should be taken into consideration that the issuer’s activities on the foreign markets before the sale were intentionally conservative. Igor Malevanov, Member of the Board of Directors for Economics and Finance, explains that this was part of the Group’s strategy for gradual entry to international financial markets: “We are in an intense stage of consolidating the SIJ Group; the capital markets are just starting to discover us, which is entirely expected and understandable. We are going to continue our activities on international capital markets – we expect this to be much easier now that our first bonds have been issued on the Slovenian market. Along with the growth of income and stable earnings, in the long-term we are going to continue reducing the net financial debt (NFD) and maintain the NFD/EBITDA ratio below 3.0.”

All activities related to organising the sale and issue of bonds were performed by NLB, d. d. The bonds were offered mainly to qualified investors, of whom 65 made the decision to invest in the bonds. After the bond issue, the issuer will prepare a bond issue prospectus at the Central Securities Clearing Corporation; once the prospectus has been approved by the Securities Market Agency, the bonds will be listed on the regulated market of the Ljubljana Stock Exchange.

In the first nine months of this year (January–September 2014), the SIJ Group has generated an income of EUR 561.2 million (an increase of 9 % compared to the same period last year), EBITDA in the amount of EUR 66 million (an increase of 86 % compared to the same period last year) and a net profit of EUR 25.5 million. While the global steel market growth was slightly over 2.1 % (in the same period), the growth of the SIJ Group was more rapid and a high level of operational earnings was maintained, as the EBITDA margin in the period in question was 11.8 %. The results for the period of nine months show that the SIJ Group is successful in pursuing its annual (2014) plans to increase the level of income to EUR 742 million, generate an EBITDA of over EUR 80 million and a net profit of over EUR 30 million.

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Dr. Denis Mancevič, Executive Director for Corporate Communications