International credit rating agency S&P Global Ratings (Standard & Poor's Ratings Services) has announced that it has revised its outlook on Russia-based metallurgical coke and pig iron producer Industrial Metallurgical Holding (IMH) (KOKS Group) to stable from positive, while it has affirmed its 'B' long-term issuer credit rating on the company.
S&P stated that the outlook revision reflects its expectation that IMH will achieve weaker improvements in credit metrics over the 2018-19 period than it had previously expected. According to S&P, despite an almost 30 percent increase in IMH’s annual coal production in 2017, the output was lower than expected initially: 2.8 million mt compared to roughly four million mt, which was mainly due to the delayed start of the second stage of the Butovskaya and Tikhova mines, followed by operational issues at the former mine affecting the speed of the ramp-up. S&P now forecasts a more gradual increase in IMH’s coal production to more than four million mt in 2019, which will continue to improve the company's cost position, albeit at a slower pace than S&P previously expected.