Mytilineos - Resilient margins protect profitability

Mytilineos’s H120 results proved that despite the challenging environment the metallurgy, power and gas industries are facing, the company’s strategy is resilient and capable of withstanding current headwinds. While H120 EBITDA fell by 17% versus H119 to €145m, the power and gas business EBITDA increased by 41% to €71m. This business segment was a key driver in offsetting the impacts of COVID-19 on results. Net debt was also reduced to €477m, despite Mytilineos's ongoing investment programme, which is in full deployment, and the company keeping its dividend distribution. Beyond 2020, growth of the renewable and supply businesses as well as the commissioning of a new CCGT plant should provide a boost to profits. Our updated blended valuation is €13.0/share.