— Over the first nine months of 2025, tax revenues in Ukraine increased by almost a quarter. How does the current trend in budget revenues correlate with the financial performance dynamics of large businesses? Has the tax burden on Metinvest increased this year?
— The dynamics of the Group’s financial indicators are certainly not positive. This is primarily due to the shutdown of production facilities in Pokrovsk, which took place at the beginning of this year. The increase in tax revenues is not related to large businesses finding it easier to operate, nor is it driven by economic growth.
While I cannot speak for everyone, in our case, tax revenues are increasing due to legislative changes adopted at the end of last year. These are the rise in the military levy from 1.5% to 5%, as well as the annual indexation of resource taxes, land charges and other similar payments.
— In your view, what steps should the state take to improve conditions for large businesses so that, even in wartime, it can halt the decline and ensure growth?
— The main priorities are survival and security. Strategic decisions are important here, ones that will enable production to be resumed or business processes to continue without disruption: preserving jobs and retaining staff.
As such, most important is security. Not only physical security, but also investment security. We see some concern among investors and reluctance to invest in Ukrainian projects due to the war. Given this, Ukraine needs investment security guarantees to restore investor confidence and attract capital. For the state, big business should be a priority area of security policy, as it is big business that builds the foundation for the development of small and medium-sized enterprises and a strong economy.
We need a holistic ecosystem that will perceive the mining and metals industry not only as a source of raw materials, but also as a basis for production and further investment, further processing and the creation of competitive products.
There should be a predictable tariff policy for state monopolies, as well as a predictable and investment-friendly tax policy. Businesses also expect the state to defend their interests in foreign markets and protect domestic producers. This protection should not be seen as a policy of privileges, but rather as the proper use of the opportunities offered by international law amid the war.
In addition, businesses need resources within the country. A particularly significant problem for us is the shortage of personnel. This applies not only to qualified personnel, but also to ordinary workers: the shortage in enterprises is currently 20%. This is objectively understandable given mobilisation, population migration and the deterioration of the situation with qualified personnel. But here, the state's assistance is definitely needed. For our part, we are doing our utmost to facilitate the integration of mobilised workers and believe that we should also count on support.
— In 2024, Metinvest paid UAH19.8 billion in taxes and fees to budgets of all levels in Ukraine, up 36% compared with 2023. What are your forecasts for 2025?
— At the beginning of this year, we were forced to suspend operations in a business that is important to the Group. As such, we do not expect growth, but we have already paid more than UAH12 billion in the first eight months of this year, despite the suspension of operations at the Pokrovsk site. Our current forecast is that we will remain at the 2024 level. However, there is still a whole quarter ahead of us, and the situation has not been very favourable recently.
— Currently, exports are a key source of revenue for large businesses. As a metals company, you are the largest exporter based on the 2024 results. According to the latest data from the industry association Ukrmetallurgprom, the sector is seeing a decline in exports of rolled metal, semi-finished products and iron ore. Does the government currently have the financial instruments to stop the decline in exports or even stimulate growth?
— Access to markets, especially the EU, which is closest to us, is of the utmost importance to us. It is a matter of survival for industry. Despite the many sanctions packages, we are still competing with Russian producers in the EU market. There are certain exceptions to the sanctions that allow them to continue supplying steel to Europe. And the income they receive finances the war in Ukraine. This means that for its own security, Ukraine must encourage its partners to strengthen the sanctions regime.
— What about financial instruments?
— Metinvest has access to international financing. However, domestic buyers of our steel — the medium-sized business segment — need support and financing. Without this, it will be difficult for them to sell their products.
— How do state monopoly tariffs affect the Group’s activities? What would be a reasonable compromise between natural monopolies and their customers in the business segment?
— High tariffs are a systemic problem. Private companies should not have to compensate for the inefficiency of state-owned enterprises; this is wrong. Ukrzaliznytsia suffers losses from passenger transport. But passenger transport is a social function, and these losses should not be passed on to freight transport.
In developed countries, such services are financed through public service obligations: if the state orders, it pays. State monopolies should also prioritise process and cost efficiency. When private businesses incur losses, they analyse their costs, optimise their staffing or improve business process efficiency. State-owned companies are quite inert in this regard and do not engage in such activities.
For us, tariff increases have very negative consequences. For example, Inhulets Iron Ore is not operating due to high electricity tariffs. Each subsequent increase in prices and tariffs creates a risk of other iron ore enterprises shutting down or losing their market share. The result is a reduction in production and a decrease in tax revenues. This is very negative for the economy as a whole.
— There are numerous objective circumstances in the energy sector that make it difficult for them and require them to raise tariffs...
— I understand why it is difficult for them because they are under fire every day. In any case, this needs to be approached in a fairly balanced way. If the tariffs are market-based, then they are market-based. If assets need to be rebuilt after shelling or damage to social functions needs to be compensated, private business should not be responsible for this. This should be financed through budget redistribution.
— In December 2023, the government approved Ukraine's National Revenue Strategy for 2024-30. Industry colleagues say that as part of this strategy, Ukraine’s tax authorities have effectively suspended VAT refunds, which has led to a decline in business and a reduction in budget revenues. How do you feel about this? Do you see any mechanisms that could balance the interests of the state and business in this area?
— In my view, these problems with VAT refunds are not really related to the adoption of the National Revenue Strategy. Automated VAT refund mechanisms have been in place for quite some time and are well established. This is also well defined at the state level. However, VAT is the subject of increased attention and, in our opinion, sometimes subject to unclear manual control. We believe that the state should pay attention to this and comply with the relevant legislative norms.
— What exactly are the problems there?
— When a large exporter is the final recipient of VAT refunds, the state may not pay out a certain amount in order to balance the books. While the state has powerful tools that show which companies are at risk and which may be evading taxes through ‘grey schemes’, there are many small companies. And the state probably does not have the resources to deal with this and finds it easier to balance the books with 10 large exporters.
— Metinvest recently announced the resumption of large-scale investments in Ukraine, with plans to invest around US$300 million in its 25th year. What financial instruments are you using for this? Are there any plans regarding investment volumes for the 26th year?
— Already in the first six months of 2025, we invested around US$90 million in the Group's enterprises, both in Ukraine and abroad.
This year, an important project for us was the construction of a facility for thickening enrichment waste. At Northern Iron Ore, we secured a credit line of around EUR23.6 million from Deutsche Bank, with support from the Finnish export credit agency Finnvera, to purchase equipment from Metso Finland.
We are not only investing in the Ukrainian part of the business. Our priority project, which has already started, is the construction of a ‘green’ steel plant in Italy with an expected capacity of 2.7 million tonnes of metal products a year. In the future, the plan is that it will process Ukrainian raw materials, particularly iron ore, and become a steel bridge between Ukraine and the EU. The initiative will be funded through project financing, Italian state financial institutions, and international financial and credit institutions.
— How difficult is it to communicate with foreign financial institutions when funding projects in Ukraine? Alongside their fairly strict verification procedures, we are at war, which is an additional risk for creditors. How do you communicate with them?
— Export credit agencies are state institutions of countries that guarantee risk coverage for financial institutions. In general, many export credit agencies in European countries guarantee protection against risks in Ukraine. I already mentioned Finland’s Finnvera. I also know that some projects launched this year involved Ukrainian businesses and the Danish export agency.
— You mentioned National Bank of Ukraine [NBU] regulations, so I have to ask. You have Eurobonds maturing next year. Given these regulations, are you expecting any problems then?
— We are hoping for further liberalisation of currency restrictions. Yes, indeed, the NBU is doing this, but very cautiously. We would like them to do it faster because of the payments mentioned. Previously, for example, our parent company in the Netherlands provided loans to our enterprises in Ukraine for investments. Currently, there is still no permission to repay such loans, although this is quite transparent.
— From 1 January 2026, one key challenge for the industry will be the introduction of the Carbon Border Adjustment Mechanism [CBAM] in the EU market, which is important for Ukraine’s metals sector. How will the financial burden on exports of your products change? Are there financial opportunities to reduce the risk of your products’ competitiveness declining because of this mechanism?
— This mechanism will definitely lead to the introduction of additional duties on Ukrainian steel, because Ukraine is not a member of the EU. We do not know the figures yet, but this will mean additional costs because EU buyers of our steel are unlikely to want to bear this price increase themselves.
Ukraine’s government is working with the business community to delay the CBAM for the country. There are objective legislative articles that could grant Ukraine a delay due to the war. We need time to recover from the war and modernise production.
The EU has been moving towards its current position for quite some time, and all European companies have received grants and financial support for modernising the industry to meet the requirements. This issue is critically important for the metals industry, and we are hoping for a positive decision.
At the same time, after the introduction of the CBAM in Europe, the cost of production for the EU market will increase for many manufacturers from other countries. They may reorient their production towards the Ukrainian market. As such, it is necessary to prepare for this now, protect the domestic market and support national producers.
— Will we be able to do this quickly without violating WTO rules?
— The state can make certain decisions that will prevent mass imports. In my view, the relevant ministries should already be considering this possibility.
— Last question. The White Business Club initiative has been operating in Ukraine for almost a year now, and attitudes towards it are rather mixed. How do you assess it?
— Several of our companies are members of this club. Both we and the business community believe that there is currently no fundamental difference between joining or not joining it. Or at least we don't see any.