MECHEL REPORTS 9M2015 OPERATIONAL RESULTS
Moscow, Russia December 16, 2015 Mechel OAO (MICEX: MTLR, NYSE: MTL), one of the
leading Russian mining and metals companies, announces 9M2015 operational results.
Production and sales for 9M2015
Production:
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9M2015, thousand |
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9M2014, thousand |
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3Q2015, thousand |
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2Q2015, thousand |
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Product Name |
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tonnes |
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tonnes |
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% |
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tonnes |
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tonnes |
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% |
Run-of-Mine Coal |
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17,404 |
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17,008 |
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2 |
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5,957 |
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5,941 |
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0 |
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Pig Iron |
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3,059 |
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2,91 |
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5 |
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1,014 |
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994 |
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2 |
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Steel |
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3,241 |
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3,182 |
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2 |
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1,094 |
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1,045 |
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5 |
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Sales:
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9M2015, thousand |
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9M2014, thousand |
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3Q2015, thousand |
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2Q2015, thousand |
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Product Name |
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tonnes |
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tonnes |
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% |
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tonnes |
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tonnes |
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% |
Coking coal |
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concentrate |
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6,201 |
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7,781 |
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-20 |
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2,133 |
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2,028 |
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5 |
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PCI |
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1,794 |
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2,443 |
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-27 |
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472 |
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669 |
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-29 |
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Anthracites |
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1,57 |
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1,526 |
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3 |
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462 |
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564 |
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-18 |
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Steam coal |
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4,906 |
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4,168 |
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18 |
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1,867 |
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1,563 |
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19 |
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Iron ore
concentrate |
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2,069 |
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2,505 |
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-17 |
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752 |
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609 |
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23 |
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Coke |
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2,241 |
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2,321 |
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-3 |
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757 |
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718 |
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5 |
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Ferrosilicon |
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61 |
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65 |
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-6 |
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22 |
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17 |
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29 |
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Flat products |
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358 |
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332 |
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8 |
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121 |
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120 |
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1 |
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Long products |
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2,101 |
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2,283 |
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-8 |
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734 |
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730 |
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1 |
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Billets |
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168 |
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80 |
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110 |
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56 |
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31 |
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81 |
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Hardware |
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530 |
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584 |
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-9 |
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189 |
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170 |
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12 |
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Forgings |
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43 |
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41 |
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4 |
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15 |
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14 |
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5 |
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Stampings |
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50 |
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63 |
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-21 |
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18 |
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20 |
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-10 |
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Electric power
generation
(thousand kWh) |
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3,103,609 |
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2,597,421 |
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19 |
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819,502 |
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1,115,317 |
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-27 |
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Heat power
generation (Gcal) |
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3,890,904 |
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4,165,232 |
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-7 |
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751,828 |
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1,035,991 |
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-27 |
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Key investment projects progress
Universal rolling mill:
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9M2015, thousand |
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9M2014, thousand |
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3Q2015, thousand |
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2Q2015, thousand |
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Product Name |
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tonnes |
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tonnes |
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% |
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tonnes |
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tonnes |
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% |
Rails, beams |
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120 |
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85 |
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40 |
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42 |
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34 |
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24 |
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and shapes |
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Elga Coal Complex:
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9M2015, thousand |
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9M2014, thousand |
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3Q2015, thousand |
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2Q2015, thousand |
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Product Name |
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tonnes |
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tonnes |
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% |
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tonnes |
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tonnes |
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% |
Run-of-mine coal |
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2,989 |
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744 |
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302 |
% |
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1,126 |
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1,022 |
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10 |
% |
Mechel OAOs Chief Executive Officer Oleg Korzhov commented on the 9M2015 operational results:
In the third quarter, prices on the global coal market did not stabilize. The unfavorable
situation persists, forcing companies all over the world to optimize production and cut costs.
Compared to that, Mechels mining assets have demonstrated good production results. We maintained
chief production and sales parameters at the previous quarters level, while mining at Elga Coal
Complex over this years nine months yielded nearly three million tonnes.
Coking coal concentrate sales in this accounting period went up by 5%. Sales chiefly increased on
the domestic market due to more attractive prices. Coking coal concentrate also increased sales to
Mechels own facilities due to the increase in both steel production and the amount of coal mined
at the Elga deposit, which we used as substitute for third party coal supplies.
The global slump in PCI sales in the third quarter was primarily due to the decreased demand from
Chinese consumers. Meanwhile, we have increased PCI exports to Japanese steelmakers by over 50%.
Japan is currently one of the most profitable markets for these coal grades.
The 18-percent decrease in anthracite sales quarter-on-quarter was due to the slump in supplies to
consumers in Western Europe and South Korea as prices were unfavorable.
The 19-percent increase in steam coal sales in the third quarter is due to the increase in
production and delivery of coal from the Elga deposit. Today half of Elgas coal is marketed
domestically and half internationally.
A major increase in iron ore concentrate sales (23%) was due to several factors, including
restoration of production volumes at Korshunov Mining Plant after planned summer repairs, as well
as increased demand on the domestic market.
The steel segment increased production of pig iron by 2% and steel by 5% quarter-on-quarter.
Particularly worthy of note is that in this accounting period we have increased by 24% sales of
high value-added products manufactured by the universal rolling mill.
A major increase in billet sales (81%) is due to our selling excessive stockpiles accumulated at
Chelyabinsk Metallurgical Plant. Most billets were sold for export, as ruble devaluation improved
the profitability of export sales.
In the third quarter, the domestic hardware market improved which enabled us to increase sales of
this type of product by 12%.
Sales of forgings went up by 5% due to a stronger demand in Eurozone countries. The 10-percent
decrease in sales of stampings was due to one of our key wagon-making clients cutting down on
acquisition of track centers.
Ferrosilicon sales from Bratsk Ferroalloy Plant to the Groups facilities and third parties went
up by 29%, with this highly positive dynamics due to an increase in export volumes. The plant is
currently operating at full load.
In the power segment, the main reason for the 19-percent increase in electricity production
year-on-year was the step-up in the load of Southern Kuzbass Power Plant following the 2014
repairs. The 7-percent decrease in heat production was due to the halt in heat supply of several
third-party consumers.
***
Mechel OAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
***
Mechel is an international mining and steel company which employs over 67,000 people. Its products
are marketed in Europe, Asia, North and South America, Africa. Mechel unites producers of coal,
iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its
enterprises work in a single production chain, from raw materials to high value-added products.
***
Some of the information in this press release may contain projections or other forward-looking
statements regarding future events or the future financial performance of Mechel, as defined in the
safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to
caution you that these statements are only predictions and that actual events or results may differ
materially. We do not intend to update these statements. We refer you to the documents Mechel files
from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These
documents contain and identify important factors, including those contained in the section
captioned Risk Factors and Cautionary Note Regarding Forward-Looking Statements in our Form
20-F, that could cause the actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others, the achievement of anticipated
levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of
competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact
of developments in the Russian economic, political and legal environment, volatility in stock
markets or in the price of our shares or ADRs, financial risk management and the impact of general
business and global economic conditions.
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