Mechel Reports 2015 Operational Results
May 13 2016 - 4:00AM
Mechel PAO (MICEX:MTLR) (NYSE:MTL)
, one of
the leading Russian mining and metals companies, announces 2015
operational results.
Production and sales for
2015
Production:
|
|
|
|
|
|
|
Product
Name |
2015,thousandtonnes |
2014,thousandtonnes |
% |
4Q2015,thousandtonnes |
3Q2015,thousandtonnes |
% |
Run-of-Mine Coal |
23,181 |
22,624 |
+2 |
5,776 |
5,957 |
-3 |
|
|
|
|
|
|
|
Pig Iron |
4,065 |
3,946 |
+3 |
1,006 |
1,014 |
-1 |
|
|
|
|
|
|
|
Steel |
4,321 |
4,269 |
+1 |
1,081 |
1,093 |
-1 |
|
|
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
Product
Name |
2015,thousandtonnes |
2014,
thousand tonnes |
% |
4Q2015,thousandtonnes |
3Q2015,thousandtonnes |
% |
Coking coal
concentrate |
8,215 |
10,140 |
-19 |
2,014 |
2,133 |
-6 |
|
PCI |
2,251 |
3,063 |
-27 |
457 |
472 |
-3 |
|
Anthracites |
2,076 |
2,107 |
-1 |
506 |
462 |
+10 |
|
Steam
coal |
6,564 |
5,958 |
+10 |
1,657 |
1,867 |
-11 |
|
Iron ore
concentrate |
2,806 |
3,120 |
-10 |
737 |
752 |
-2 |
|
Coke |
2,911 |
3,234 |
-10 |
670 |
757 |
-11 |
|
Ferrosilicon |
81 |
87 |
-7 |
22 |
23 |
-4 |
|
Flat
products |
478 |
451 |
+6 |
121 |
121 |
0 |
|
Long
products |
2,743 |
2,960 |
-7 |
641 |
734 |
-13 |
|
Billets |
232 |
117 |
+98 |
64 |
56 |
+14 |
|
Hardware |
692 |
766 |
-10 |
162 |
189 |
-14 |
|
Forgings |
54 |
53 |
+2 |
12 |
15 |
-19 |
|
Stampings |
67 |
84 |
-20 |
17 |
18 |
-5 |
|
Electric power
generation (thousand kWh) |
4,137,441 |
3,682,128 |
+12 |
1,033,832 |
819,502 |
+26 |
|
Heat power
generation (Gcal) |
5,666,382 |
6,106,092 |
-7 |
1,775,478 |
751,828 |
+136 |
|
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|
|
|
|
|
Key investment projects progress
Universal rolling mill:
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|
|
|
|
|
|
|
2015,thousandtonnes |
2014,thousandtonnes |
% |
4Q2015,thousandtonnes |
3Q2015,thousandtonnes |
% |
Rails, beams and shapes |
175 |
124 |
+41 |
56 |
42 |
+33 |
|
|
|
|
|
|
|
Elga Coal Complex:
|
|
|
|
|
|
|
|
2015,thousandtonnes |
2014,thousandtonnes |
% |
4Q2015,thousandtonnes |
3Q2015,thousandtonnes |
% |
Run-of-mine coal |
3,952 |
1 224 |
+223 |
962 |
1,126 |
-15 |
|
|
|
|
|
|
|
Mechel PAO’s Chief Executive Officer Oleg
Korzhov commented on the 2015 operational results:
“In 2015, Mechel’s coal assets worked in a new
reality. On one hand, ruble devaluation had a positive impact on
mining costs and helped the company’s enterprises consolidate their
position as compared to their competitors. Our production results
improved, while mining at the Elga deposit more than tripled. On
the other hand, in 2015 international commodity prices demonstrated
historical lows as the market failed to reach the bottom many
experts hoped for last year and the year before last. At the same
time, 2015 saw further decrease of Chinese imports as China,
the world’s most important coal consumer, plummeted its imports by
over 40% since 2013. The latter factor became key for our sales
policy. For example, last year Yakutugol decreased exports by 30%,
while domestic sales went up by 44%.
“Coking coal concentrate sales went down by 19%
in the accounting period. The decrease in sales to China was partly
compensated by reorienting our sales to the domestic market where
the price dynamics has been more attractive this year. We have also
increased sales of coking coal concentrate to other Asian countries
— Japan and Indonesia. To reduce buying from third-party producers
in 2015 we supplied additional volumes of coking coal concentrate
from Elga Coal Complex to the Group’s steelmaking facilities.
“The slump in PCI sales was primarily due to the
global decrease in demand both from Asian and European countries.
China and South Korea were our key markets for PCI in 2015.
“We managed to maintain anthracite sales at the
same level as last year by redirecting exports from China to
Vietnam as well as Southern Europe.
“Steam coal sales went up by 10% due to an
increase in production at Elga. We are fully compliant with our
commitments as per active contracts with Russian generating
companies and our Asian customers.
“Sales of iron ore concentrate went down by 10%
as production volumes decreased due to negative market conditions.
Uninterrupted supply of iron ore concentrate to Chelyabinsk
Metallurgical Plant’s furnace facilities is a priority for us.
“Mechel’s coke and chemical enterprises
decreased coke production in 2015 due to unstable demand. Two
thirds of coke production was supplied to the Group’s
facilities.
“The steel division has increased production of
steel and pig iron by 1% and 3% respectively, year-on-year. The
universal rolling mill continues to master new types of rolls. In
this accounting period we achieved a major increase (+41%) in
production of high value-added products. Despite a significant
decrease in apparent consumption of construction-purpose long rolls
in Russia, we maintained our domestic market supply on last year’s
level, increasing our share of this market we consider strategic.
We also optimized our portfolio regarding other types of long
rolls, thus minimizing production of low value-added products.
“Flat rolls production went up by 10% due to
several new contracts with major Russian companies and sale of
excessive stockpiles by Mechel Service Global sales network in
Western Europe.
The 10-percent decrease in hardware sales is due
to the shrinking of our domestic market and the overall negative
dynamics of Russia’s hardware market which persists into 2016.
“Bratsk Ferroalloy Plant increased ferrosilicon
production by 2% year-on-year. The seven-percent decrease in
ferrosilicon sales was due to a shifting in shipment schedule for
the plant’s contracted products from this accounting period into
early 2016.
“Steady demand for forgings in Eurozone
countries enabled us to increase sales of these products by 2%.
“Oversupply of rolling stock on the railway
market in 2015 and the resulting slump in demand for new wagons had
their impact on our stampings sales which fell by 20%. As Russian
government is taking measures to support the wagon-making industry,
we expect more orders to come this year.
“The power division last year managed to
increase electricity production by 12% due to the stable work of
Southern Kuzbass Power Plant which had successfully undergone
equipment modernization. The seven-percent decrease in heat
production was due to the halt in heat supply of several
third-party consumers.”
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.
Mechel PAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
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