Revenue
– 130.2
bln rubles, Consolidated EBITDA*
- 25.7 bln
rubles
Mechel PAO (MICEX:MTLR) (NYSE:MTL),
a
leading Russian mining and steel group, announces financial results
for the 1H 2016.
Mechel PAO’s Chief Executive Officer Oleg
Korzhov commented on the 1H 2016 results:“If you compare the
results of this year’s first six months with the same period of the
previous year, you can see similar production volumes and revenue.
Nevertheless, the company’s financial results have changed for the
better — Mechel showed an increase in its operating profit by 23%
to 17.2 billion rubles, net profit of 8.3 billion rubles and
restoration of our cash flows.“A number of external and internal
factors had their positive impact on the company’s results. The
beginning of spring brought a revival of steelmaking commodities
export markets and the domestic steel market. Product prices
demonstrated growth compared to the minimums reached at the end of
the previous year and at the beginning of this year. The market
situation prompted a growth of the company’s operating profit and
improvement of its financial results. In this period we completed
restructuring of our loans with Russian state banks, which enabled
us to balance our financial payments. Also in late June we
completed the deal on selling 49% in the Elga project to
Gazprombank, which allowed us to source repayment of loans in the
amount of 32.9 billion rubles and overdue interest payments from
the previous periods.“Currently we see a weaker activity on the
metals market, which is offset by a major growth of spot prices for
hard coking coal, and that will enable us to retain the Group’s
profitability as a whole.”
Consolidated Results For The 1H
2016
Mln rubles |
1H’ 16 |
1H’ 15 |
% |
Revenuefrom external customers |
|
130,197 |
|
|
130,334 |
|
|
0 |
% |
Operating profit |
|
17,200 |
|
|
13,945 |
|
|
23 |
% |
EBITDA |
|
25,721 |
|
|
23,602 |
|
|
9 |
% |
EBITDA, margin |
|
20 |
% |
|
18 |
% |
|
Net profit (loss) attributable to shareholders of
Mechel PAO |
|
8,300 |
|
|
(16,746 |
) |
|
Mining Segment
Mechel Mining Management Company OOO’s Chief
Executive Officer Pavel Shtark noted:“In late 2015, the
metallurgical coal market reached its minimum. Despite the positive
trends which appeared in 1Q2016, the overall price level in this
period was significantly lower than the previous year’s. In the
first and second quarters of this year, contract prices for hard
coking coal were $81 and $84 per tonne, while in the first and
second quarters of 2015 those prices were $117 and $109.5 per
tonne. The decrease of sales of several types of products as market
demand weakened in 1Q2016, had an additional negative impact on the
division’s revenue. Nevertheless, optimization of our costs
structure enabled us, despite a drop in revenue and prices, to
increase the division’s EBITDA by 10% to 14.4 billion rubles, while
the EBITDA margin went from 23% to 26% year-on-year.“It is worth
noting that by mid-summer the level of prices for Australian coal
returned to the early 2015 level. Limited supply of imported coal
in China became the chief factor for growth. Also, due to strong
rains in eastern and southern China shipping within the country
became complicated, and consumers became more active in buying
imported raw materials. Record low levels of commodity stock in
Chinese ports and storages also contribute to increased demand. As
of now, spot prices for Australian hard coking coal reached $128
per tonne, which should uphold the trend for a quarterly increase
in contract prices.”
EBITDA* - Adjusted EBITDA. Please find the calculation of the
Adjusted EBITDA and other non-IFRS measures used here and hereafter
in Attachment A.
Mln rubles |
1H’ 16 |
1H’ 15 |
% |
Revenue from external customers |
|
40,059 |
|
|
43,168 |
|
|
-7 |
% |
Revenueinter-segment |
|
14,711 |
|
|
13,309 |
|
|
11 |
% |
EBITDA |
|
14,438 |
|
|
13,139 |
|
|
10 |
% |
EBITDA, margin |
|
26 |
% |
|
23 |
% |
|
Steel Segment
Mechel-Steel Management Company OOO’s Chief
Executive Officer Andrey Ponomarev noted:“For the second year in a
row, the year’s first two quarters demonstrate a radically
different market situation. The previous year began with an upsurge
in demand and prices for construction product range affected by the
devaluation of the ruble. After that, the heightened demand was
calmed, prices went down and stayed low by the end of 1H2015. In
late 2015 and early 2016, prices were at their minimum, but then,
as export prices and steel deficit on local markets grew, prices
for the division’s products also increased.“Despite mixed market
dynamics in each quarter, average prices for each half-year were
the same. Increased sales, particularly of rebar and other types of
long products, resulted in growth of revenue by 5%. Comparable
growth of costs allowed us to retain EBITDA margin flat.
“Prices on the steel market are currently being
adjusted downwards. The division’s future operational results will
be less volatile due to the change in the sales structure through
this year’s planned increase of the Chelyabinsk Metallurgical
Plant’s universal rolling mill capacity utilization to 60%, as well
as the growth in production of high-quality steel grades at the
group’s facilities.”
Mln rubles |
1H’ 16 |
1H’ 15 |
% |
Revenue from external customers |
|
77,604 |
|
|
73,644 |
|
|
5 |
% |
Revenueinter-segment |
|
3,619 |
|
|
3,392 |
|
|
7 |
% |
EBITDA |
|
9,520 |
|
|
9,413 |
|
|
1 |
% |
EBITDA, margin |
|
12 |
% |
|
12 |
% |
|
Power Segment
Mechel-Energo OOO’s Chief Executive Officer Petr
Pashnin noted:“The division continues to demonstrate positive
financial results. Despite a minor decrease in revenue, which was
partly due to additional repairs and reconstruction of our
generating facilities, our operational efficiency enabled us to
improve our financial results.”
Mln rubles |
1H’ 16 |
1H’ 15 |
% |
Revenue from external customers |
|
12,535 |
|
|
13,523 |
|
|
-7 |
% |
Revenueinter-segment |
|
7,899 |
|
|
7,467 |
|
|
6 |
% |
EBITDA |
|
2,014 |
|
|
1,339 |
|
|
50 |
% |
EBITDA, margin |
|
10 |
% |
|
6 |
% |
|
The management of Mechel will host a conference
call today at 18:00 p.m. Moscow time (4:00 p.m. London time, 11
a.m. New York time) to review Mechel’s financial results and
comment on current operations. The call may be accessed via the
Internet at http://www.mechel.com, under the Investor Relations
section.
Mechel is one of the leading Russian companies. Its
business includes three operating segments: mining, steel and
power. Mechel unites producers of coal, iron ore concentrate,
steel, rolled products, ferroalloys, hardware, heat and electric
power. Mechel products are marketed domestically and
internationally.
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.
Attachments to the 1H 2016 Earnings Press
Release
Attachment A
Non-IFRS financial measures. This press release
includes financial information prepared in accordance with
International Financial Reporting Standards, or IFRS, as well as
other financial measures referred to as non-IFRS. The non-IFRS
financial measures should be considered in addition to, but not as
a substitute for the information prepared in accordance with
IFRS.
Adjusted EBITDA (EBITDA) represents net profit
or loss before Depreciation, depletion and amortization, Foreign
exchange (gain) loss, net, Finance costs, including fines and
penalties on overdue loans and borrowings and finance leases
payments, Finance income, Net result on the disposal of non-current
assets, Impairment of goodwill and other non-current assets,
Allowance for doubtful accounts, Write-offs of inventories to
net realisable value, Loss (profit) after tax from discontinued
operations, net, Net result on the disposal of subsidiaries, Income
(loss) attributable to non-controlling interests, Income tax
(benefit) expense, Pension service cost and actuarial loss, other
expenses, Fines and penalties and Gain on write-off of accounts
payable with expired legal term. Adjusted EBITDA margin is defined
as adjusted EBITDA as a percentage of our Revenue. Our adjusted
EBITDA may not be similar to EBITDA measures of other companies.
Adjusted EBITDA is not a measurement under IFRS and should be
considered in addition to, but not as a substitute for, the
information contained in our interim condensed consolidated
statement of profit (loss). We believe that our adjusted EBITDA
provides useful information to investors because it is an indicator
of the strength and performance of our ongoing business operations,
including our ability to fund discretionary spending such as
capital expenditures, acquisitions and other investments and our
ability to incur and service debt. While interest expenses,
depreciation, depletion and amortization are considered operating
expenses under IFRS, these expenses primarily represent the
non-cash current period allocation of costs associated with
non-current assets acquired or constructed in prior periods. Our
adjusted EBITDA calculation is commonly used as one of the bases
for investors, analysts and credit rating agencies to evaluate and
compare the periodic and future operating performance and value of
companies within the metals and mining industry.
Adjusted net profit (loss) represents net profit
(loss) before Impairment of goodwill and other non-current assets,
Loss (profit) after tax from discontinued operations, net, Net
result on the disposal of subsidiaries, Effect on net loss
attributable to non-controlling interests, Foreign exchange (gain)
loss, net, Pension service cost and actuarial loss, other expenses,
Fines and penalties and, Gain on write-off of accounts payable with
expired legal term. Our adjusted net profit (loss) may not be
similar to adjusted net profit (loss) measures of other companies.
Adjusted net profit (loss) is not a measurement under IFRS and
should be considered in addition to, but not as a substitute for,
the information contained in our interim condensed consolidated
statement of profit (loss). We believe that our adjusted net profit
(loss) provides useful information to investors because it is an
indicator of the strength and performance of our ongoing business
operations. While impairment of goodwill and other non-current
assets is considered operating expenses under IFRS, these expenses
represent the non-cash current period allocation of costs
associated with assets acquired or constructed in prior periods.
Our adjusted net profit (loss) calculation is used as one of the
bases for investors, analysts and credit rating agencies to
evaluate and compare the periodic and future operating performance
and value of companies within the metals and mining industry.
Our calculations of Net debt, excluding fines
and penalties on overdue amounts *** and trade working capital are
presented below:
Mln rubles |
|
30.06.2016 |
|
|
31.12.2015 |
|
|
30.06.2015 |
|
Short-term borrowings
and current portion of long-term debt |
|
410,334 |
|
|
444,199 |
|
|
371,596 |
|
Interest payable |
|
16,246 |
|
|
27,269 |
|
|
17,454 |
|
Long-term debt |
|
8,235 |
|
|
4,308 |
|
|
885 |
|
less Cash and cash
equivalents |
|
(2,822 |
) |
|
(3,079 |
) |
|
(2,500 |
) |
Net debt, excluding finance lease liabilities, fines and
penalties on overdue amounts |
|
431,993 |
|
|
472,697 |
|
|
387,435 |
|
|
|
|
|
Finance lease
liabilities, current portion |
|
12,676 |
|
|
13,507 |
|
|
15,474 |
|
Finance lease
liabilities, non-current portion |
|
102 |
|
|
481 |
|
|
56 |
|
Net debt, excluding fines and penalties on overdue
amounts |
|
444,771 |
|
|
486,685 |
|
|
402,965 |
|
|
|
|
|
|
|
|
|
Mln rubles |
|
30.06.2016 |
|
|
31.12.2015 |
|
|
30.06.2015 |
|
Trade and other
receivables |
|
19,979 |
|
|
16,013 |
|
|
19,781 |
|
Inventories |
|
35,354 |
|
|
35,189 |
|
|
32,528 |
|
Other current
assets |
|
9,159 |
|
|
8,191 |
|
|
8,849 |
|
Income tax
receivables |
|
400 |
|
|
603 |
|
|
554 |
|
Trade current assets |
|
64,892 |
|
|
59,996 |
|
|
61,712 |
|
|
|
|
|
Trade and other
payables |
|
50,162 |
|
|
54,602 |
|
|
58,889 |
|
Advances received |
|
3,385 |
|
|
3,492 |
|
|
3,843 |
|
Provisions and other
current liabilities |
|
2,396 |
|
|
2,558 |
|
|
1,836 |
|
Tax payable other than
income tax |
|
10,373 |
|
|
8,034 |
|
|
9,730 |
|
Income tax payable |
|
4,342 |
|
|
5,549 |
|
|
6,269 |
|
Trade current liabilities |
|
70,658 |
|
|
74,235 |
|
|
80,567 |
|
|
|
|
|
Trade working capital |
|
(5,766 |
) |
|
(14,239 |
) |
|
(18,855 |
) |
EBITDA can be reconciled to our interim
condensed consolidated statement of profit (loss) as follows:
*** Calculations of Net debt could differ from indicators
calculated in accordance with loan agreements upon dependence on
definitions in such agreements.
|
Consolidated Results |
|
Mining Segment
**** |
|
Steel Segment
**** |
|
Power Segment
**** |
Mln rubles |
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
Net profit
(loss) attributable to shareholders of Mechel PAO |
|
8,300 |
|
|
(16,746 |
) |
|
|
250 |
|
|
(5,095 |
) |
|
|
7,629 |
|
|
(11,254 |
) |
|
|
669 |
|
|
(110 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
6,566 |
|
|
6,818 |
|
|
|
3,788 |
|
|
4,147 |
|
|
|
2,603 |
|
|
2,475 |
|
|
|
175 |
|
|
196 |
|
Foreign
exchange (gain) loss, net |
|
(17,442 |
) |
|
(1,806 |
) |
|
|
(10,009 |
) |
|
(2,722 |
) |
|
|
(7,358 |
) |
|
927 |
|
|
|
(76 |
) |
|
(11 |
) |
Finance
costs, including fines and penalties on overdue loans and
borrowings and finance leases payments |
|
29,800 |
|
|
32,675 |
|
|
|
22,150 |
|
|
18,108 |
|
|
|
8,153 |
|
|
14,008 |
|
|
|
587 |
|
|
1,224 |
|
Finance
income |
|
(3,887 |
) |
|
(77 |
) |
|
|
(3,551 |
) |
|
(527 |
) |
|
|
(1,337 |
) |
|
(188 |
) |
|
|
(89 |
) |
|
(24 |
) |
Net
result on the disposal of non-current assets, impairment of
goodwill and other non-current assets, allowance for doubtful
accounts and write-offs of inventories to net realisable value |
|
1,230 |
|
|
2,054 |
|
|
|
331 |
|
|
670 |
|
|
|
360 |
|
|
1,177 |
|
|
|
540 |
|
|
206 |
|
Loss
(profit) after tax from discontinued operations, net |
|
244 |
|
|
(598 |
) |
|
|
(41 |
) |
|
(701 |
) |
|
|
270 |
|
|
88 |
|
|
|
15 |
|
|
15 |
|
Net result on the
disposal of subsidiaries |
|
(55 |
) |
|
1 |
|
|
|
- |
|
|
- |
|
|
|
(55 |
) |
|
1 |
|
|
|
- |
|
|
- |
|
Income (loss) attributable to non-controlling interests |
|
862 |
|
|
820 |
|
|
|
273 |
|
|
385 |
|
|
|
465 |
|
|
454 |
|
|
|
125 |
|
|
(19 |
) |
Income
tax (benefit) expense |
|
(630 |
) |
|
242 |
|
|
|
821 |
|
|
(1,162 |
) |
|
|
(1,510 |
) |
|
1,556 |
|
|
|
59 |
|
|
(152 |
) |
Pension
service cost and actuarial loss, other expenses |
|
83 |
|
|
83 |
|
|
|
61 |
|
|
61 |
|
|
|
21 |
|
|
20 |
|
|
|
1 |
|
|
3 |
|
Fines and
penalties |
|
668 |
|
|
273 |
|
|
|
366 |
|
|
(25 |
) |
|
|
295 |
|
|
287 |
|
|
|
8 |
|
|
11 |
|
Gain on
write-off of accounts payable with expired legal term |
|
(18 |
) |
|
(137 |
) |
|
|
- |
|
|
- |
|
|
|
(18 |
) |
|
(137 |
) |
|
|
- |
|
|
- |
|
EBITDA |
|
25,721 |
|
|
23,602 |
|
|
|
14,438 |
|
|
13,139 |
|
|
|
9,520 |
|
|
9,413 |
|
|
|
2,014 |
|
|
1,339 |
|
EBITDA,
margin |
|
20 |
% |
|
18 |
% |
|
|
26 |
% |
|
23 |
% |
|
|
12 |
% |
|
12 |
% |
|
|
10 |
% |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Mln rubles |
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
|
6m 2016 |
6m 2015 |
Net profit
(loss) attributable to shareholders of Mechel PAO |
|
8,300 |
|
|
(16,746 |
) |
|
|
250 |
|
|
(5,095 |
) |
|
|
7,629 |
|
|
(11,254 |
) |
|
|
669 |
|
|
(110 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
Loss
(profit) after tax from discontinued operations, net |
|
244 |
|
|
(598 |
) |
|
|
(41 |
) |
|
(701 |
) |
|
|
270 |
|
|
88 |
|
|
|
15 |
|
|
15 |
|
Net result on the
disposal of subsidiaries |
|
(55 |
) |
|
1 |
|
|
|
- |
|
|
- |
|
|
|
(55 |
) |
|
1 |
|
|
|
- |
|
|
- |
|
Effect on loss attributable to non-controlling interests |
|
(40 |
) |
|
(14 |
) |
|
|
- |
|
|
- |
|
|
|
(40 |
) |
|
(14 |
) |
|
|
- |
|
|
- |
|
Foreign
exchange (gain) loss, net |
|
(17,442 |
) |
|
(1,806 |
) |
|
|
(10,009 |
) |
|
(2,722 |
) |
|
|
(7,358 |
) |
|
927 |
|
|
|
(76 |
) |
|
(11 |
) |
Pension
service cost and actuarial loss, other expenses |
|
83 |
|
|
83 |
|
|
|
61 |
|
|
61 |
|
|
|
21 |
|
|
20 |
|
|
|
1 |
|
|
3 |
|
Fines and
penalties |
|
668 |
|
|
273 |
|
|
|
366 |
|
|
(25 |
) |
|
|
295 |
|
|
287 |
|
|
|
8 |
|
|
11 |
|
Gain on
write-off of accounts payable with expired legal term |
|
(18 |
) |
|
(137 |
) |
|
|
- |
|
|
- |
|
|
|
(18 |
) |
|
(137 |
) |
|
|
- |
|
|
- |
|
Net (loss)
profit, net of income tax |
|
(8,260 |
) |
|
(18,994 |
) |
|
|
(9,374 |
) |
|
(8,482 |
) |
|
|
745 |
|
|
(10,083 |
) |
|
|
618 |
|
|
(91 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit |
|
17,200 |
|
|
13,945 |
|
|
|
9,858 |
|
|
8,048 |
|
|
|
6,284 |
|
|
5,270 |
|
|
|
1,307 |
|
|
916 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Loss on
write-off of property, plant and equipment |
|
121 |
|
|
99 |
|
|
|
109 |
|
|
38 |
|
|
|
13 |
|
|
61 |
|
|
|
- |
|
|
- |
|
Pension
service cost and actuarial loss, other expenses |
|
83 |
|
|
83 |
|
|
|
61 |
|
|
61 |
|
|
|
21 |
|
|
20 |
|
|
|
1 |
|
|
3 |
|
Fines and
penalties |
|
668 |
|
|
273 |
|
|
|
366 |
|
|
(25 |
) |
|
|
295 |
|
|
287 |
|
|
|
8 |
|
|
11 |
|
Adjusted
operating profit |
|
18,072 |
|
|
14,400 |
|
|
|
10,393 |
|
|
8,122 |
|
|
|
6,612 |
|
|
5,637 |
|
|
|
1,316 |
|
|
930 |
|
**** including
inter-segment operations |
|
|
|
|
|
|
|
|
|
|
|
EBITDA* - Adjusted EBITDA. Please find the calculation of the
Adjusted EBITDA and other non-IFRS measures used here and hereafter
in Attachment A.
Attachment B
Interim condensed consolidated statement of financial
position |
|
(All amounts are in
millions of Russian rubles) |
|
|
|
|
|
|
June 30,
2016 |
|
December
31, |
|
|
(unaudited) |
|
2015***** |
Assets |
|
|
|
|
Current
assets |
|
|
|
|
Cash and cash
equivalents |
|
|
2,822 |
|
|
|
3,079 |
|
Trade and other
receivables |
|
|
19,979 |
|
|
|
16,013 |
|
Inventories |
|
|
35,354 |
|
|
|
35,189 |
|
Income tax
receivables |
|
|
400 |
|
|
|
603 |
|
Other current financial
assets |
|
|
17 |
|
|
|
45 |
|
Other current
assets |
|
|
9,159 |
|
|
|
8,191 |
|
Total current
assets |
|
|
67,731 |
|
|
|
63,120 |
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
Property, plant and
equipment |
|
|
210,687 |
|
|
|
215,844 |
|
Mineral licenses |
|
|
37,593 |
|
|
|
38,517 |
|
Non-current financial
assets |
|
|
166 |
|
|
|
194 |
|
Investments in
associates |
|
|
295 |
|
|
|
284 |
|
Deferred tax
assets |
|
|
1,364 |
|
|
|
1,492 |
|
Goodwill |
|
|
21,311 |
|
|
|
21,378 |
|
Other non-current
assets |
|
|
1,036 |
|
|
|
1,243 |
|
Total
non-current assets |
|
|
272,452 |
|
|
|
278,952 |
|
Total
assets |
|
|
340,183 |
|
|
|
342,072 |
|
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Interest-bearing loans
and borrowings, including Interest payable, fines and penalties on
overdue amounts of RUB 36,111 million and RUB 47,475 million as of
June 30, 2016 and December 31, 2015 |
|
|
446,445 |
|
|
|
491,674 |
|
Trade and other
payables |
|
|
50,162 |
|
|
|
54,602 |
|
Advances received |
|
|
3,385 |
|
|
|
3,492 |
|
Provisions |
|
|
2,365 |
|
|
|
2,532 |
|
Pension
obligations |
|
|
1,120 |
|
|
|
1,120 |
|
Finance lease
liabilities |
|
|
12,676 |
|
|
|
13,507 |
|
Income tax payable |
|
|
4,342 |
|
|
|
5,549 |
|
Tax payable other than
income tax |
|
|
10,373 |
|
|
|
8,034 |
|
Other current
liabilities |
|
|
31 |
|
|
|
26 |
|
Total current
liabilities |
|
|
530,899 |
|
|
|
580,536 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Interest-bearing loans
and borrowings |
|
|
8,235 |
|
|
|
4,308 |
|
Provisions |
|
|
3,604 |
|
|
|
3,439 |
|
Pension
obligations |
|
|
3,654 |
|
|
|
3,746 |
|
Finance lease
liabilities |
|
|
102 |
|
|
|
481 |
|
Deferred tax
liabilities |
|
|
10,749 |
|
|
|
11,090 |
|
Other non-current
liabilities |
|
|
171 |
|
|
|
189 |
|
Income tax payable |
|
|
- |
|
|
|
137 |
|
Total
non-current liabilities |
|
|
26,515 |
|
|
|
23,390 |
|
Total
liabilities |
|
|
557,414 |
|
|
|
603,926 |
|
|
|
|
|
|
Equity |
|
|
|
|
Common shares |
|
|
4,163 |
|
|
|
4,163 |
|
Preferred shares |
|
|
833 |
|
|
|
833 |
|
Additional paid-in
capital and other reserves |
|
|
18,598 |
|
|
|
28,322 |
|
Accumulated other
comprehensive income |
|
|
1,579 |
|
|
|
445 |
|
Accumulated
deficit |
|
|
(293,232 |
) |
|
|
(301,565 |
) |
Equity
attributable to equity shareholders of Mechel PAO |
|
|
(268,059 |
) |
|
|
(267,802 |
) |
Non-controlling
interests |
|
|
50,828 |
|
|
|
5,948 |
|
Total
equity |
|
|
(217,231 |
) |
|
|
(261,854 |
) |
Total equity
and liabilities |
|
|
340,183 |
|
|
|
342,072 |
|
Interim condensed consolidated statement of profit (loss)
and other comprehensive income (loss) |
(All amounts are in
millions of Russian rubles) |
|
6 months ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(unaudited) |
|
(unaudited) |
Continuing
operations |
|
|
|
|
Revenue |
|
|
130,197 |
|
|
|
130,334 |
|
Cost of goods sold |
|
|
(72,175 |
) |
|
|
(77,007 |
) |
Gross
profit |
|
|
58,022 |
|
|
|
53,327 |
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses |
|
|
(28,167 |
) |
|
|
(26,636 |
) |
Loss on write-off of
property, plant and equipment |
|
|
(121 |
) |
|
|
(99 |
) |
Allowance for doubtful
accounts |
|
|
(543 |
) |
|
|
(1,022 |
) |
Taxes other than income
taxes |
|
|
(3,168 |
) |
|
|
(2,856 |
) |
Administrative and
other operating expenses |
|
|
(9,100 |
) |
|
|
(8,829 |
) |
Other operating
income |
|
|
277 |
|
|
|
60 |
|
Total selling,
distribution and operating expenses, net |
|
|
(40,822 |
) |
|
|
(39,382 |
) |
Operating
profit |
|
|
17,200 |
|
|
|
13,945 |
|
|
|
|
|
|
Finance income |
|
|
3,887 |
|
|
|
77 |
|
Finance costs including
fines and penalties on overdue loans and borrowings and finance
leases payments of RUB 4,567 million, RUB 10,658 million for the
periods ended June 30, 2016 and 2015 |
|
|
(29,800 |
) |
|
|
(32,675 |
) |
Foreign exchange gain
(loss), net |
|
|
17,442 |
|
|
|
1,806 |
|
Share of profit of
associates |
|
|
16 |
|
|
|
12 |
|
Other income |
|
|
168 |
|
|
|
554 |
|
Other expenses |
|
|
(137 |
) |
|
|
(1 |
) |
Total other
income and (expense), net |
|
|
(8,424 |
) |
|
|
(30,227 |
) |
Profit (loss)
before tax from continuing operations |
|
|
8,776 |
|
|
|
(16,282 |
) |
|
|
|
|
|
Income tax benefit
(expense) |
|
|
630 |
|
|
|
(242 |
) |
Profit (loss)
from continuing operations |
|
|
9,406 |
|
|
|
(16,524 |
) |
|
|
|
|
|
Discontinued
operations |
|
|
|
|
(Loss) profit after tax
from discontinued operations, net |
|
|
(244 |
) |
|
|
598 |
|
Profit (loss)
for the period |
|
|
9,162 |
|
|
|
(15,926 |
) |
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity holders of the
parent |
|
|
8,300 |
|
|
|
(16,746 |
) |
Non-controlling
interests |
|
|
862 |
|
|
|
820 |
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
Other comprehensive
income to be reclassified to profit or loss in subsequent periods,
net of income tax: |
|
|
1,077 |
|
|
|
3,442 |
|
Exchange differences on
translation of foreign operations |
|
|
1,085 |
|
|
|
3,434 |
|
Net (loss) gain on
available for sale financial assets |
|
|
(8 |
) |
|
|
8 |
|
Other comprehensive
income not to be reclassified to profit or loss in subsequent
periods, net of income tax: |
|
|
- |
|
|
|
7 |
|
Re-measurement gain on
defined benefit plans |
|
|
- |
|
|
|
7 |
|
Other
comprehensive income for the period, net of tax |
|
|
1,077 |
|
|
|
3,449 |
|
Total
comprehensive income (loss), net of tax |
|
|
10,239 |
|
|
|
(12,477 |
) |
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity holders of the
parent |
|
|
9,377 |
|
|
|
(13,297 |
) |
Non-controlling
interests |
|
|
862 |
|
|
|
820 |
|
Interim condensed consolidated statement of Cash
Flows |
(All amounts are in
millions of Russian rubles, unless stated otherwise) |
|
6 months ended June 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(unaudited) |
|
(unaudited) |
Cash Flows from
Operating Activities |
|
|
|
|
Net profit (loss) |
|
|
9,162 |
|
|
|
(15,926 |
) |
Loss (profit) from
discontinued operations, net of income tax |
|
|
244 |
|
|
|
(598 |
) |
Net profit
(loss) from continuing operations |
|
|
9,406 |
|
|
|
(16,524 |
) |
Adjustments to
reconcile net profit (loss) from continuing operations to net cash
provided by operating activities: |
|
|
|
|
Depreciation |
|
|
5,745 |
|
|
|
6,072 |
|
Depletion and
amortization |
|
|
822 |
|
|
|
746 |
|
Foreign exchange (gain)
loss, net |
|
|
(17,442 |
) |
|
|
(1,806 |
) |
Deferred income
taxes |
|
|
(252 |
) |
|
|
337 |
|
Allowance for doubtful
accounts |
|
|
543 |
|
|
|
1,022 |
|
Write-off of accounts
receivable |
|
|
210 |
|
|
|
83 |
|
Write-off of
inventories to net realisable value |
|
|
386 |
|
|
|
962 |
|
Revision in estimated
cash flows of rehabilitation provision |
|
|
(12 |
) |
|
|
(15 |
) |
Loss on write-off of
property, plant and equipment |
|
|
121 |
|
|
|
99 |
|
Loss (gain) on sale of
property, plant and equipment |
|
|
10 |
|
|
|
(30 |
) |
Gain on write-off of
accounts payable with expired legal term |
|
|
(16 |
) |
|
|
(137 |
) |
Pension service cost
and actuarial loss, other expenses |
|
|
83 |
|
|
|
83 |
|
Finance income |
|
|
(3,887 |
) |
|
|
(77 |
) |
Finance costs,
including fines and penalties on overdue loans and borrowings and
finance leases payments |
|
|
29,800 |
|
|
|
32,675 |
|
Other |
|
|
72 |
|
|
|
559 |
|
Changes in working
capital items: |
|
|
|
|
Trade and other
receivables |
|
|
(5,247 |
) |
|
|
(355 |
) |
Inventories |
|
|
(1,714 |
) |
|
|
2,292 |
|
Trade and other
payables |
|
|
1,318 |
|
|
|
495 |
|
Advances received |
|
|
65 |
|
|
|
(186 |
) |
Taxes payable and other
current liabilities |
|
|
1,090 |
|
|
|
(260 |
) |
Other current
assets |
|
|
(973 |
) |
|
|
(77 |
) |
Income tax paid |
|
|
(545 |
) |
|
|
(779 |
) |
Net operating cash
flows of discontinued operations |
|
|
(306 |
) |
|
|
(338 |
) |
|
|
|
|
|
Net cash
provided by operating activities |
|
|
19,277 |
|
|
|
24,842 |
|
|
|
|
|
|
Cash Flows from
Investing Activities |
|
|
|
|
Monthly installments
for acquisition of DEMP |
|
|
(2,652 |
) |
|
|
(2,694 |
) |
Proceeds from disposal
of securities |
|
|
- |
|
|
|
143 |
|
Loans issued and other
investments |
|
|
(11 |
) |
|
|
(2 |
) |
Interest received |
|
|
1 |
|
|
|
25 |
|
Proceeds from disposal
of subsidiaries |
|
|
13 |
|
|
|
62 |
|
Proceeds from disposal
of Bluestone |
|
|
- |
|
|
|
101 |
|
Proceeds from loans
issued |
|
|
28 |
|
|
|
7 |
|
Proceeds from disposals
of property, plant and equipment |
|
|
97 |
|
|
|
244 |
|
Purchases of property,
plant and equipment |
|
|
(989 |
) |
|
|
(2,265 |
) |
Interest paid,
capitalized |
|
|
(243 |
) |
|
|
(478 |
) |
Net cash used
in investing activities |
|
|
(3,756 |
) |
|
|
(4,857 |
) |
|
|
|
|
|
Cash Flows from
Financing Activities |
|
|
|
|
Proceeds from
borrowings |
|
|
4,140 |
|
|
|
2,137 |
|
Repayment of
borrowings |
|
|
(36,071 |
) |
|
|
(7,227 |
) |
Interest paid |
|
|
(17,203 |
) |
|
|
(15,412 |
) |
Dividends paid to
noncontrolling interest |
|
|
- |
|
|
|
(1 |
) |
Disposal of
noncontrolling interest in subsidiaries |
|
|
34,300 |
|
|
|
- |
|
Repayment of
obligations under finance lease |
|
|
(968 |
) |
|
|
(849 |
) |
Net cash used
in financing activities |
|
|
(15,802 |
) |
|
|
(21,352 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
12 |
|
|
|
(36 |
) |
|
|
|
|
|
Net decrease in
cash and cash equivalents |
|
|
(269 |
) |
|
|
(1,403 |
) |
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
|
3,079 |
|
|
|
3,983 |
|
Cash and cash
equivalents net of overdrafts at beginning of period |
|
|
891 |
|
|
|
1,344 |
|
Cash and cash
equivalents at end of period |
|
|
2,822 |
|
|
|
2,500 |
|
Cash and cash
equivalents net of overdrafts at end of period |
|
|
622 |
|
|
|
(59 |
) |
*****there were certain reclassifications to
conform with the current period presentation
Alexey Lukashov
Director of Investor Relations
Mechel PAO
Phone: 7-495-221-88-88
Fax: 7-495-221-88-00
alexey.lukashov@mechel.com
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