Mechel Reports 1H2015 Operational Results
September 21 2015 - 8:46PM
Mechel OAO (MICEX:MTLR) (NYSE:MTL),
one of
the leading Russian mining and metals companies, announces 1H2015
operational results.
Production and sales for 1H2015
Production:
Product Name |
1H2015,
thousand tonnes |
1H2014, thousand
tonnes |
% |
2Q2015, thousand
tonnes |
1Q2015,
thousand tonnes |
% |
|
|
|
|
|
|
|
Run-of-Mine
Coal |
11 448 |
11 198 |
+2 |
5 941 |
5 506 |
+8 |
|
Pig Iron |
2 045 |
1 900 |
+8 |
994 |
1 051 |
-5 |
|
Steel |
2 147 |
2 127 |
+1 |
1 045 |
1 102 |
-5 |
|
|
|
|
|
|
|
Sales:
Product Name |
1H2015,
thousand tonnes |
1H2014, thousand
tonnes |
% |
2Q2015, thousand
tonnes |
1Q2015,
thousand tonnes |
% |
|
|
|
|
|
|
|
Coking coal concentrate |
4 068 |
5 354 |
-24 |
2 028 |
2 040 |
-1 |
|
PCI |
1 322 |
1 623 |
-19 |
669 |
653 |
+3 |
|
Anthracites |
1 109 |
1 001 |
+11 |
564 |
544 |
+4 |
|
Steam coal |
3 039 |
2 528 |
+20 |
1 563 |
1 476 |
+6 |
|
Iron ore concentrate |
1 317 |
1 886 |
-30 |
609 |
707 |
-14 |
|
Coke |
1 484 |
1 491 |
0 |
718 |
767 |
-6 |
|
Ferrosilicon |
39 |
42 |
-7 |
17 |
22 |
-22 |
|
Flat products |
237 |
227 |
+4 |
120 |
117 |
+2 |
|
Long products |
1 367 |
1 588 |
-14 |
730 |
637 |
+15 |
|
Billets |
112 |
61 |
+84 |
31 |
81 |
-62 |
|
Hardware |
340 |
384 |
-11 |
170 |
171 |
0 |
|
Forgings |
28 |
26 |
+8 |
14 |
14 |
+2 |
|
Stampings |
32 |
44 |
-27 |
20 |
13 |
+57 |
|
Electric power generation (thousand
kWh) |
2 284 107 |
1 865 378 |
+22 |
1 115 317 |
1 168 791 |
-5 |
|
Heat power generation
(Gcal) |
3 139 076 |
3 374 964 |
-7 |
1 035 991 |
2 103 085 |
-51 |
|
|
|
|
|
|
|
Key investment projects progress
Universal rolling mill:
Product Name |
1H2015,
thousand tonnes |
1H2014, thousand tonnes |
% |
2Q2015, thousand tonnes |
1Q2015,
thousand tonnes |
% |
|
|
|
|
|
|
|
Rails, beams and shapes |
78 |
52 |
+50 |
34 |
44 |
-23 |
|
|
|
|
|
|
|
Elga Coal Complex:
Product Name |
1H2015, thousand
tonnes |
1H2014,
thousand tonnes |
% |
2Q2015,
thousand tonnes |
1Q2015,
thousand tonnes |
% |
|
|
|
|
|
|
|
Run-of-mine coal |
1 864 |
223 |
+734 |
1 022 |
841 |
+21 |
Mechel OAO's Chief Executive Officer Oleg Korzhov
commented on the 2Q2015 operational results:
"Throughout the second quarter, global commodity prices
continued to slump, reaching their 13-year minimum in June.
Nevertheless, the fundamental leadership of most of Mechel's
Russian assets on the global cost curve enables us to preserve
stable production and sales levels since the year's beginning.
"Despite highly complicated market factors, in this accounting
period Mechel not only retained coal mining volumes, but
demonstrated an 8-percent growth on this point.
"Sales of coking coal concentrate from Southern Kuzbass Coal
Company and Yakutugol went down only slightly (by 1%) due to
re-orientation of supplies from export to the domestic market. In
2Q2015 mining at Mechel's key investment project ― the Elga deposit
― went up by 21%.
"The 3-percent increase of PCI sales is primarily due to a hike
in acquisitions from Chinese steelmakers. The 4-percent
quarter-on-quarter rise in anthracite sales was due to a seasonal
increase in supplies to Chelyabinsk Metallurgical Plant's
agglomeration workshop.
"Steam coal sales went up by 6% as compared to 1Q2015 due to an
increase in shipments from the Elga deposit.
"Iron ore concentrate sales in 2Q2015 went down by 14%
quarter-on-quarter due to the cessation of supplies to Asia Pacific
for reasons of unfavorable market situation, as well as planned
repairs at Korshunov Mining Plant's washing facilities.
"The steel segment's production levels went down
quarter-on-quarter, with steelmaking down by 5% and pig iron
production down by 5%. The reason for the decrease lay in planned
equipment repairs in Chelyabinsk Metallurgical Plant's blast
furnace and oxygen converter facilities.
"In 2Q2015, Mechel received a certificate of compliance with the
Customs Union's technical requirements for rails of up to 100
meters in length produced at Chelyabinsk Metallurgical Plant's
universal rolling mill. The company is currently negotiating the
date when our supplies to Russia's largest consumer of this product
type, Russian Railways OAO, will begin.
"In keeping with our strategy of developing the company's steel
business, we increased the share of high value-added products in
our overall sales structure. In 2Q2015 sales of flat rolls went up
by 2% and long rolls ― by 15% quarter-on-quarter due to a seasonal
hike in demand from construction companies. On the domestic market,
the share of our universal rolling mill's structural beams is some
20%. We intend to continue our active expansion into new product
niches.
"The 62-percent decrease in billet sales is due to the fact that
this product's sales to third parties are made residually. Today
the billets we produce are mostly used in the technological cycle
of the Group's steelmaking facilities to produce high-margin end
products.
"In 2Q2015, the market showed an increased demand for stampings
from engineering companies, which enabled us to increase stampings
sales by 57%. We also increased forgings sales by 2% due to a rise
in this product's consumption in Western Europe.
"Sales of ferrosilicon from Bratsk Ferroalloys Plant to the
Group's facilities and third parties remained at the previous
quarter's level. The 22-percent difference is due to some shipments
being transferred to the next accounting period.
"In the power division, in 1H2015 electricity production went up
by 22% as compared to the same period last year due to stable and
accident-free operations at Southern Kuzbass Power Plant where
facilities are being modernized. The 7-percent decrease in heat
production is due to the cessation of our lease of Beloretsk's heat
network complex starting in 2H2014."
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.
CONTACT: Mechel OAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@mechel.com
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