Mechel announces mining segment update
Time:Mon, 28 May 2018 05:45:33 +0800
keywords :
Mr Pavel Shtark Management OOO’s Chief Executive Officer of Mechel Mining noted that “In 1Q 2018 the mining division’s results were weaker both year-on-year and quarter-on-quarter. The main reason of that was the decrease in sales volumes of the division’s products, particularly coking coal concentrate.
Mr Shtark said that “Starting in mid-2017, the division’s facilities are implementing a program aimed at restoring mining volumes to the level of previous years. As of now, we have already acquired and commissioned a large number of mining machines, and brought in contractors with equipment of their own. We managed to attain a major increase in stripping volumes, and coal mining has stabilized. Overall, in 1Q 2018 the division demonstrated a small growth in mining volumes compared to the previous quarter. At the same time, sales of finished products have decreased for a number of reasons. For example, some shipments that have been planned for the first quarter were put off until the second quarter due to railcar shortages.
Mr Shtark said that “Among positive factors I would like to note a significant growth of stripping volumes at our Yakut facilities. Preparing reserves for future mining will help to restore production volumes reduced earlier. In addition, new equipment and machines continue to arrive at the mining division’s facilities, including equipment for washing plants, which will help improve their operational efficiency.
Mr Shtark said that “I would like to note that the market conditions in the first quarter were favorable. Positive dynamics in prices for high-quality coking coal, which we observed in late 2017, caused the first quarter’s contract prices to be fixed at the level of 237 dollars per tonne, which resulted in higher average prices quarter-on-quarter even as spot prices somewhat declined. In this quarter, we see the markets weaker to the level of 4Q 2017, which is still quite acceptable for our company.”
|
Mln rubles
|
1Q’ 18
|
1Q’ 17
|
%
|
1Q’ 18
|
4Q’ 17
|
%
|
Revenue
|
|
|
|
|
|
|
|
from external customers
|
22,724
|
27,988
|
-19%
|
22,724
|
25,444
|
-11%
|
Revenue
|
|
|
|
|
|
|
|
inter-segment
|
9,412
|
12,465
|
-24%
|
9,412
|
9,312
|
1%
|
|
EBITDA
|
10,483
|
19,956
|
-47%
|
10,483
|
14,098
|
-26%
|
|
EBITDA, margin
|
33%
|
49%
|
|
33%
|
41%
|
|
|
|
