Mechel Inks Deal with BelAZ - Analyst Blog
30 Novembre 2011 - 9:30AM
Zacks
Russian mining company
Mechel OAO (MTL) inked a deal with Belarus-based
BelAZ OAO, following their agreement-in-principle in August
2011.
As per the partnership agreement,
BelAZ is expected to set up production of cargo platforms on the
dump trucks and further certify a Mechel subsidiary as a BelAZ
service center in the Russian Federation. The financial details of
the transaction were not disclosed.
The pact, expected to run for 10
years, was signed at a session of the Supreme State Council of the
Union State of Russia and Belarus.
According to Mechel's statement,
Mechel Group's mining division plans to use the mining dump trucks
mainly at the Elga coal deposit, which has estimated reserves of
2.2 billion metric ton of coking coal.
In October 2011, Mechel recorded a
net income of $191.9 million for the second quarter of 2011, down
37.9% from the previous quarter’s consolidated net income of $309.1
million.
Revenues in the second quarter
soared 18.3% sequentially to $3.5 billion based on the company’s
relentless efforts restoring production volumes in its mining
segment while preserving high capacity utilization rates in steel
and other segments.
Operating income in the reported
quarter climbed 6.2% to $476.3 million versus the first quarter of
2011. Operating margin was 13.72% in the second quarter of 2011
versus 15.28% in the first quarter of 2011.
Mechel is a leading domestic steel
and coal producer with a strong position in key businesses,
including production of specialty steel and alloys. The company has
the largest coal reserve base in Russia. It is focusing on growth
and cost-cutting measures.
The company owns and controls
essential infrastructure, including ports, rolling stock and power
plants, which provide access to the export markets. However,
Mechel’s large capital-spending program, high debt and substantial
interest burden are matters of concern.
Currently, Mechel has a short-term
(1 to 3 months) Zacks #5 Strong Sell rating and a long-term (6
months) Underperform recommendation.
Mechel faces stiff competition from
Arcelor Mittal (MT) and Norilsk Nickel
Mining and Metallurgical Co.
ARCELOR MITTAL (MT): Free Stock Analysis Report
MECHEL OAO ADS (MTL): Free Stock Analysis Report
Zacks Investment Research
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni Arcelor Mittal (NYSE:MT)
Storico
Da Ott 2023 a Ott 2024