Mechel Suspends Work at Lenina Mine - Analyst Blog
09 Luglio 2012 - 10:30AM
Zacks
Russian Mining company,
Mechel OAO (MTL) announced temporary suspension of
work at its V.I. Lenina underground mine located in Russia. The
work at the mine was halted after an order was passed by the
Mezhdurechensk city court, following an inspection conducted by the
Mezhdurechensk territorial branch of the Southern Siberian
department of the Federal Agency for Ecological, Technological and
Nuclear Monitoring.
As per the company, most of the monitoring agency's requirements
have been met and most of the violations have been prevented. The
company expects to resume work at the mine within a short
period.
Last month, Mechel released its first-quarter 2012 financial
results. The company recorded consolidated net income of $218
million in the quarter, down 29.5% from last year’s $309.2 million.
Revenues in the quarter came in at $3 billion, up modestly from
$2.9 billion posted in the year-ago period.
The company’s margins took a sharp hit as operating income dropped
30% from last year to $314 million and adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA) declined
18.2% to $463.4 million in the quarter.
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
and mainly focuses on growth and cost-cutting measures. Its main
competitors include ArcelorMittal (MT).
Mechel owns and controls essential
infrastructure, including ports, rolling stock and power plants,
which provide access to export markets. However, the company could
be affected by its high debt and interest burden and might not be
able to keep up with its huge capital-spending program. Currently
the company retains a Zacks #3 Rank, indicating a short-term (1 to
3 months) “Hold” rating.
ARCELOR MITTAL (MT): Free Stock Analysis Report
MECHEL OAO ADS (MTL): Free Stock Analysis Report
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