Mechel Buys 55% of Vanino Port - Analyst Blog
17 Gennaio 2013 - 10:10AM
Zacks
Russian miner Mechel
OAO (MTL) has acquired a controlling stake in Vanino Sea
Trade Port OAO for about RUB15.5 billion ($512.5 million). The
takeover is in sync with the company’s efforts to expand its export
capacities in Asia Pacific.
The Government of the Russian Federation, in December 2012, issued
a decree related to the sale of federally owned shares of Vanino
Sea Trade Port OAO and Mechel was declared the buyer. The company
purchased 55% of share capital (or 73.33% of common shares) of
Vanino.
Port Vanino is one of Russia's ten largest ports and is suitably
located for Mechel for providing deliveries to the Asia Pacific
region. The port is also open to navigation throughout the year and
is the largest transport hub in the Khabarovsk Region. Port Vanino
can process vessels up to 45,000 tons deadweight and has 64 cranes
of 6 to 100 ton hoisting capacity.
With access to the port’s transhipment capacities, Mechel can
increase its exports given the port’s greater storage capacity.
According to Mechel, Port Vanino’s coal transhipment capacity can
be increased to 7 million tons in 2013 without incurring any
significant costs. This also saves Mechel from building its own
storage terminal at Vanino for the next 3-5 years. By utilizing the
capacities of the port, Mechel can increase its customer base.
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 is mainly focusing on growth and cost-cutting measures.
Last month, the company released
its third-quarter 2012 results. It posted consolidated net income
of $54.9 million in the quarter compared with a net income of $25.7
million in the year-ago quarter, representing a roughly 114%
increase. Revenues for the quarter came in at roughly $2.71
billion, down 15.4% from $3.21 billion in the year-ago period.
Mechel competes with
ArcelorMittal (MT), among others. The company
retains a short-term Zacks Rank #3 (Hold). We currently have a
long-term (more than 6 months) Neutral recommendation on its
shares.
ARCELOR MITTAL (MT): Free Stock Analysis Report
MECHEL OAO ADS (MTL): Free Stock Analysis Report
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