Mechel Reports 9M2018 Operational Results
27 Novembre 2018 - 9:00AM
Mechel PAO (MOEX: MTLR, NYSE: MTL), one of the leading
Russian mining and metals companies, announces 9M2018 operational
results.
Production and sales for
9M2018
Production: |
|
Product
Name |
9M2018,thousandtonnes |
9M2017,thousandtonnes |
% |
3Q2018,thousandtonnes |
2Q2018,thousandtonnes |
% |
|
|
|
|
|
|
|
Run-of-Mine
Coal |
14,472 |
15,694 |
-8 |
4,781 |
4,726 |
+
1 |
|
Pig
Iron |
2,817 |
3,048 |
-8 |
889 |
943 |
-6 |
|
Steel |
2,976 |
3,217 |
-7 |
925 |
995 |
-7 |
Electric power
generation (thousand kWh) |
2,368,074 |
2,498,812 |
-5 |
625,884 |
825,955 |
-24 |
Heat power
generation (Gcal) |
3,942,086 |
3,770,310 |
+5 |
665,938 |
1,063,434 |
-37 |
Sales: |
|
Product
Name |
9M2018,thousandtonnes |
9M2017,thousandtonnes |
% |
3Q2018,thousandtonnes |
2Q2018,thousandtonnes |
% |
|
|
|
|
|
|
|
Coking coal
concentrate |
5,401 |
5,970 |
-10 |
1,881 |
1,911 |
-2 |
Including coking coal
concentrate supplied to third parties |
3,268 |
3,669 |
-11 |
1,207 |
1,174 |
+3 |
PCI |
992 |
1,006 |
-1 |
312 |
367 |
-15 |
Including PCI supplied
to third parties |
992 |
1,006 |
-1 |
312 |
367 |
-15 |
Anthracites |
878 |
1,219 |
-28 |
230 |
329 |
-30 |
Including anthracites
supplied to third parties |
724 |
1,057 |
-31 |
183 |
274 |
-33 |
Thermal coal |
4,319 |
4,642 |
-7 |
1,298 |
1,411 |
-8 |
Including thermal coal
supplied to third parties |
3,718 |
4,110 |
-10 |
1,144 |
1,219 |
-6 |
Iron ore
concentrate |
1,398 |
2,037 |
-31 |
551 |
495 |
+11 |
Including iron ore
concentrate supplied to third parties |
42 |
23 |
+82 |
24 |
10 |
+153 |
Coke |
1,831 |
2,038 |
-10 |
616 |
585 |
+5 |
Including coke supplied
to third parties |
502 |
594 |
-15 |
196 |
138 |
+43 |
Ferrosilicon |
55 |
47 |
+15 |
17 |
20 |
-16 |
Long
rolls |
2,110 |
2,214 |
-5 |
699 |
724 |
-3 |
Flat
rolls |
390 |
453 |
-14 |
119 |
133 |
-10 |
Hardware |
478 |
504 |
-5 |
165 |
167 |
-1 |
Forgings |
32 |
35 |
-6 |
11 |
10 |
+6 |
Stampings |
110 |
69 |
+60 |
38 |
38 |
-1 |
Key investment projects progress
Universal rolling mill: |
|
|
9M2018,thousandtonnes |
9M2017,thousandtonnes |
% |
3Q2018,thousandtonnes |
2Q2018,thousandtonnes |
% |
|
|
|
|
|
|
|
Rails, beams
and shapes |
403 |
484 |
-17 |
147 |
115 |
+27 |
Elga coal
complex: |
|
|
|
|
|
|
|
|
9M2018,thousandtonnes |
9M2017,thousandtonnes |
% |
3Q2018,thousandtonnes |
2Q2018,thousandtonnes |
% |
|
|
|
|
|
|
|
Run-of-mine
coal |
3,899 |
3,049 |
+28 |
1,359 |
1,343 |
+1 |
|
|
|
|
|
|
|
Mechel PAO’s Chief Executive Officer
Oleg Korzhov commented on the 9M2018 operational
results:
“Optimization and increased efficiency of our
mining segment, which we began last year, ensured a fairly stable
level of mining at Mechel’s coal facilities throughout the year. We
have already acquired some 60 units of mining equipment, and
brought in contractors with equipment fleets of their own. Due to
intensive technical upgrades, we managed a major increase in strip
mining which prepared more coal reserves for extraction in the near
future.
“Despite an overall decrease in coking coal
concentrate sales by 2% quarter-on-quarter, we increased coking
coal concentrate sales to third parties by 3%. This was due to the
boost in exports to Asia. In the third quarter we took advantage of
good markets and expanded our market base, making this year’s first
our coking coal concentrate shipments to India and Indonesia.
“The 15-percent decrease in PCI sales and
30-percent drop in anthracite sales in the third quarter was
primarily due to a shortage of gondola cars in our network. At the
same time, we have accumulated major stocks and plan to sell them
in the next accounting period.
“The 8-percent decrease in thermal coal sales
quarter-on-quarter was due to a slump in mining at Southern Kuzbass
Coal Company as a longwall at Olzherasskaya-Novaya Underground mine
was being reassembled. A new mining area has been launched in early
November. In the third quarter we also re-oriented sales of our
current thermal coal stocks in favor of more profitable Asian
markets — for example, we have nearly tripled our sales to Vietnam
and began shipping coal to Thailand.
“Coke sales to third parties went up by 42% in
the third quarter as we increased sales to Serbia, as well as due
to seasonal demand from Turkish companies.
“Iron ore concentrate sales to third parties
also demonstrated positive dynamics as mining increased at
Korshunov Mining Plant due to our acquiring new mining equipment
and resuming cooperation with major clients.
“In the third quarter, the Group’s steel
division decreased production of pig iron and steel by 6% and 7%
accordingly due to major repairs at Chelyabinsk Metallurgical Plant
in summer. The third quarter was also filled with several important
events for our universal rolling mill — we earned certificates for
our rails for traffic speed up to 250 km/h and mastered production
of new H- and I-beam types that are highly in demand. We constantly
expand our rolling mill’s product range — over these nine months we
have added 14 new shaped rolls to the 60 we have already
mastered.
“Overall sales of flat rolls in this accounting
period went down by 10% due to planned repairs of one of our
concasters. Nevertheless, in response to the current price trend we
increased production and sales of high-margin stainless flat rolls.
Thus, in September we reached the level of stainless sales that
nearly tripled the monthly average sold in January-August.
“Long rolls sales went down by 3%
quarter-on-quarter due to Chelyabinsk Metallurgical Plant’s cutting
down on rebar production. The plant gave priority to maximum output
of highly profitable products. We more than doubled sales of our
rails and maintained sales volumes for beams, which are in stable
demand both in Russia and the European Union.
“Sales of stampings generally remained on the
previous quarter’s level. With a large-scale upgrade of railway car
park now underway, demand for railway axles from leading Russian
wagonbuilders remains high, and we are meeting all our contractual
obligations. Forgings sales went up by 6% as Urals Stampings
Plant’s Chelyabinsk branch brought in new clients.
“Our power division’s facilities cut electricity
production quarter-on-quarter due to summer repairs at Southern
Kuzbass Power Plant as part of quality preparation for the
fall-winter season. The 5% increase in heat generation over these
nine months is due to temperatures being lower in this period,
which put off the end of the heating season till the middle of this
year’s second quarter.”
Mechel PAOEkaterina VidemanTel: + 7 495 221 88
88ekaterina.videman@mechel.com
Mechel is an international mining and steel
company. 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.
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