Mechel Reports the First Half and Nine Months 2013 Financial Results
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Revenue in 9M2013 amounted to $6.7 billion
Consolidated adjusted EBITDA in 9M2013 amounted to $608 million
Net loss attributable to shareholders of Mechel OAO in 9M2013 amounted to $2.2 billion
MOSCOW, Dec. 23, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), a leading Russian mining and steel group, today announced financial results for the 1H and 9M 2013.
Evgeny Mikhel, Mechel OAO's Chief Executive Officer, commented on the company's 9M2013 financial results:
"This year, the company operated in the conditions of continuing weakness on our key markets, which to a large extent had an impact on its main financial results. Nevertheless, by strictly adhering to our planned course aimed at creating conditions for deleveraging, we managed to resolve the most critical issues. We have successfully negotiated with our creditor banks for covenant holidays until the end of 2014. The program for disposal of non-core assets has largely been implemented. As a result of this business restructuring we saw an improvement in operating cashflows. However, the other side of this process was one-off write-downs that led to a net loss of $2.2 billion for 9 months of 2013.
Production and sales volumes have been maintained at planned levels. We have also successfully ensured funding for our key strategic investment project — the Elga deposit — by obtaining Vnesheconombank's positive decision on project financing.
"Despite a fairly complicated macroeconomic situation, steel production and consumption of raw materials for steelmaking is growing in the world, and we intend to continue focusing on improving production efficiency, market diversification and expanding our client base, to increase Mechel's shareholder value."
Consolidated Results for the 1H 2013 | ||||||
US$ mln | 1H 2013 (1) | 1H 2012 (1)(4) | Change Y-on-Y | 2Q'13 (1) | 1Q'13(1) | Change Q-on-Q |
Revenue from external customers | 4,603 | 5,670 | -19% | 2,243 | 2,360 | -5% |
Intersegment sales | 629 | 697 | -10% | 291 | 338 | -14% |
Operating (loss) / income | (432) | 94 | -560% | (519) | 88 | -690% |
Operating margin | -9.39% | 1.66% | -- | -23.14% | 3.73% | -- |
Net loss attributable to shareholders of Mechel OAO | (2,120) | (605) | 250% | (1,799) | (321) | 460% |
Adjusted net income /(loss) (1) (2) | (398) | 201 | -- | (199) | (199) | -- |
Adjusted EBITDA (1) (3) | 413 | 949 | -56% | 202 | 211 | -4% |
Adjusted EBITDA, margin (1) | 8.97% | 16.74% | -- | 9.00% | 8.94% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). (3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Consolidated Results for the 9M 2013 | ||||||
US$ mln | 9M 2013 (1) | 9M 2012 (1)(4) | Change Y-on-Y | 3Q'13 (1) | 2Q'13(1) | Change Q-on-Q |
Revenue from external customers | 6,692 | 8,222 | -19% | 2,089 | 2,243 | -7% |
Intersegment sales | 896 | 1,017 | -12% | 266 | 291 | -8% |
Operating (loss) / income | (393) | 258 | -252% | 39 | (519) | -108% |
Operating margin | -5.87% | 3.14% | -- | 1.87% | -23.14% | -- |
Net loss attributable to shareholders of Mechel OAO | (2,247) | (550) | 309% | (127) | (1,799) | -93% |
Adjusted net (loss)/income (1) (2) | (483) | 369 | -- | (85) | (199) | -- |
Adjusted EBITDA (1) (3) | 608 | 1,346 | -55% | 196 | 202 | -3% |
Adjusted EBITDA, margin (1) | 9.09% | 16,37% | -- | 9.38% | 9.01% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Mining Segment Results for the 1H 2013 | ||||||
US$ mln | 1H 2013 (1) | 1H 2012 (1)(5) | Change Y-on-Y | 2Q'13 (1) | 1Q'13(1) | Change Q-on-Q |
Revenue from external customers | 1,463 | 1,921 | -24% | 693 | 770 | -10% |
Intersegment sales | 266 | 322 | -17% | 130 | 136 | -4% |
Operating income | 83 | 470 | -82% | 39 | 43 | -9% |
Net income/(loss) attributable to shareholders of Mechel OAO | (217) | 213 | -202% | (110) | (108) | 2% |
Adjusted net (loss)/income (1) (2) | (217) | 233 | -- | (110) | (108) | -- |
Adjusted EBITDA(1) (3) | 251 | 685 | -63% | 127 | 124 | 2% |
Adjusted EBITDA, margin (4) | 14.52% | 30.54% | -- | 15.42% | 13.70% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Mining Segment Results for the 9M 2013 | ||||||
US$ mln | 9M 2013 (1) | 9M 2012 (1)(5) | Change Y-on-Y | 3Q'13 (1) | 2Q'13(1) | Change Q-on-Q |
Revenue from external customers | 2,158 | 2,706 | -20% | 695 | 693 | 0.2% |
Intersegment sales | 376 | 486 | -23% | 110 | 130 | -15% |
Operating income | 145 | 670 | -78% | 62 | 39 | 59% |
Net (loss) / income attributable to shareholders of Mechel OAO | (233) | 427 | -154% | (15) | (110) | -86% |
Adjusted net (loss)/income (1) (2) | (233) | 449 | -- | (15) | (110) | -- |
Adjusted EBITDA (1) (3) | 399 | 990 | -60% | 148 | 127 | 17% |
Adjusted EBITDA, margin (1) | 15.74% | 31.02% | -- | 18.35% | 15.42% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Mining Segment Output and Sales for the 9M 2013 | ||||
Production: | ||||
Product name | 9M 2013, thousand tonnes | 9M 2012, thousand tonnes | 9M 2013 vs. 9M 2012, % | |
Run-of-mine coal | 20,430 | 20,794 | -1.7% | |
Product Sales: | ||||
Product name | 9M 2013, thousand tonnes | 9M 2012, thousand tonnes | 9M 2013 vs. 9M 2012, % | |
Coking coal concentrate | 8,349 | 9,029 | -8% | |
Including coking coal concentrate supplied to Mechel enterprises | 1,699 | 1,950 | -13% | |
PCI | 2,567 | 1,703 | +51% | |
Anthracites | 1,603 | 1,937 | -17% | |
Including anthracites supplied to Mechel enterprises | 99 | 246 | -60% | |
Steam coal | 4,499 | 4,490 | 0% | |
Including steam coal supplied to Mechel enterprises | 1,318 | 1,120 | +18% | |
Iron ore concentrate | 3,083 | 3,219 | -4% | |
Including iron ore concentrate supplied to Mechel enterprises | 21 | 268 | -92% | |
Coke | 2,291 | 2,707 | -15% | |
Including coke supplied to Mechel enterprises | 1,523 | 1,903 | -20% |
Mechel Mining Management Company OOO's Chief Executive Officer Pavel Shtark commented on the mining division's results:
"During this period, the Group's mining division continued to work despite volatility on the markets of raw materials for steelmaking. Despite the change in coal prices, we managed to maintain the division's adjusted EBITDA on a fairly stable level quarter on quarter. This was due to stable volumes of mining and processing as well as the sales subsidiaries' efforts on optimizing the sales structure considering the volatile demand in the regions of our products' consumers. For example, we managed to significantly increase sales of PCI coals by boosting our cooperation with Chinese customers, as well as expanding the client base by including steelmaking facilities of Arcelor Mittal and Tata Steel in Belgium and Britain.
"The seasonal decrease in production costs also had its positive impact on the financial results of the mining division's enterprises.
"We managed to make major headway in financing the Elga project. In September, Vnesheconombank's supervisory board approved financing for the development of Elga Coal Complex's first stage, and in November we drew the first funds within the framework of this financing. Vnesheconombank's participation will ensure that the project's first stage is implemented without financial pressure on the mining division, which will enable us to focus our efforts on ensuring uninterrupted and stable operations at all our enterprises, as well as the Group's deleveraging.
"We therefore enter the coming year with all issues regarding financing of our key investment project well resolved, stable operations at our enterprises and a streamlined and versatile sales system. Taking into account that prices next year should be, on average, no worse than this year, we can expect positive financial results from the division in the future as well."
Steel Segment Results for the 1H 2013 | ||||||
US$ mln | 1H 2013 (1) | 1H 2012 (1)(5) | Change Y-on-Y | 2Q'13 (1) | 1Q'13(1) | Change Q-on-Q |
Revenue from external customers | 2,702 | 3,323 | -19 % | 1,359 | 1,343 | 1% |
Intersegment sales | 119 | 143 | -17% | 50 | 70 | -29% |
Operating loss | (544) | (440) | 24% | (568) | 24 | -2,467% |
Net loss attributable to shareholders of Mechel OAO | (994) | (658) | 51% | (790) | (204) | 287% |
Adjusted net loss (1) (2) | (170) | (69) | -- | (76) | (95) | -- |
Adjusted EBITDA (1) (3) | 127 | 193 | -34% | 64 | 62 | 3% |
Adjusted EBITDA, margin (4) | 4.48% | 5.57% | -- | 4.55% | 4.42% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Steel Segment Results for the 9M 2013 | ||||||
US$ mln | 9M 2013 (1) | 9M 2012 (1)(5) | Change Y-on-Y | 3Q'13 (1) | 2Q'13(1) | Change Q-on-Q |
Revenue from external customers | 3,927 | 4,929 | -20% | 1,225 | 1,359 | -10% |
Intersegment sales | 170 | 192 | -11% | 50 | 50 | 0% |
Operating loss | (563) | (475) | 19% | (18) | (568) | -97% |
Net loss attributable to shareholders of Mechel OAO | (1,088) | (770) | 41% | (94) | (790) | -88% |
Adjusted net loss (1) (2) | (222) | (104) | -- | (52) | (76) | -- |
Adjusted EBITDA (1) (3) | 175 | 281 | -38% | 48 | 64 | -25% |
Adjusted EBITDA, margin (4) | 4.27% | 5.49% | -- | 3.81% | 4.55% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Steel Segment Output and Sales for the 9M 2013 | ||||
Production: | ||||
Product name | 9M 2013, thousand tonnes | 9M 2012, thousand tonnes | 9M 2013 vs. 9M 2012, % | |
Pig iron | 2,908 | 3,107 | -6% | |
Steel | 3,648 | 5,101 | -28% | |
Product Sales: | ||||
Product name | 9M 2013, thousand tonnes | 9M 2012, thousand tonnes | 9M 2013 vs. 9M 2012, % | |
Flat products | 468 | 534 | -12% | |
Including those produced by third parties | 243 | 303 | -20% | |
Long products | 2,747 | 3,107 | -12% | |
Including those produced by third parties | 891 | 666 | +34% | |
Billets | 651 | 1,950 | -67% | |
Including those produced by third parties | 242 | 751 | -68% | |
Hardware and welded mesh | 653 | 737 | -11% | |
Including those produced by third parties | 68 | 39 | +73% | |
Forgings | 52 | 39 | +34% | |
Stampings | 76 | 83 | -8% |
Commenting on the steel segment's results, Mechel-Steel Management Company OOO's Chief Executive Officer Vladimir Tytsky noted:
"This year we continued with optimization of the structure of the division's production and sales facilities. As part of the company's strategy on reforming the asset structure, we disposed of the Romanian-based enterprises. The company stopped producing and selling loss-making products, halted inefficient technological lines and equipment, shut down some of Mechel Service Global sales network's European sales facilities, and decreased or stopped supplies to loss-making partner enterprises. We are constantly working on improving production technologies to cut down on cost in raw materials and energy resources.
"The division's sales volumes and sales structure reflected those changes. Despite a relative decrease in our results as compared to the figures from the same period last year, we have seen an overall recuperation of our financial situation. The division stopped generating losses in non-core assets that were out of line with the company's strategy, and freed up the cash flow. We practically completed our investment program by launching the universal rolling mill at Chelyabinsk Metallurgical Plant. I expect that these changes will have their positive impact on our results in the future."
Ferroalloys Segment Results for the 1H 2013 | ||||||
US$ mln | 1H 2013 (1) | 1H 2012 (1)(5) | Change Y-on-Y | 2Q'13 (1) | 1Q'13(1) | Change Q-on-Q |
Revenue from external customers | 42 | 29 | 45% | 22 | 20 | 10% |
Intersegment sales | 20 | 19 | 9% | 10 | 11 | -9% |
Operating (loss)/income | 1 | -- | -350% | 3 | (1) | -400% |
Net loss attributable to shareholders of Mechel OAO | (891) | (110) | 710% | (881) | (10) | 8,710% |
Adjusted net loss (1) (2) | (7) | (11) | -- | (2) | (5) | -- |
Adjusted EBITDA (1) (3) | 5 | 4 | 25% | 5 | 1 | 733% |
Adjusted EBITDA, margin (4) | 8.43% | 7.97% | -- | 14.68% | 1.83% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Ferroalloys Segment Results for the 9M 2013 | ||||||
US$ mln | 9M 2013 (1) | 9M 2012 (1)(5) | Change Y-on-Y | 3Q'13 (1) | 2Q'13(1) | Change Q-on-Q |
Revenue from external customers | 62 | 49 | 27% | 20 | 22 | -9% |
Intersegment sales | 28 | 28 | 0.2% | 8 | 10 | -20% |
Operating income | 3 | 1 | 104% | 1 | 3 | -67% |
Net (loss)/income attributable to shareholders of Mechel OAO | (888) | (137) | 549% | 3 | (881) | -100% |
Adjusted net loss (1) (2) | (10) | (17) | -- | (3) | (2) | -- |
Adjusted EBITDA (1) (3) | 8 | 8 | 1% | 3 | 5 | -40% |
Adjusted EBITDA, margin (4) | 8.92% | 10.36% | -- | 10.01% | 14.68% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Ferroalloys Segment Sales for the 9M 2013 | |||
Product Sales: | |||
Product name | 9M 2013, thousand tonnes | 9M 2012, thousand tonnes | 9M 2013 vs. 9M 2012, % |
Ferrosilicon | 72 | 57 | +26% |
Including ferrosilicon supplied to Mechel enterprises | 25 | 22 | 11% |
Mechel-Ferroalloys Management Company OOO's Chief Executive Officer Sergey Zhilyakov noted:
"The past period was defined by major changes in the division's structure. After halting Southern Urals Nickel Plant in summer we signed an agreement for the disposal of our ferrochrome assets in Russia and Kazakhstan. As such, financial results of these companies have been excluded from operating income (loss) and presented separately as "loss from discontinued operation". Looking at the results of the renewed division, we must note that the results from the second and third quarters are an improvement on the first quarter's results as well as those from the same periods last year. The division shows stable operational profit. The results' improvement is due to sales growth and our successes in bringing down production costs. Next year, Bratsk Ferroalloy Plant will fully transfer to its own raw materials mined at the Uvatsk quartzite deposit, which will also enable us to improve financial results."
Power Segment Results for the 1H 2013 | ||||||
US$ mln | 1H 2013 (1) | 1H 2012 (1)(5) | Change Y-on-Y | 2Q'13 (1) | 1Q'13(1) | Change Q-on-Q |
Revenue from external customers | 396 | 398 | -1% | 169 | 227 | -26% |
Intersegment sales | 223 | 212 | 5% | 101 | 123 | -18% |
Operating income | 24 | 28 | -14% | 4 | 21 | -81% |
Net (loss) attributable to shareholders of Mechel OAO | (21) | (86) | -76% | (21) | -- | 10,400% |
Adjusted net income/(loss) (1) (2) | (7) | 12 | -- | (14) | 7 | -- |
Adjusted EBITDA (1) (3) | 26 | 32 | -19% | 3 | 23 | -87% |
Adjusted EBITDA, margin(4) | 4.25% | 5.26% | -- | 1.14% | 6.64% | -- |
See Attachment A. | ||||||
(1) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(2) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(3) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(4) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Power Segment Results for the 9M 2013 | ||||||
US$ mln | 9M 2013 (1) | 9M 2012 (1)(5) | Change Y-on-Y | 3Q'13 (1) | 2Q'13(1) | Change Q-on-Q |
Revenue from external customers | 545 | 537 | 1% | 149 | 169 | -12% |
Intersegment sales | 321 | 310 | 4% | 98 | 101 | -3% |
Operating income/(loss) | 18 | 20 | -10% | (7) | 4 | -275% |
Net loss attributable to shareholders of Mechel OAO | (42) | (111) | -62% | (20) | (21) | -5% |
Adjusted net loss (1) (2) | (23) | -- | -- | (15) | (14) | -- |
Adjusted EBITDA (1) (3) | 23 | 26 | -12% | (4) | 3 | -233% |
Adjusted EBITDA, margin(4) | 2.60% | 3.13% | -- | -1.52% | 1.14% | -- |
(1) See Attachment A. | ||||||
(2) Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations, result from companies' disposal and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects). | ||||||
(3) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests, result of disposed companies (incl the result from their disposal) and interest income. | ||||||
(4) Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales. | ||||||
(5) Retrospectively adjusted for the effect from discontinued operations. | ||||||
Power Segment Output and Sales for the 9M 2013 | |||
Product name | 9M 2013 | 9M 2012 | 9M 2013 vs. 9M 2012, % |
Electric power generation (ths. kWh) | 2,890,768 | 3,097,211 | -7% |
Heat power generation (Gcal) | 4,728,075 | 5,409,167 | -13% |
Mechel-Energo OOO's Chief Executive Officer Pyotr Pashnin noted: "Over the past two quarters, the division operated with the cut in production volumes, due to seasonal low demand. We used lower workloads on our equipment to make necessary repairs and maintenance before the season of high electricity and heat consumption. On the whole, the division's profit and operational revenue remained at the same level as last year. The decrease in electricity and heat generation compared to last year's figures was due to two facilities — Toplofikatsia Rousse and Nytva-Energo OOO — leaving the power division."
Recent Highlights
- In June, Mechel announced the decision of the company's Board of Directors to authorize the buyback of up to $100 million of ADRs representing Mechel OAO's common shares.
- In June, the Federal Subsoil Resources Management Agency approved the revised schedule for the works under the subsoil license agreement for development of the Elga coal deposit.
- In June, Mechel announced results of its annual general shareholders' meeting, approving the payment of dividends based upon the results of the 2012 fiscal year and other questions of the agenda.
- In July, Mechel reported that Chelyabinsk Metallurgical Plant fulfilled the order for a new class of steel for helicopter-making for the Russian Helicopters holding.
- In July, Mechel announced the appointment of Pavel Shtark as the new Chief Executive Officer of Mechel Mining Management Company OOO, who replaced Boris Nikishichev, who left the company due to retirement.
- In July, Mechel announced the launch of the universal rolling mill at Chelyabinsk Metallurgical Plant. The universal rolling mill is Russia's first complex universal producer of high-quality structural shapes and rails 12.5 to 100 meters long. The mill's complex includes all necessary technological equipment and uses state-of-the-art rolling, correction, processing and quality control technologies. The mill's capacity is up to 1.1 million tonnes of finished product a year. Investment in the project totaled some 715 million US dollars.
- In July, within the strategy of divesting assets that are not part of the Group's priority development areas, Mechel reported selling 100% of the shares of Toplofikatsia Rousse EAD (TPP Rousse, Bulgaria), 100% of shares of British-based steel plant Invicta Merchant Bar.
- In August Mechel announced signing an agreement for disposal of several ferroalloys assets to Turkey's Yildirim Groupan namely Voskhod Mining Plant (Khromtau, Kazakhstan) and Tikhvin Ferroalloy Plant (Tikhvin, Leningrad Region, Russia).In August, Mechel announced that it has started supplying coal concentrate to the People's Republic of China by rail through new border checkpoint Makhalino — Hunсhun.
- In September, Vnesheconombank Supervisory Board approved financing the development of Elga Coal Complex for a total amount of 2,5 billion US dollars. The funds are to be used to complete the first phase of the Elga deposit's development project, which includes construction of a railroad and a mining and washing complex with an annual capacity of 11.7 million tonnes of run-of-mine coal by 2017. The project's implementation will create over 5,000 new jobs.
- In September, Mechel announced the completion of the construction project for a grinding-mixing complex to produce cement in Chelyabinsk Metallurgical Plant's industrial zone. Its annual capacity is 1.6 million tonnes. Investment in the project totaled 174.4 million US dollars.
- In October, in the presence of the Russian Federation's Prime Minister Dmitry Medvedev, Mechel signs an agreement with Vnesheconombank for allocating the first tranche of financing for Elga Coal Complex amounting to 150 million US dollars within the project financing for Elga Coal Complex's first stage totaling 2.5 billion US dollars.
- In October, Mechel Group, represented by Mecheltrans OOO, sold some 28% of port Vanino's equity capital to an outside investor, retaining a minor share package for itself. The transaction amounted to 5.04 billion rubles. As the consortium of investors is not interested in transshipping their products through Port Vanino, Mechel is able to use the port's entire capacity in the company's interests.
- In December, Mechel announced reaching agreement to extend the grace period and maturity of its USD 1 billion syndicated facility. The agreement was signed on behalf of a syndicate of leading international banks, including ABN Amro, BNP Paribas, Caterpillar Financial Services Corporation, Commerzbank Aktiengesellschaft, ICBC (London) plc., ING Bank N.V., Natixis, Raiffeissen Bank International AG, Societe Generale, UniCredit, VTB.
- In December, Mechel announced reaching agreement on covenant holidays until the end of 2014 on bilateral credit lines from VTB Bank amounting to USD 1.8 billion and on bilateral credit lines from Sberbank of Russia amounting to 44.9 billion rubles (approximately 1.36 billion US dollars).
- In December, Mechel announced signing agreements with Sberbank of Russia on restructuring of part Mechel OAO's debt to the bank (25.5 billion rubles, approximately 773 million US dollars). The Group's obligations to the bank are extended by 5 years, with a grace period until the first quarter of 2015.
Financial Position
Capital expenditure on property, plant and equipment and acquisition of mineral licenses for the 2Q 2013 amounted to $188.8 million, of which $109.3 million was invested in the mining segment, $76.6 million was invested in the steel segment, $2.8 million was invested in the ferroalloy segment and $0 million was invested in the power segment.
As of June 30, 2013, total debt was $9.1 billion. Cash and cash equivalents amounted to $97.1 million and net debt amounted to $9.0 billion (net debt is defined as total debt outstanding less cash and cash equivalents) at end of 2Q 2013.
Capital expenditure on property, plant and equipment and acquisition of mineral licenses for the 3Q 2013 amounted to $91.6 million, of which $37.4 million was invested in the mining segment, $49.7 million was invested in the steel segment, $0.6 million was invested in the ferroalloy segment and $3.9 million was invested in the power segment.
As of September 30, 2013, total debt was $9.1 billion. Cash and cash equivalents amounted to $ 104.3 million and net debt amounted to $9.0 billion (net debt is defined as total debt outstanding less cash and cash equivalents) at end of 3Q 2013.
The management of Mechel will host a conference call today at 9:00 a.m. New York time (2:00 p.m. London time, 6:00 p.m. Moscow time) to review Mechel's financial results and comment on current operations. The call may be accessed via the Internet at http://www.mechel.com, under the Investor Relations section.
Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
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.
Attachments to the 1H 2013 and 9M 2013 Earnings Press Release
Attachment A
Non-GAAP financial measures. This press release includes financial information prepared in accordance with accounting principles generally accepted in the United States of America, or US GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with US GAAP.
Adjusted EBITDA represents earnings before Depreciation, depletion and amortization, Foreign exchange gain/(loss), Loss from discontinued operations, Gain/(loss) from remeasurement of contingent liabilities at fair value, Interest expense, Interest income, Net result on the disposal of non-current assets, Impairment of long-lived assets and goodwill, Provision for amounts due from related parties, Result of disposed companies (incl. the result from their disposal), Amount attributable to noncontrolling interests and Income taxes. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of our net revenues. Our adjusted EBITDA may not be similar to EBITDA measures of other companies. Adjusted EBITDA is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that our adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While interest, depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.
Adjusted net income / (loss) represents net income / (loss) before Loss from discontinued operations, Result from companies' disposal, Impairment of long-lived assets and goodwill and Provision for the amounts due from related parties, including the effect on income tax and amounts attributable to noncontrolling interests. Our adjusted net income / (loss) may not be similar to adjusted net income / (loss) measures of other companies. Adjusted net income / (loss) is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that our adjusted net income / (loss) provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations. While impairment of long-lived assets and goodwill and provision for the amounts due from related parties are considered operating costs under generally accepted accounting principles, these expenses represent the non-cash current period allocation of costs associated with assets acquired or constructed in prior periods. Our adjusted net income / (loss) calculation is used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.
Adjusted EBITDA can be reconciled to our consolidated statements of operations as follows:
Consolidated results | ||||
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (2,119,880) | (605,004) | (1,799,235) | (320,645) |
Add: | ||||
Depreciation, depletion and amortization | 246,483 | 248,019 | 122,058 | 124,425 |
Forex loss gain | 204,795 | 118,702 | 125,137 | 79,659 |
Loss from remeasurement of contingent liabilities at fair value | 998 | 929 | 507 | 492 |
Interest expense | 334,555 | 316,739 | 163,218 | 171,337 |
Interest income | (6,092) | (36,538) | (1,398) | (4,694) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 597,564 | 539,212 | 603,362 | (5,798) |
Loss from discontinued operation, net of income tax | 1,081,224 | 254,143 | 1,055,516 | 25,708 |
Result of disposed companies (incl. the result from their disposal) | 99,342 | 45,920 | (922) | 100,262 |
Amount attributable to non-controlling interests | (3,908) | (10,672) | 4,210 | (8,118) |
Income taxes | (22,221) | 77,336 | (70,682) | 48,460 |
Adjusted EBITDA | 412,859 | 948,786 | 201,770 | 211,088 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (2,246,566) | (550,094) | (126,685) | (1,799,235) |
Add: | ||||
Depreciation, depletion and amortization | 370,418 | 361,007 | 123,935 | 122,058 |
Forex loss / (gain) | 150,881 | (19,310) | (53,914) | 125,137 |
Loss from remeasurement of contingent liabilities at fair value | 1,521 | 1,413 | 522 | 507 |
Interest expense | 546,452 | 472,502 | 211,898 | 163,218 |
Interest income | (6,950) | (52,407) | (857) | (1,398) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 634,102 | 617,783 | 36,539 | 603,363 |
Loss from discontinued operation, net of income tax | 1,084,931 | 296,700 | 3,706 | 1,055,516 |
Result of disposed companies (incl. the result from their disposal) | 101,364 | 58,695 | 2,022 | (922) |
Amount attributable to noncontrolling interests | 2,931 | 7,059 | 6,839 | 4,210 |
Income taxes | (30,643) | 153,239 | (8,422) | (70,681) |
Adjusted EBITDA | 608,441 | 1,346,587 | 195,582 | 201,770 |
Adjusted Net income / (loss) can be reconciled as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (2,119,880) | (605,004) | (1,799,235) | (320,645) |
Impairment of long-lived assets and goodwill and provision for amounts due from related parties | 594,112 | 539,212 | 598,510 | (4,397) |
Loss from discontinued operation | 1,327,698 | 264,346 | 1,301,834 | 25,864 |
Result from companies'disposal | 99,342 | 45,920 | (921) | 100,262 |
Effect on noncontrolling interests | (12,487) | (32,852) | (12,487) | -- |
Effect on income tax | (286,603) | (10,203) | (286,447) | (156) |
Adjusted net (loss) / income | (397,817) | 201,418 | (198,745) | (199,072) |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (2,246,566) | (550,094) | (126,685) | (1,799,235) |
Impairment of long-lived assets and goodwill and provision for amounts due from related parties | 629,392 | 617,661 | 35,280 | 598,510 |
Loss from discontinued operation | 1,330,350 | 311,244 | 2,651 | 1,301,834 |
Result from companies'disposal | 101,363 | 58,695 | 2,022 | (921) |
Effect on noncontrolling interests | (12,365) | (34,480) | 122 | (12,487) |
Effect on income tax | (285,102) | (34,323) | 1,500 | (286,447) |
Adjusted net (loss) / income | (482,927) | 368,703 | (85,110) | (198,745) |
Adjusted EBITDA margin can be reconciled as a percentage to our Revenues as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Revenue, net | 4,602,958 | 5,669,813 | 2,242,835 | 2,360,124 |
Adjusted EBITDA | 412,859 | 948,786 | 201,770 | 211,088 |
Adjusted EBITDA, margin | 8.97% | 16.75% | 9.00% | 8.94% |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Revenue, net | 6,691,925 | 8,222,021 | 2,088,966 | 2,242,835 |
Adjusted EBITDA | 608,440 | 1,346,587 | 195,582 | 201,770 |
Adjusted EBITDA, margin | 9.09% | 16.38% | 9.36% | 9.00% |
Mining Segment | ||||
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net (loss) / income | (217,489) | 212,564 | (109,951) | (107,538) |
Add: | ||||
Depreciation, depletion and amortization | 169,195 | 166,941 | 83,543 | 85,652 |
Forex loss | 163,632 | 95,540 | 94,169 | 69,463 |
Loss from remeasurement of contingent liabilities at fair value | 998 | 929 | 507 | 492 |
Interest expense | 152,625 | 141,889 | 75,518 | 77,107 |
Interest income | (31,780) | (53,575) | (14,975) | (16,805) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 2,773 | 22,288 | 3,391 | (618) |
Amount attributable to non-controlling interests | 9,308 | 28,180 | 15,570 | (6,263) |
Income taxes | 1,729 | 69,959 | (20,,822) | 22,551 |
Adjusted EBITDA | 250,991 | 684,717 | 126,950 | 124,042 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net (loss) / income | (232,895) | 426,602 | (15,406) | (109,951) |
Add: | ||||
Depreciation, depletion and amortization | 255,845 | 243,580 | 86,650 | 83,543 |
Forex loss / (gain) | 118,435 | 1,755 | (45,197) | 94,169 |
Loss from remeasurement of contingent liabilities at fair value | 1,521 | 1,413 | 522 | 507 |
Interest expense | 282,928 | 206,731 | 130,303 | 75,518 |
Interest income | (42,002) | (82,467) | (10,222) | (14,975) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 2,424 | 21,875 | (350) | 3,391 |
Amount attributable to non-controlling interests | 17,075 | 38,574 | 7,767 | 15,570 |
Income taxes | (4,590) | 131,910 | (6,319) | (20,822) |
Adjusted EBITDA | 398,741 | 989,973 | 147,750 | 126,950 |
Adjusted Net income/loss can be reconciled as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net (loss) / income | (217,489) | 212,564 | (109,951) | (107,538) |
Provision for amounts due from related parties | -- | 20,706 | -- | -- |
Adjusted net income /(loss) | (217,489) | 233,270 | (109,951) | (107,538) |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net (loss) / income | (232,895) | 426,602 | (15,406) | (109,951) |
Provision for amounts due from related parties | -- | 22,680 | -- | -- |
Adjusted net income / (loss) | (232,895) | 449,281 | (15,406) | (109,951), |
Adjusted EBITDA margin can be reconciled as a percentage to our Revenues as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Revenue (including intersegment sales) | 1,729,005 | 2,242,884 | 823,310 | 905,695 |
Adjusted EBITDA | 250,991 | 684,717 | 126,950 | 124,042 |
Adjusted EBITDA, margin | 14.52% | 30.53% | 15.42% | 13.70% |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Revenue (including intersegment sales) | 2,534,039 | 3,192,344 | 805,034 | 823,310 |
Adjusted EBITDA | 398,741 | 989,973 | 147,750 | 126,950 |
Adjusted EBITDA, margin | 15.74% | 31.01% | 18.35% | 15.42% |
Steel Segment | ||||
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (993,798) | (657,734) | (789,644) | (204,153) |
Add: | ||||
Depreciation, depletion and amortization | 68,624 | 72,369 | 34,339 | 34,285 |
Forex loss | 41,910 | 23,609 | 31,387 | 10,523 |
Interest expense | 184,965 | 180,720 | 88,316 | 96,649 |
Interest income | (5,102) | (5,894) | (1,462) | (3,640) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 594,433 | 518,719 | 599,540 | (5,107) |
Result of disposed companies (incl. the result from their disposal) | 99,328 | 45,920 | (920) | 100,248 |
Loss from discontinued operations, net of income tax | 181,153 | 36,620 | 167,418 | 13,734 |
Amount attributable to non-controlling interests | (13,211) | (22,692) | (11,433) | (1,778) |
Income taxes | (31,786) | 1,392 | (53,486) | 21,700 |
Adjusted EBITDA | 126,516 | 193,029 | 64,055 | 62,461 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (1,087,912) | (769,756) | (94,114) | (789,644) |
Add: | ||||
Depreciation, depletion and amortization | 101,949 | 105,409 | 33,326 | 34,339 |
Forex loss / (gain) | 32,238 | (23,462) | (9,672) | 31,387 |
Interest expense | 265,986 | 276,249 | 81,021 | 88,316 |
Interest income | (7,980) | (5,697) | (2,878) | (1,462) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 630,676 | 595,432 | 36,242 | 599,540 |
Result of disposed companies (incl. the result from their disposal) | 101,351 | 58,695 | 2,023 | (920) |
Loss from discontinued operations, net of income tax | 185,763 | 43,602 | 4,610 | 167,418 |
Amount attributable to non-controlling interests | (14,440) | (14,222) | (1,229) | (11,433) |
Income taxes | (32,593) | 15,067 | (806) | (53,486) |
Adjusted EBITDA | 175,038 | 281,317 | 48,522 | 64,055 |
Adjusted Net income / (loss) can be reconciled as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (993,798) | (657,734) | (789,644) | (204,153) |
Impairment of long-lived assets and goodwill and provision for amounts due from related parties | 594,112 | 518,506 | 598,510 | (4,397) |
Loss from discontinued operation | 210,904 | 39,436 | 195,876 | 15,028 |
Result from companies' disposal | 99,328 | 45,920 | (920) | 100,248 |
Effect on noncontrolling interests | (11,135) | (11,910) | (11,135) | -- |
Effect on income tax | (69,880) | (2,818) | (68,586) | (1,293) |
Adjusted net income | (170,469) | (68,599) | (75,901) | (94,568) |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (1,087,912) | (769,756) | (94,114) | (789,644) |
Impairment of long-lived assets and goodwill and provision for amounts due from related parties | 629,392 | 593,755 | 35,280 | 598,510 |
Loss from discontinued operation | 215,529 | 47,342 | 4,626 | 195,876 |
Result from companies' disposal | 101,364 | 58,695 | 2,036 | (920) |
Effect on noncontrolling interests | (10,929) | (15,320) | 206 | (11,135) |
Effect on income tax | (69,450) | (18,734) | 430 | (68,586) |
Adjusted net loss | (222,006) | (104,019) | (51,537) | (75,901) |
Adjusted EBITDA margin can be reconciled as a percentage to our Revenues as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Revenue (including intersegment sales) | 2,821,468 | 3,466,287 | 1,408,827 | 1,412,641 |
Adjusted EBITDA | 126,516 | 193,029 | 64,055 | 62,461 |
Adjusted EBITDA, margin | 4.48% | 5.57% | 4.55% | 4.42% |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Revenue (including intersegment sales) | 4,096,616 | 5,121,159 | 1,275,148 | 1,408,827 |
Adjusted EBITDA | 175,038 | 281,317 | 48,522 | 64,055 |
Adjusted EBITDA, margin | 4.27% | 5.49% | 3.81% | 4.55% |
Ferroalloys Segment | ||||
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net (loss) / income | (891,083) | (110,308) | (881,481) | (9,602) |
Add: | ||||
Depreciation, depletion and amortization | 3,636 | 3,208 | 1,787 | 1,849 |
Forex loss / (gain) | (396) | (434) | (210) | (186) |
Interest expense | 6,655 | 6,434 | 3,450 | 3,205 |
Interest income | (254) | (267) | (249) | (5) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 4 | 561 | 4 | -- |
Result of disposed companies (incl. the result from their disposal) | 13 | -- | -- | 14 |
Loss from discontinued operations, net of income tax | 885,790 | 120,201 | 881,037 | 4,751 |
Amount attributable to non-controlling interests | (1,352) | (18,128) | (523) | (828) |
Income taxes | 2,247 | 2,527 | 891 | 1,356 |
Adjusted EBITDA | 5,260 | 3,794 | 4,706 | 554 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net (loss) / income | (887,996) | (136,912) | 3,086 | (881,481) |
Add: | ||||
Depreciation, depletion and amortization | 5,403 | 4,045 | 1,767 | 1,787 |
Forex loss / (gain) | 213 | 2,410 | 609 | (210) |
Interest expense | 9,711 | 9,263 | 3,057 | 3,450 |
Interest income | (379) | (42) | (125) | (249) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 1 | 1,931 | (3) | 4 |
Result of disposed companies (incl. the result from their disposal) | 13 | -- | -- | -- |
Loss from discontinued operations, net of income tax | 879,898 | 142,248 | (5,891) | 881,037 |
Amount attributable to non-controlling interests | (1,436) | (19,159) | (84) | (523) |
Income taxes | 2,671 | 4,256 | 423 | 891 |
Adjusted EBITDA | 8,099 | 8,040 | 2,839 | 4,706 |
Adjusted Net income / (loss) can be reconciled as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (891,083) | (110,308) | (881,481) | (9,602) |
Loss from discontinued operation | 1,102,303 | 126,742 | 1,098,790 | 3,513 |
Result from companies'disposal | 13 | -- | -- | 14 |
Effect on noncontrolling interests | (1,352) | (20,942) | (1,352) | -- |
Effect on income tax | (216,514) | (6,543) | (217,753) | 1,239 |
Adjusted net loss | (6,632) | (11,050) | (1,796) | (4,837) |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (887,996) | (136,912) | 3,086 | (881,481) |
Impairment of long-lived assets and goodwill and provision for amounts due from related parties | -- | 1,227 | -- | -- |
Loss from discontinued operation | 1,095,342 | 152,186 | (6,961) | 1,098,790 |
Result from companies'disposal | 13 | -- | -- | -- |
Effect on noncontrolling interests | (1,436) | (19,159) | (84) | (1,352) |
Effect on income tax | (215,444) | (14,721) | 1,070 | (217,723) |
Adjusted net loss | (9,521) | (17,380) | ,(2,889) | (1,796) |
Adjusted EBITDA margin can be reconciled as a percentage to our Revenues as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Revenue (including intersegment sales) | 62,391 | 47,575 | 32,067 | 30,325 |
Adjusted EBITDA | 5,260 | 3,794 | 4,706 | 554 |
Adjusted EBITDA, margin | 8.43% | 7.97% | 14.84% | 1.83% |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Revenue (including intersegment sales) | 90,760 | 77,594 | 28,369 | 32,067 |
Adjusted EBITDA | 8,099 | 8,040 | 2,839 | 4,706 |
Adjusted EBITDA, margin | 8.92% | 10.36% | 10.01% | 14.68% |
Power Segment | ||||
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (21,295) | (85,597) | (21,133) | (163) |
Add: | ||||
Depreciation, depletion and amortization | 5,028 | 5,501 | 2,388 | 2,640 |
Forex gain | (351) | (13) | (209) | (142) |
Interest expense | 21,390 | 10,908 | 11,236 | 10,154 |
Interest income | (35) | (15) | (14) | (22) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 354 | (1,474) | 426 | (73) |
Loss from discontinued operation, net of income tax | 14,283 | 97,324 | 7,061 | 7,222 |
Amount attributable to non-controlling interests | 1,347 | 1,968 | 596 | 751 |
Income taxes | 5,589 | 3,457 | 2,735 | 2,853 |
Adjusted EBITDA | 26,309 | 32,059 | 3,087 | 23,222 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (41,776) | (110,796) | (20,480) | (21,133) |
Add: | ||||
Depreciation, depletion and amortization | 7,219 | 7,971 | 2,191 | 2,388 |
Forex (gain) / loss | (4) | (12) | 347 | (209) |
Interest expense | 31,288 | 16,074 | 9,898 | 11,236 |
Interest income | (50) | (15) | (15) | (14) |
Net result on the disposal of non-current assets, impairment of long-lived assets and goodwill and provision for amounts due from related parties | 1,002 | (1,455) | 649 | 426 |
Loss from discontinued operation, net of income tax | 19,270 | 110,848 | 4,987 | 7,061 |
Amount attributable to non-controlling interests | 1,732 | 1,866 | 384 | 596 |
Income taxes | 3,869 | 2,006 | (1,720) | 2,735 |
Adjusted EBITDA | 22,950 | 26,486 | (3,759) | 3,087 |
Adjusted Net income/(loss) can be reconciled as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Net loss | (21,295) | (85,597) | (21,133) | (163) |
Loss from discontinued operation | 14,492 | 98,167 | 7,168 | 7,324 |
Effect on income tax | (209) | (843) | (107) | (101) |
Adjusted net (loss) / income | (7,012) | 11,727 | (14,072) | 7,060 |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Net loss | (41,776) | (110,796) | (20,480) | (21,133) |
Loss from discontinued operation | 19,479 | 111,716 | 4,987 | 7,168 |
Effect on income tax | (209) | (868) | -- | (107) |
Adjusted net (loss) / income | (22,506) | 52 | (15,494) | (14,072) |
Adjusted EBITDA margin can be reconciled as a percentage to our Revenues as follows:
US$ thousand | 1H 2013 | 1H 2012 | 2Q'13 | 1Q'13 |
Revenue (including intersegment sales) | 619,293 | 609,790 | 269,665 | 349,629 |
Adjusted EBITDA | 26,309 | 32,059 | 3,087 | 23,222 |
Adjusted EBITDA, margin | 4.25% | 5.26% | 1.14% | 6.64% |
US$ thousand | 9M 2013 | 9M 2012 | 3Q'13 | 2Q'13 |
Revenue (including intersegment sales) | 866,163 | 847,512 | 246,870 | 269,665 |
Adjusted EBITDA | 22,550 | 26,486 | (3,759) | 3,087 |
Adjusted EBITDA, margin | 2.60% | 3.13% | -1.52% | 1.14% |
Consolidated Balance Sheets | ||
(in thousands of U.S. dollars, except share amounts) | ||
June 30, 2013 | December 31, 2012 | |
(unaudited) | (unaudited) | |
ASSETS | ||
Cash and cash equivalents | $97,110 | $293,569 |
Accounts receivable, net of allowance for doubtful accounts of $81,699 as of June 30, 2013 and $72,614 as of December 31, 2012 | 744,727 | 700,525 |
Due from related parties, net of allowance of $1,505,250 as of June 30, 2013 and $919,113 as of December 31, 2012 | 86,729 | 420,462 |
Inventories | 1,627,315 | 1,999,936 |
Deferred income taxes | 39,416 | 28,253 |
Current assets of discontinued operations | 747,320 | 2,110,897 |
Prepayments and other current assets | 348,583 | 482,107 |
Total current assets | 3,691,200 | 6,035,749 |
Long-term investments in related parties | 166,965 | 7,853 |
Other long-term investments | 12,320 | 14,484 |
Property, plant and equipment, net | 6,816,161 | 7,178,366 |
Mineral licenses, net | 3,312,295 | 3,455,120 |
Other non-current assets | 154,083 | 165,836 |
Deferred income taxes | 47,271 | 55,080 |
Goodwill | 726,264 | 782,815 |
Total assets | $14,926,559 | $17,695,303 |
LIABILITIES AND EQUITY | ||
Short-term borrowings and current portion of long-term debt | $1,767,086 | $1,436,232 |
Accounts payable and accrued expenses: | ||
Trade payable to vendors of goods and services | 951,668 | 1,005,532 |
Advances received | 97,678 | 122,824 |
Accrued expenses and other current liabilities | 453,452 | 331,281 |
Taxes and social charges payable | 254,133 | 305,912 |
Unrecognized income tax benefits | 47,266 | 20,202 |
Due to related parties | 157,593 | 191,505 |
Asset retirement obligation, current portion | 4,805 | 4,928 |
Deferred income taxes | 7,966 | 38,485 |
Current liabilities of discontinued operations | 214,940 | 476,536 |
Pension obligations, current portion | 17,175 | 19,155 |
Dividends payable | 11,159 | 3,086 |
Finance lease liabilities, current portion | 129,299 | 132,071 |
Total current liabilities | 4,114,220 | $4,087,749 |
Long-term debt, net of current portion | 7,376,204 | 7,921,655 |
Asset retirement obligations, net of current portion | 41,376 | 43,792 |
Pension obligations, net of current portion | 156,517 | 166,831 |
Deferred income taxes | 1,130,835 | 1,218,945 |
Finance lease liabilities, net of current portion | 291,669 | 347,700 |
Other long-term liabilities | 390,581 | 368,974 |
EQUITY | ||
Common shares (10 Russian rubles par value; 497,969,086 shares authorized, 416,270,745 shares issued and outstanding as of June 30, 2013 and December 31, 2012) | 133,507 | 133,507 |
Preferred shares (10 Russian rubles par value; 138,756,915 shares authorized, 83,254,149 shares issued and outstanding as of June 30, 2013 and December 31, 2012) | 25,314 | 25,314 |
Additional paid-in capital | 845,834 | 845,215 |
Accumulated other comprehensive loss | (315,527) | (326,933) |
Retained earnings | 380,273 | 2,500,278 |
Equity attributable to shareholders of Mechel OAO | 1,069,401 | 3,177,381 |
Noncontrolling interests | 355,756 | 362,276 |
Total equity | 1,425,157 | 3,539,657 |
Total liabilities and equity | $14,926,559 | $17,695,303 |
Consolidated Statements of Operations and Comprehensive Income (Loss) | ||
(in thousands of U.S. dollars) | 6 months ended June 30, | |
2013 | 2012 | |
(unaudited) | (unaudited) | |
Revenue, net (including related party amounts of $158,012 and $327,130 during 6 months 2013 and 2012, respectively) | $4,602,958 | $5,669,813 |
Cost of goods sold (including related party amounts of $354,763 and $475,111 during 6 months 2013 and 2012, respectively) | (3,202,516) | (3,764,595) |
Gross profit | 1,400,442 | 1,905,218 |
Selling, distribution and operating expenses: | ||
Selling and distribution expenses | (900,581) | (913,192) |
Taxes other than income tax | (56,716) | (52,194) |
Accretion expense | (2,553) | (2,215) |
Loss on write-off of property, plant and equipment | (2,722) | (1,540) |
Impairment of goodwill and long-lived assets | (0) | (316,372) |
Provision for amounts due from related parties | (594,112) | (222,839) |
Provision for doubtful accounts | (8,700) | (15,983) |
General, administrative and other operating expenses, net | (266,923) | (287,107) |
Total selling, distribution and operating expenses, net | (1,832,307) | (1,811,442) |
Operating (loss) income | (431,865) | 93,776 |
Other income and (expense): | ||
Income from equity investments | 2,459 | 467 |
Interest income | 6,092 | 36,537 |
Interest expense | (334,555) | (316,739) |
Foreign exchange loss | (204,794) | (118,702) |
Other (expenses) income, net | (102,121) | 20,464 |
Total other expense and income, net | (632,919) | (377,973) |
Loss from continuing operations, before income tax and discontinued operations | (1,064,784) | (284,197) |
Income tax benefit (expense) | 22,222 | (77,336) |
Loss from continuing operations | (1,042,562) | (361,533) |
Net loss from discontinued operations, net of income tax | (1,081,224) | (254,143) |
Net loss | (2,123,786) | (615,676) |
Less: Net loss attributable to noncontrolling interests | 3,908 | 10,672 |
Net loss attributable to shareholders of Mechel OAO | $(2,119,878) | $(605,004) |
Less: Dividends on preferred shares | (127) | (79,056) |
Net loss attributable to common shareholders of Mechel OAO | (2,120,005) | (684,060) |
Net loss | (2,123,786) | (615,676) |
Currency translation adjustment | (84,252) | (23,668) |
Change of currency translation adjustment due to disposal of subsidiaries | 68,952 | -- |
Change in pension benefit obligation | (3,374) | (1,775) |
Adjustment of available-for-sale securities | (732) | (132) |
Comprehensive loss | $(2,143,192) | $(641,251) |
Comprehensive loss income attributable to noncontrolling interests | 34,720 | 16,980 |
Comprehensive loss attributable to shareholders of Mechel OAO | (2,108,472) | (624,271) |
Consolidated Statements of Cash Flows | ||
(in thousands of U.S. dollars) | 6months ended June 30, | |
2013 | 2012 | |
(unaudited) | (unaudited) | |
Cash Flows from Operating Activities | ||
Net loss from continuing operations attributable to shareholders of Mechel OAO | (1,038,654) | (350,861) |
Net loss from continuing operations attributable to noncontrolling interests | (3,908) | (10,672) |
Net loss from continuing operations | $(1,042,562) | $(361,533) |
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities: | ||
Depreciation | 202,538 | 196,731 |
Depletion and amortization | 43,945 | 51,288 |
Foreign exchange loss | 204,794 | 118,702 |
Deferred income taxes | (87,743) | (67,114) |
Provision for doubtful accounts | 8,700 | 15,983 |
Change in inventory reserves | 15,777 | 10,341 |
Accretion expense | 2,553 | 2,215 |
Change in asset retirement obligations | -- | (1,669) |
Loss on write-off of property, plant and equipment | 2,722 | 1,540 |
Impairment of goodwill and long-lived assets | -- | 316,372 |
Рrovision for amounts due from related parties | 594,112 | 222,839 |
Income from equity investments | (2,459) | (467) |
Non-cash interest on pension liabilities | 4,985 | 5,060 |
Loss (Gain) on sale of property, plant and equipment | 1,128 | (609) |
Gain on accounts payable with expired legal term | (251) | (584) |
Loss on disposal of subsidiaries | 90,312 | -- |
Amortization of loan origination fee | 28,677 | 21,208 |
Loss resulting from accretion and remeasurement of contingent obligation | 998 | 929 |
Pension service cost, amortization of prior service cost and actuarial (gain) loss, other expenses | 2,718 | 1,513 |
Changes in working capital items, net of effects from acquisition of new subsidiaries: | ||
Accounts receivable | (108,493) | (36,575) |
Inventories | 213,433 | 422,706 |
Trade payable to vendors of goods and services | 90,719 | (15,083) |
Advances received | (19,466) | (39,548) |
Accrued taxes and other liabilities | 48,313 | 48,211 |
Settlements with related parties | (302,871) | (287,969) |
Other current assets | 32,191 | 21,228 |
Net operating cash flows of discontinued operations | 38,587 | 3,440 |
Unrecognized income tax benefits | 27,620 | 75 |
Net cash provided by operating activities | 90,977 | 649,230 |
Cash Flows from Investing Activities | ||
Acquisition of DEMP, less cash acquired | (21,199) | (16,405) |
Acquisition of Port Vanino | (518,823) | -- |
Disposal of Port Vanino | 500,058 | -- |
Short-term loans issued and other investments | (1,102) | (1,032) |
Proceeds from short-term loans issued | 6,202 | 1,572 |
Proceeds from disposals of property, plant and equipment | 4,332 | 9,887 |
Purchases of mineral licenses | (903) | (1,061) |
Net investing cash flows of discontinued operations | (6,992) | (12,210) |
Purchases of property, plant and equipment | (352,641) | (559,721) |
Net cash used in investing activities | (391,068) | (578,970) |
Cash Flows from Financing Activities | ||
Proceeds from borrowings | 2,035,532 | 2,104,131 |
Repayment of borrowings | (1,841,885) | (2,567,203) |
Dividends paid | (110) | -- |
Dividends paid to noncontrolling interest | (422) | -- |
Acquisition of noncontrolling interest in subsidiaries | (33) | (33) |
Repayment of obligations under finance lease | (71,564) | (59,682) |
Sale leaseback proceeds | 35,890 | -- |
Net investing cash flows of discontinued operations | (16,356) | (18,745) |
Net cash provided by (used in) financing activities | 141,052 | (541,532) |
Effect of exchange rate changes on cash and cash equivalents | (21,663) | (21,348) |
Net decrease in cash and cash equivalents | (180,702) | (492,620) |
Cash and cash equivalents at beginning of period | 297,993 | 643,379 |
Cash and cash equivalents at end of period | $117,291 | $150,759 |
Consolidated Balance Sheets | ||
(in thousands of U.S. dollars, except share amounts) | ||
September 30, 2013 | December 31, 2012 | |
(unaudited) | (unaudited) | |
ASSETS | ||
Cash and cash equivalents | $104,297 | $293,569 |
Accounts receivable, net of allowance for doubtful accounts of $82,002 as of September 30, 2013 and $72,614 as of December 31, 2012 | 676,852 | 700,525 |
Due from related parties, net of allowance of $651,948 as of September 30, 2013 and $919,113 as of December 31, 2012 | 98,565 | 420,462 |
Inventories | 1,481,292 | 1,999,936 |
Deferred income taxes | 33,989 | 28,253 |
Current assets of discontinued operations | 606,708 | 2,110,897 |
Prepayments and other current assets | 327,146 | 482,107 |
Total current assets | 3,328,849 | 6,035,749 |
Long-term investments in related parties | 169,740 | 7,853 |
Other long-term investments | 12,503 | 14,484 |
Property, plant and equipment, net | 6,873,809 | 7,178,366 |
Mineral licenses, net | 3,306,474 | 3,455,120 |
Other non-current assets | 140,908 | 165,836 |
Deferred income taxes | 51,817 | 55,080 |
Goodwill | 734,474 | 782,815 |
Total assets | $14,618,574 | $17,695,303 |
LIABILITIES AND EQUITY | ||
Short-term borrowings and current portion of long-term debt | $1,938,075 | $1,436,232 |
Accounts payable and accrued expenses: | ||
Trade payable to vendors of goods and services | 906,557 | 1,005,532 |
Advances received | 80,093 | 122,824 |
Accrued expenses and other current liabilities | 518,789 | 331,281 |
Taxes and social charges payable | 259,118 | 305,912 |
Unrecognized income tax benefits | 51,136 | 20,202 |
Due to related parties | 126,602 | 191,505 |
Asset retirement obligation, current portion | 4,713 | 4,928 |
Deferred income taxes | 28,630 | 38,485 |
Current liabilities of discontinued operations | 137,790 | 476,536 |
Pension obligations, current portion | 17,348 | 19,155 |
Dividends payable | 9,850 | 3,086 |
Finance lease liabilities, current portion | 130,988 | 132,071 |
Total current liabilities | 4,209,689 | $4,087,749 |
Long-term debt, net of current portion | 7,194,319 | 7,921,655 |
Asset retirement obligations, net of current portion | 41,907 | 43,792 |
Pension obligations, net of current portion | 158,055 | 166,831 |
Deferred income taxes | 1,096,150 | 1,218,945 |
Finance lease liabilities, net of current portion | 277,837 | 347,700 |
Other long-term liabilities | 347,080 | 368,974 |
Due to related parties | 21 | -- |
EQUITY | ||
Common shares (10 Russian rubles par value; 497,969,086 shares authorized, 416,270,745 shares issued and outstanding as of September 30, 2013 and December 31, 2012) | 133,507 | 133,507 |
Preferred shares (10 Russian rubles par value; 138,756,915 shares authorized, 83,254,149 shares issued and outstanding as of September 30, 2013 and December 31, 2012) | 25,314 | 25,314 |
Additional paid-in capital | 845,988 | 845,215 |
-- | -- | |
Accumulated other comprehensive loss | 330,708 | 326,933 |
Retained earnings | 253,586 | 2,500,278 |
Equity attributable to shareholders of Mechel OAO | 927,687 | 3,177,381 |
Noncontrolling interests | 365,829 | 362,276 |
Total equity | 1,293,516 | 3,539,657 |
Total liabilities and equity | $14,618,574 | $17,695,303 |
Consolidated Statements of Operations and Comprehensive Income (Loss) | ||
(in thousands of U.S. dollars) | 9 months ended September 30, | |
2013 | 2012 | |
(unaudited) | (unaudited) | |
Revenue, net (including related party amounts of $126,031 and $546,096 during 9 months 2013 and 2012, respectively) | $6,691,925 | $8,222,021 |
Cost of goods sold (including related party amounts of $509,377 and $696,781 during 9 months 2013 and 2012, respectively) | (4,647,629) | (5,574,178) |
Gross profit | 2,044,296 | 2,647,843 |
Selling, distribution and operating expenses: | ||
Selling and distribution expenses | (1,309,254) | (1,278,177) |
Taxes other than income tax | (89,430) | (71,652) |
Accretion expense | (3,764) | (3,277) |
Loss on write-off of property, plant and equipment | (5,270) | (3,846) |
Impairment of goodwill and long-lived assets | 0 | (317,599) |
Provision for amounts due from related parties | (629,392) | (300,062) |
Provision for doubtful accounts | (15,737) | (9,846) |
General, administrative and other operating expenses, net | (384,660) | (405,526) |
Total selling, distribution and operating expenses, net | (2,437,507) | (2,389,985) |
Operating (loss) income | (393,211) | 257,858 |
Other income and (expense): | ||
Income from equity investments | 3,683 | 405 |
Interest income | 6,950 | 52,407 |
Interest expense | (546,452) | (472,501) |
Foreign exchange (loss) gain | (150,881) | 19,309 |
Other (expenses) income, net | (109,436) | 49,425 |
Total other income and expense, net | (796,136) | (350,955) |
Loss from continuing operations, before income tax and discontinued operations | (1,189,347) | (93,097) |
Income tax benefit (expense) | 30,643 | (153,239) |
Loss from continuing operations | (1,158,704) | (246,336) |
Net loss from discontinued operations, net of income tax | (1,084,931) | (296,700) |
Net loss | (2,243,635) | (543,036) |
Less: Net loss attributable to noncontrolling interests | (2,931) | (7,058) |
Net loss attributable to shareholders of Mechel OAO | $(2,246,566) | $(550,094) |
Less: Dividends on preferred shares | (126) | (79,056) |
Net loss attributable to common shareholders of Mechel OAO | (2,246,692) | (629,150) |
Net loss | (2,243,635) | (543,036) |
Currency translation adjustment | (95,790) | 84,565 |
Change of currency translation adjustment due to disposal of subsidiaries | 68,951 | -- |
Change in pension benefit obligation | (2,659) | (775) |
Adjustment of available-for-sale securities | (836) | (75) |
Comprehensive loss | $(2,273,969) | $(459,321) |
Comprehensive loss attributable to noncontrolling interests | 23,628 | (17,292) |
Comprehensive loss attributable to shareholders of Mechel OAO | (2,250,341) | (476,613) |
Consolidated Statements of Cash Flows | ||
(in thousands of U.S. dollars) | 9 months ended September 30, | |
2013 | 2012 | |
(unaudited) | (unaudited) | |
Cash Flows from Operating Activities | ||
Net loss from continuing operations attributable to shareholders of Mechel OAO | (1,161,635) | (253,395) |
Net income from continuing operations attributable to noncontrolling interests | 2,931 | 7,059 |
Net loss from continuing operations | $(1,158,704) | $(246,336) |
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities: | ||
Depreciation | 305,418 | 288,816 |
Depletion and amortization | 64,999 | 72,190 |
Foreign exchange loss (gain) | 150,881 | (19,309) |
Deferred income taxes | (115,836) | (56,522) |
Provision for doubtful accounts | 15,735 | 9,846 |
Change in inventory reserves | (6,483) | 18,330 |
Accretion expense | 3,764 | 3,277 |
Loss on write-off of property, plant and equipment | 5,270 | 3,271 |
Impairment of goodwill and long-lived assets | -- | 317,599 |
Рrovision for amounts due from related parties | 629,392 | 300,062 |
Income from equity investments | (3,683) | (405) |
Non-cash interest on pension liabilities | 7,366 | 7,505 |
(Gain) loss on sale of property, plant and equipment | (243) | 1,420 |
Gain on accounts payable with expired legal term | (724) | (19,677) |
Loss on disposal of subsidiaries | 92,335 | -- |
Gain on disposal of discontinued operations | -- | -- |
Amortization of loan origination fee | 42,328 | 34,159 |
Loss resulting from accretion and remeasurement of contingent obligation | 1,521 | 1,413 |
Pension service cost, amortization of prior service cost and actuarial (gain) loss, other expenses | 3,696 | 2,285 |
Changes in working capital items, net of effects from acquisition of new subsidiaries: | ||
Accounts receivable | (23,378) | 8,256 |
Inventories | 407,237 | 438,334 |
Trade payable to vendors of goods and services | 40,719 | (16,380) |
Advances received | (37,663) | (29,604) |
Accrued taxes and other liabilities | 115,742 | 46,606 |
Settlements with related parties | (376,784) | (145,320) |
Other current assets | 62,488 | 103,112 |
Net operation cash flows of discontinued operations | 55,763 | (55,856) |
Unrecognized income tax benefits | 32,787 | 115 |
Net cash provided by operating activities | 313,943 | 1,067,187 |
Cash Flows from Investing Activities | ||
Acquisition of DEMP, less cash acquired | (43,548) | (24,652) |
Acquisition of Cognor, less cash acquired | -- | (24,172) |
Acquisition of Port Vanino | (518,823) | -- |
Disposal of Port Vanino | 500,058 | -- |
Short-term loans issued and other investments | (1,087) | (826) |
Proceeds from disposal of TPP Rousse | 26,684 | -- |
Proceeds from disposal of Lomprom Rostov | 522 | -- |
Proceeds from disposal of Invicta | 714 | -- |
Proceeds from short-term loans issued | 6,465 | 71,284 |
Proceeds from disposals of property, plant and equipment | 4,685 | 18,666 |
Purchases of mineral licenses | (886) | (1,320) |
Purchases of property, plant and equipment | (444,279) | (815,500) |
Net investing cash flows ofdiscontinued operations | (16,296) | (25,900) |
Net cash used in investing activities | (485,791) | (802,420) |
Cash Flows from Financing Activities | ||
Proceeds from borrowings | 2,555,319 | 3,267,217 |
Repayment of borrowings | (2,464,851) | (3,226,969) |
Dividends paid | (320) | (186,443) |
Dividends paid to noncontrolling interest | (1,569) | (8,475) |
Acquisition of noncontrolling interest in subsidiaries | (33) | (32) |
Repayment of obligations under finance lease | (109,026) | (92,722) |
Sale leaseback proceeds | 40,023 | -- |
Net investing cash flows of discontinued operations | (19,530) | (42,403) |
Net cash provided by (used in) financing activities | 13 | (289,827) |
Effect of exchange rate changes on cash and cash equivalents | (18,156) | (33,598) |
Net (decrease) increase in cash and cash equivalents | (189,991) | (58,658) |
Cash and cash equivalents at beginning of period | 297,994 | 643,379 |
Cash and cash equivalents at end of period | $108,003 | $584,721 |
Contact
Mechel OAO
Vladislav Zlenko
Director of Investor Relations
Phone: 7-495-221-88-88
Fax: 7-495-221-88-00
vladislav.zlenko@mechel.com