Revenue amounted
to 253,141 million
rublesConsolidated
EBITDA(a)* amounted
to 45,730 million
rublesNet loss attributable to shareholders of
Mechel PAO amounted to
115,163 million rubles
Mechel PAO (MICEX:MTLR) (NYSE:MTL)
, a
leading Russian mining and steel group, announces financial results
for the full year 2015.
In accordance with legislation of the Russian
Federation, starting from financial results for the year 2015 the
Company will be reporting its financial statements in accordance
with International Financial Reporting Standards (IFRS).
Presentation currency will be Russian ruble.
Mechel PAO’s Chief Executive Officer Oleg
Korzhov commented on the 2015 results:
“2015 was a complicated year for our company,
but nevertheless a vital one. Our key event was reaching agreement
in principle with the majority of our lenders on restructuring our
debt. Even though not all official documents were signed in 2015,
our main efforts and talks on restructuring conditions were made in
that period. As of now, the company has announced signing deals
with major lender banks as well as reaching an agreement with
Gazprombank with the bank acquiring a share in the Elga project. So
we may consider that the restructuring’s pivot point has been
passed.
In 2015, our revenue went up by 4% to reach
253,141 million rubles, with EBITDA up by 54% to reach 45,730
million rubles, as the EBITDA margin reached 18% and adjusted
operating income up by 140% year-on-year. The 115,163 million ruble
net loss was largely due to negative currency rate trends.
Mechel’s operational and financial results
improved to a large extent due to the fact that our key projects
whose implementation had caused our company’s debt growth, are
reaching target capacity utilization levels and increase returns on
invested capital.
At Elga Coal Complex, four million tonnes of
coal were mined last year, with coking coal accounting for
two-thirds of that amount. Five million tonnes are planned to be
mined in 2016. Starting in 2016, we began supplying rails produced
by Chelyabinsk Metallurgical Plant’s universal rolling mill to
Russian Railways, which will enable us to fully utilize the mill’s
potential for producing high-margin products. Rail supplies to
Russian Railways may amount to from 150,000 to 250,000 tonnes this
year, with the mill’s overall output totaling over 500,000 tonnes
of products.
The strengthening of steelmaking commodity and
steel markets which we currently observe enable us to confidently
conduct our operations and sales with a view to the company’s
further development.”
*Please find the calculation of the EBITDA(a)
and other measures used here and hereafter in Attachment A
Consolidated Results For The Full Year
2015
Mln rubles |
FY 2015 |
FY 2014 |
% |
Revenuefrom external customers |
|
253,141 |
|
|
243,992 |
|
|
4 |
% |
Adjusted operating income |
|
29,203 |
|
|
12,147 |
|
|
140 |
% |
EBITDA (a) |
|
45,730 |
|
|
29,759 |
|
|
54 |
% |
EBITDA (a), margin |
|
18 |
% |
|
12 |
% |
|
Net loss attributable to shareholders of Mechel
PAO |
|
(115,163 |
) |
|
(132,704 |
) |
|
-13 |
% |
Adjusted net (loss) / income |
|
(40,165 |
) |
|
(7,609 |
) |
|
428 |
% |
Net debt |
|
506,891 |
|
|
407,240 |
|
|
25 |
% |
Trade working capital |
|
(9,293 |
) |
|
(12,603 |
) |
|
-26 |
% |
|
Mining Segment
Mechel Mining Management OOO’s Chief Executive
Officer Pavel Shtark noted:
“In 2015 the trend in steelmaking commodity
markets was mostly negative. China’s demand for coal imports took a
constant downturn as facilities producing semi-finished steel goods
faced massive closure. Imports were pushed out by local Chinese
producers with the help of measures consistently taken by Chinese
authorities. With this in mind, major Australian producers
persisted in the policy of tough price competition with other
global suppliers for the share in the market. Spot prices for
coking coal plummeted, widening the gap with contract prices. As a
result, the price for coking coal concentrate on the global market
fell by more than 30% from $117 FOB in 1Q2015 to $81 FOB in 1Q2016
— further than it has been for many years.
In these conditions, our mining segment faced
cuts in metallurgical coal sales. The chief decrease was in export
sales, especially to China. At the same time the company increased
coal supplies for internal use, for example, Elga coals replaced
those coals that the Group’s enterprises used to acquire from third
parties. Meanwhile, the growth of ruble denominated prices for coal
offered significant compensation for the decrease in sales due to
ruble devaluation. As a result, the segment’s revenue from sales to
third parties demonstrated positive dynamics, while inter-segment
revenue went up by a third. With operational costs at a stable
level, the segment demonstrated a significant growth of its
operational income and EBITDA, while its EBITDA margin reached
25%.
In the first quarter 2016, we saw some positive
trends on the steel raw materials markets which led to contract
prices reaching $84 per tonne, with spot prices rising higher than
contract prices in April-May — for the first time since mid-2013.
Considering low production costs at our mining assets and the
decrease in transport costs due to ruble devaluation, the company’s
products remain highly competitive both domestically and
internationally, which will enable us to further demonstrate stable
financial results.”
Mln rubles |
FY 2015 |
FY 2014 |
% |
Revenue from external customers |
|
80,632 |
|
|
79,509 |
|
|
1 |
% |
Revenueintersegment |
|
28,091 |
|
|
21,049 |
|
|
33 |
% |
EBITDA(a) |
|
26,831 |
|
|
13,359 |
|
|
101 |
% |
EBITDA (a), margin
(4) |
|
25 |
% |
|
13 |
% |
|
|
Steel Segment
Mechel-Steel Management Company OOO’s Chief
Executive Officer Andrey Ponomarev noted:
“Throughout practically all of last year, we had
to cope with weakened demand for steel products in the construction
industry which is crucial for the segment’s sales structure.
Russian long steel market in 2015 went down by 14% due to the
decrease in construction volumes as the overall economic situation
worsened, with effective demand going down and the state and
business investment activity slowing down. Despite a significant
decrease in visible consumption of construction-grade long steel in
Russia, we maintained the volume of domestic sales at the level of
the previous year, increasing our share at this strategically
important market. We also optimized our sales portfolio for other
types of long steel products, minimizing manufacture of low
value-added products. We even managed to increase sales of some
types of products, such as flat steel. Nevertheless, overall sales
decreased tonnage-wise year-on-year. At the same time, ruble
devaluation had a positive impact on domestic prices, which was the
major cause of the growth of the segment’s revenue. Due to our
efforts on optimizing our product range by increasing the share of
high value-added products and cost control, the segment
demonstrated a growth of operating income and EBITDA.
The increase of high value-added products’ share
in our sales structure was largely thanks to the capacity
utilization growth of the universal rolling mill. In 2015 the mill
produced 175,000 tonnes and is due to more than double that volume
this year. We consider Russian beam and rail markets to be among
the most promising markets for the steel segment due to limited
supply from domestic producers. Thus the mill’s contribution to the
segment’s financial results will be more and more tangible each
year.”
Mln rubles |
FY 2015 |
FY 2014 |
% |
Revenue from external customers |
|
146,032 |
|
|
138,660 |
|
|
5 |
% |
Revenueintersegment |
|
6,972 |
|
|
8,207 |
|
|
-15 |
% |
EBITDA(a) |
|
17,127 |
|
|
14,906 |
|
|
15 |
% |
EBITDA(a), margin |
|
11 |
% |
|
10 |
% |
|
|
Power Segment
Mechel-Energo OOO’s Chief Executive Officer Pyotr Pashnin
noted:
“Last year, our segment demonstrated, as usual, stable
operational profit. Electricity generation and sales topped those
of the previous year, while heat production and sales saw a
moderate decrease primarily due to climatic factors. As a result,
we demonstrated a small increase in revenue from sales to third
parties, while our EBITDA(a) went up by nearly half.”
Mln. rubles |
FY 2015 |
FY 2014 |
% |
Revenue from external customers |
|
26,477 |
|
|
25,823 |
|
|
3 |
% |
Revenueintersegment |
|
14,990 |
|
|
13,731 |
|
|
9 |
% |
EBITDA(a) |
|
2,090 |
|
|
1,403 |
|
|
49 |
% |
EBITDA(a), margin
(4) |
|
5 |
% |
|
3 |
% |
|
|
The management of Mechel will host a conference
call today at 18:00 p.m. Moscow time (4:00 p.m. London time, 11
a.m. New York 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 three segments: mining, steel 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 FY 2015 Earnings Press Release
Attachment A
Non-IFRS financial measures. This press release
includes financial information prepared in accordance with
International Financial Reporting Standards, or IFRS, as well as
other financial measures referred to as non-IFRS. The non-IFRS
financial measures should be considered in addition to, but not as
a substitute for, the information prepared in accordance with
IFRS.
Adjusted EBITDA (EBITDA (a)) represents net income or loss
before Depreciation, depletion and amortization, Foreign exchange
loss (gain), Finance costs, Finance income, Net result on the
disposal of non-current assets, Impairment of goodwill and other
non-current assets, Allowance for doubtful accounts,
Write-offs of inventories to net realisable value, (Profit)
loss after tax for the year from discontinued operations, net, Net
result on the disposal of subsidiaries, Amount attributable to
non-controlling interests, Income taxes, Loss (profit) from pension
obligations, Fines and penalties, Gain from accounts payable
write-off and Other one-off items. 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 IFRS 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 IFRS, these
expenses primarily represent the non-cash current period allocation
of costs associated with non-current 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 Impairment of goodwill and other non-current
assets, Allowance for amounts due from related parties, (Profit)
loss after tax for the year from discontinued operations, net, Net
result on the disposal of subsidiaries, Effect on net profit (loss)
attributable to non-controlling interests, Foreign exchange loss
(gain), Loss (profit) from pension obligations, Fines and
penalties, Gain from accounts payable write-off and Other one-off
items. 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 IFRS 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 goodwill and other non-current assets and allowance
for amounts due from related parties are considered operating costs
under IFRS, 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.
Our calculations of Net debt† and trade
working capital are presented below:
Mln RUB |
|
31.12.2015 |
|
|
31.12.2014 |
|
|
01.01.2014 |
|
Short-term borrowings and
current portion of long-term debt |
|
444,199 |
|
|
371,903 |
|
|
265,026 |
|
Interest payable |
|
27,269 |
|
|
13,093 |
|
|
2,052 |
|
Fines and penalties on
overdue amounts |
|
20,206 |
|
|
1,522 |
|
|
- |
|
Long-term debt |
|
4,308 |
|
|
9,346 |
|
|
25,251 |
|
Derivative instruments |
|
- |
|
|
- |
|
|
823 |
|
less Cash and cash
equivalents |
|
(3,079 |
) |
|
(3,983 |
) |
|
(8,979 |
) |
Net debt, excluding finance lease liabilities |
|
492,903 |
|
|
391,881 |
|
|
284,173 |
|
Finance lease
liabilities, current portion |
|
13,507 |
|
|
15,213 |
|
|
10,809 |
|
Finance lease
liabilities, non-current portion |
|
481 |
|
|
146 |
|
|
2,973 |
|
Net debt |
|
506,891 |
|
|
407,240 |
|
|
297,955 |
|
|
|
|
|
|
|
|
|
Mln RUB |
|
31.12.2015 |
|
|
31.12.2014 |
|
|
01.01.2014 |
|
Trade and other
receivables |
|
15,981 |
|
|
19,808 |
|
|
22,477 |
|
Due from related
parties, net of allowance |
|
96 |
|
|
138 |
|
|
196 |
|
Inventories |
|
35,189 |
|
|
36,337 |
|
|
46,629 |
|
Other current
assets |
|
8,127 |
|
|
8,750 |
|
|
7,225 |
|
Trade current assets |
|
59,393 |
|
|
65,033 |
|
|
76,527 |
|
Trade and other
payables |
|
54,524 |
|
|
61,493 |
|
|
51,973 |
|
Advances received |
|
3,492 |
|
|
4,286 |
|
|
4,290 |
|
Provisions and other
current liabilities |
|
2,558 |
|
|
2,166 |
|
|
1,560 |
|
Taxes and social
charges payable |
|
8,034 |
|
|
9,647 |
|
|
7,440 |
|
Due to related
parties |
|
78 |
|
|
44 |
|
|
1,024 |
|
Trade current liabilities |
|
68,686 |
|
|
77,636 |
|
|
66,287 |
|
|
|
|
|
Trade working capital |
|
(9,293 |
) |
|
(12,603 |
) |
|
10,240 |
|
|
† Calculations of Net debt could differ from indicators
calculated in accordance with loan agreements upon dependence on
definitions in such agreements.
Adjusted EBITDA can be reconciled to our
consolidated statements of operations as follows:
|
Consolidated Results |
|
Mining Segment
** |
|
Steel Segment** |
|
Power Segment** |
Mln RUB |
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
Net loss
attributable to shareholders of Mechel PAO |
|
(115,163 |
) |
|
(132,704 |
) |
|
|
(71,120 |
) |
|
(86,787 |
) |
|
|
(41,438 |
) |
|
(45,356 |
) |
|
|
(2,286 |
) |
|
(651 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
14,085 |
|
|
14,429 |
|
|
|
9,106 |
|
|
8,747 |
|
|
|
4,650 |
|
|
5,391 |
|
|
|
329 |
|
|
291 |
|
Foreign
exchange loss (gain), net |
|
71,106 |
|
|
103,176 |
|
|
|
49,872 |
|
|
70,553 |
|
|
|
21,122 |
|
|
32,910 |
|
|
|
111 |
|
|
(287 |
) |
Finance
costs |
|
60,452 |
|
|
28,110 |
|
|
|
33,880 |
|
|
15,045 |
|
|
|
25,645 |
|
|
12,966 |
|
|
|
2,173 |
|
|
1,208 |
|
Finance
income |
|
(183 |
) |
|
(107 |
) |
|
|
(1,030 |
) |
|
(777 |
) |
|
|
(344 |
) |
|
(390 |
) |
|
|
(55 |
) |
|
(48 |
) |
Net
result on the disposal of non-current assets, impairment of
goodwill and other non-current assets, allowance for doubtful
accounts and write-offs of inventories to net realisable value |
|
4,772 |
|
|
12,710 |
|
|
|
900 |
|
|
1,357 |
|
|
|
2,122 |
|
|
10,658 |
|
|
|
1,751 |
|
|
696 |
|
(Profit)
loss after tax for the year from discontinued operations, net |
|
(932 |
) |
|
11,702 |
|
|
|
(764 |
) |
|
13,141 |
|
|
|
(168 |
) |
|
(1,468 |
) |
|
|
- |
|
|
29 |
|
Net result on the
disposal of subsidiaries |
|
19 |
|
|
89 |
|
|
|
- |
|
|
- |
|
|
|
19 |
|
|
89 |
|
|
|
- |
|
|
- |
|
Amount attributable to non-controlling interests |
|
535 |
|
|
(1,263 |
) |
|
|
(444 |
) |
|
(971 |
) |
|
|
812 |
|
|
(408 |
) |
|
|
166 |
|
|
114 |
|
Income
taxes |
|
8,322 |
|
|
(8,822 |
) |
|
|
5,632 |
|
|
(8,435 |
) |
|
|
2,794 |
|
|
(374 |
) |
|
|
(103 |
) |
|
(13 |
) |
Loss
(profit) from pension obligations |
|
50 |
|
|
(6 |
) |
|
|
125 |
|
|
(5 |
) |
|
|
(81 |
) |
|
(7 |
) |
|
|
6 |
|
|
7 |
|
Fines and
penalties |
|
1,598 |
|
|
915 |
|
|
|
707 |
|
|
755 |
|
|
|
890 |
|
|
189 |
|
|
|
- |
|
|
(29 |
) |
Gain from
accounts payable write-off |
|
(224 |
) |
|
(38 |
) |
|
|
(33 |
) |
|
(2 |
) |
|
|
(190 |
) |
|
(35 |
) |
|
|
(1 |
) |
|
- |
|
Other
one-off items |
|
1,293 |
|
|
1,568 |
|
|
|
- |
|
|
741 |
|
|
|
1,293 |
|
|
742 |
|
|
|
- |
|
|
86 |
|
Adjusted
EBITDA |
|
45,730 |
|
|
29,759 |
|
|
|
26,831 |
|
|
13,359 |
|
|
|
17,127 |
|
|
14,906 |
|
|
|
2,090 |
|
|
1,403 |
|
Adjusted
EBITDA, margin |
|
18 |
% |
|
12 |
% |
|
|
25 |
% |
|
13 |
% |
|
|
11 |
% |
|
10 |
% |
|
|
5 |
% |
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mln RUB |
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
|
12m 2015 |
12m 2014 |
Net loss
attributable to shareholders of Mechel PAO |
|
(115,163 |
) |
|
(132,704 |
) |
|
|
(71,120 |
) |
|
(86,787 |
) |
|
|
(41,438 |
) |
|
(45,356 |
) |
|
|
(2,286 |
) |
|
(651 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill and other non-current assets |
|
1,460 |
|
|
7,996 |
|
|
|
- |
|
|
(19 |
) |
|
|
16 |
|
|
8,015 |
|
|
|
1,444 |
|
|
- |
|
Allowance
for amounts due from related parties |
|
43 |
|
|
126 |
|
|
|
43 |
|
|
126 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
(Profit)
loss after tax for the year from discontinued operations, net |
|
(932 |
) |
|
11,702 |
|
|
|
(764 |
) |
|
13,141 |
|
|
|
(168 |
) |
|
(1,468 |
) |
|
|
- |
|
|
29 |
|
Net result on the
disposal of subsidiaries |
|
19 |
|
|
89 |
|
|
|
- |
|
|
- |
|
|
|
19 |
|
|
89 |
|
|
|
- |
|
|
- |
|
Effect on profit (loss) attributable to non-controlling
interests |
|
585 |
|
|
(433 |
) |
|
|
- |
|
|
- |
|
|
|
560 |
|
|
(433 |
) |
|
|
25 |
|
|
- |
|
Foreign
exchange loss (gain), net |
|
71,106 |
|
|
103,176 |
|
|
|
49,872 |
|
|
70,553 |
|
|
|
21,122 |
|
|
32,910 |
|
|
|
111 |
|
|
(287 |
) |
Loss
(profit) from pension obligations |
|
50 |
|
|
(6 |
) |
|
|
125 |
|
|
(5 |
) |
|
|
(81 |
) |
|
(7 |
) |
|
|
6 |
|
|
7 |
|
Fines and
penalties |
|
1,598 |
|
|
915 |
|
|
|
707 |
|
|
755 |
|
|
|
890 |
|
|
189 |
|
|
|
- |
|
|
(29 |
) |
Gain from
accounts payable write-off |
|
(224 |
) |
|
(38 |
) |
|
|
(33 |
) |
|
(2 |
) |
|
|
(190 |
) |
|
(35 |
) |
|
|
(1 |
) |
|
- |
|
Other
one-off items |
|
1,293 |
|
|
1,568 |
|
|
|
- |
|
|
741 |
|
|
|
1,293 |
|
|
742 |
|
|
|
- |
|
|
85 |
|
Adjusted net
(loss) income, net of income tax |
|
(40,165 |
) |
|
(7,609 |
) |
|
|
(21,170 |
) |
|
(1,498 |
) |
|
|
(17,978 |
) |
|
(5,355 |
) |
|
|
(701 |
) |
|
(846 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit (loss) |
|
24,068 |
|
|
887 |
|
|
|
15,895 |
|
|
1,718 |
|
|
|
8,456 |
|
|
(1,347 |
) |
|
|
35 |
|
|
424 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill and other non-current assets |
|
1,460 |
|
|
7,996 |
|
|
|
- |
|
|
(19 |
) |
|
|
16 |
|
|
8,015 |
|
|
|
1,444 |
|
|
- |
|
Allowance
for amounts due from related parties |
|
43 |
|
|
126 |
|
|
|
43 |
|
|
126 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
- |
|
Loss on
write-off of property, plant and equipment |
|
691 |
|
|
661 |
|
|
|
199 |
|
|
309 |
|
|
|
492 |
|
|
242 |
|
|
|
- |
|
|
110 |
|
Loss
(profit) from pension obligations |
|
50 |
|
|
(6 |
) |
|
|
125 |
|
|
(5 |
) |
|
|
(81 |
) |
|
(7 |
) |
|
|
6 |
|
|
7 |
|
Fines and
penalties |
|
1,598 |
|
|
915 |
|
|
|
707 |
|
|
755 |
|
|
|
890 |
|
|
189 |
|
|
|
- |
|
|
(29 |
) |
Other
one-off items |
|
1,293 |
|
|
1,568 |
|
|
|
- |
|
|
741 |
|
|
|
1,293 |
|
|
742 |
|
|
|
- |
|
|
85 |
|
Adjusted
operating income |
|
29,203 |
|
|
12,147 |
|
|
|
16,969 |
|
|
3,624 |
|
|
|
11,066 |
|
|
7,834 |
|
|
|
1,486 |
|
|
597 |
|
** including
intersegment operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment B
Consolidated statement of financial
position(All amounts are in millions of Russian
rubles)
|
|
December 31, 2015 |
|
December 31, 2014 |
|
January 1, 2014 |
Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
3,079 |
|
|
|
3,983 |
|
|
|
8,979 |
|
Trade and other
receivables |
|
|
15,981 |
|
|
|
19,809 |
|
|
|
22,477 |
|
Due from related
parties, net of allowance |
|
|
96 |
|
|
|
138 |
|
|
|
196 |
|
Inventories |
|
|
35,189 |
|
|
|
36,337 |
|
|
|
46,629 |
|
Income tax
receivables |
|
|
603 |
|
|
|
578 |
|
|
|
2,936 |
|
Other current financial
assets |
|
|
45 |
|
|
|
186 |
|
|
|
360 |
|
Other current
assets |
|
|
8,127 |
|
|
|
8,750 |
|
|
|
7,225 |
|
Total current
assets |
|
|
63,120 |
|
|
|
69,781 |
|
|
|
88,802 |
|
|
|
|
|
|
|
|
Assets of disposal
group classified as held for sale |
|
|
− |
|
|
|
8,696 |
|
|
|
− |
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
Property, plant and
equipment |
|
|
215,844 |
|
|
|
224,299 |
|
|
|
226,253 |
|
Mineral licenses |
|
|
38,517 |
|
|
|
40,122 |
|
|
|
51,727 |
|
Non-current financial
assets |
|
|
194 |
|
|
|
489 |
|
|
|
543 |
|
Investments in
associates |
|
|
284 |
|
|
|
274 |
|
|
|
251 |
|
Deferred tax
assets |
|
|
1,492 |
|
|
|
1,438 |
|
|
|
517 |
|
Goodwill |
|
|
21,378 |
|
|
|
22,697 |
|
|
|
22,520 |
|
Other non-current
assets |
|
|
1,243 |
|
|
|
1,462 |
|
|
|
2,481 |
|
Total
non-current assets |
|
|
278,952 |
|
|
|
290,781 |
|
|
|
304,292 |
|
Total
assets |
|
|
342,072 |
|
|
|
369,258 |
|
|
|
393,094 |
|
|
|
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Interest-bearing loans
and borrowings, including Interest payable, fines and penalties on
overdue amounts of RUB 47,475 million, RUB 14,615 million and RUB
2,052 million as of December 31, 2015, 2014 and January 1,
2014 |
|
|
491,674 |
|
|
|
386,518 |
|
|
|
267,078 |
|
Trade and other
payables |
|
|
54,524 |
|
|
|
61,493 |
|
|
|
51,973 |
|
Advances received |
|
|
3,492 |
|
|
|
4,286 |
|
|
|
4,290 |
|
Due to related
parties |
|
|
78 |
|
|
|
44 |
|
|
|
1,024 |
|
Provisions |
|
|
2,532 |
|
|
|
2,130 |
|
|
|
1,531 |
|
Pension
obligations |
|
|
1,120 |
|
|
|
1,072 |
|
|
|
877 |
|
Finance lease
liabilities |
|
|
13,507 |
|
|
|
15,213 |
|
|
|
10,809 |
|
Income tax payable |
|
|
5,549 |
|
|
|
3,033 |
|
|
|
3,173 |
|
Tax payable other than
income tax |
|
|
8,034 |
|
|
|
9,647 |
|
|
|
7,440 |
|
Other current
liabilities |
|
|
26 |
|
|
|
36 |
|
|
|
29 |
|
Total current
liabilities |
|
|
580,536 |
|
|
|
483,472 |
|
|
|
348,224 |
|
|
|
|
|
|
|
|
Liabilities of disposal
group classified as held for sale |
|
|
− |
|
|
|
8,607 |
|
|
|
− |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
Interest-bearing loans
and borrowings |
|
|
4,308 |
|
|
|
9,346 |
|
|
|
25,251 |
|
Provisions |
|
|
3,439 |
|
|
|
2,998 |
|
|
|
4,303 |
|
Pension
obligations |
|
|
3,746 |
|
|
|
3,445 |
|
|
|
4,903 |
|
Finance lease
liabilities |
|
|
481 |
|
|
|
146 |
|
|
|
2,973 |
|
Deferred tax
liabilities |
|
|
11,090 |
|
|
|
3,053 |
|
|
|
17,475 |
|
Other non-current
liabilities |
|
|
189 |
|
|
|
1,157 |
|
|
|
3,453 |
|
Income tax payable |
|
|
137 |
|
|
|
3,447 |
|
|
|
− |
|
Total
non-current liabilities |
|
|
23,390 |
|
|
|
23,592 |
|
|
|
58,358 |
|
Total
liabilities |
|
|
603,926 |
|
|
|
515,671 |
|
|
|
406,582 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common shares |
|
|
4,163 |
|
|
|
4,163 |
|
|
|
4,163 |
|
Preferred shares |
|
|
833 |
|
|
|
833 |
|
|
|
833 |
|
Additional paid-in
capital |
|
|
28,322 |
|
|
|
25,592 |
|
|
|
25,591 |
|
Accumulated other
comprehensive income (loss) |
|
|
445 |
|
|
|
1,018 |
|
|
|
(11 |
) |
Accumulated
deficit |
|
|
(301,565 |
) |
|
|
(186,272 |
) |
|
|
(53,564 |
) |
Equity
attributable to equity shareholders of Mechel PAO |
|
|
(267,802 |
) |
|
|
(154,666 |
) |
|
|
(22,988 |
) |
|
|
|
|
|
|
|
Non-controlling
interests |
|
|
5,948 |
|
|
|
8,253 |
|
|
|
9,500 |
|
Total
equity |
|
|
(261,854 |
) |
|
|
(146,413 |
) |
|
|
(13,488 |
) |
Total equity
and liabilities |
|
|
342,072 |
|
|
|
369,258 |
|
|
|
393,094 |
|
|
Consolidated statement of profit (loss)
and other comprehensive income (loss)(All amounts are in
millions of Russian rubles)
|
|
Year endedDecember 31,2015 |
|
Year endedDecember 31,2014 |
Continuing
operations |
|
|
|
|
Revenue |
|
|
253,141 |
|
|
|
243,992 |
|
Cost of goods sold |
|
|
(151,334 |
) |
|
|
(153,057 |
) |
Gross
profit |
|
|
101,807 |
|
|
|
90,935 |
|
|
|
|
|
|
Selling and
distribution expenses |
|
|
(51,117 |
) |
|
|
(55,661 |
) |
Loss on write-off of
property, plant and equipment |
|
|
(691 |
) |
|
|
(661 |
) |
Impairment of goodwill
and other non-current assets |
|
|
(1,460 |
) |
|
|
(7,996 |
) |
Allowance for doubtful
accounts |
|
|
(1,464 |
) |
|
|
(3,671 |
) |
Taxes other than income
taxes |
|
|
(5,853 |
) |
|
|
(6,469 |
) |
Allowance for amounts
due from related parties |
|
|
(43 |
) |
|
|
(126 |
) |
Administrative and
other operating expenses |
|
|
(17,300 |
) |
|
|
(16,315 |
) |
Other operating
income |
|
|
189 |
|
|
|
851 |
|
Total selling,
distribution and operating expenses, net |
|
|
(77,739 |
) |
|
|
(90,048 |
) |
Operating
profit |
|
|
24,068 |
|
|
|
887 |
|
|
|
|
|
|
Finance income |
|
|
183 |
|
|
|
107 |
|
Finance costs |
|
|
(60,452 |
) |
|
|
(28,110 |
) |
Foreign exchange gain
(loss), net |
|
|
(71,106 |
) |
|
|
(103,176 |
) |
Share of profit of
associates |
|
|
− |
|
|
|
7 |
|
Other income |
|
|
526 |
|
|
|
684 |
|
Other expenses |
|
|
(347 |
) |
|
|
(1,486 |
) |
Total other
income and (expense), net |
|
|
(131,196 |
) |
|
|
(131,974 |
) |
Loss before tax
from continuing operations |
|
|
(107,128 |
) |
|
|
(131,087 |
) |
|
|
|
|
|
Income tax (expense)
benefit |
|
|
(8,322 |
) |
|
|
8,822 |
|
Loss for the
year from continuing operations |
|
|
(115,450 |
) |
|
|
(122,265 |
) |
|
|
|
|
|
Discontinued
operations |
|
|
|
|
Profit (loss) after tax
for the year from discontinued operations, net |
|
|
822 |
|
|
|
(11,702 |
) |
Loss for the
year |
|
|
(114,628 |
) |
|
|
(133,967 |
) |
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity holders of the
parent |
|
|
(115,163 |
) |
|
|
(132,704 |
) |
Non-controlling
interests |
|
|
535 |
|
|
|
(1,263 |
) |
Other
comprehensive income |
|
|
|
|
Other comprehensive
income to be reclassified to profit or loss in subsequent periods,
net of income tax: |
|
|
295 |
|
|
|
1,170 |
|
Exchange differences on
translation of foreign operations |
|
|
287 |
|
|
|
1,168 |
|
Net gain on available
for sale financial assets |
|
|
8 |
|
|
|
2 |
|
|
|
|
|
|
Other comprehensive
loss not to be reclassified to profit or loss in subsequent
periods, net of income tax: |
|
|
(194 |
) |
|
|
(127 |
) |
Re-measurement losses
on defined benefit plans |
|
|
(194 |
) |
|
|
(127 |
) |
Other
comprehensive income for the year, net of tax |
|
|
101 |
|
|
|
1,043 |
|
Total
comprehensive loss for the year, net of tax |
|
|
(114,527 |
) |
|
|
(132,924 |
) |
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity holders of the
parent |
|
|
(115,064 |
) |
|
|
(131,675 |
) |
Non-controlling
interests |
|
|
537 |
|
|
|
(1,249 |
) |
|
|
|
|
|
Earnings (loss)
per share |
|
|
|
|
Weighted average number
of common shares |
|
|
416,270,745 |
|
|
|
416,270,745 |
|
Basic and diluted, loss
for the year attributable to ordinary equity holders of the
parent |
|
|
(276.65 |
) |
|
|
(318.79 |
) |
Loss per share from
continuing operations (Russian rubles per share) basic and
diluted |
|
|
(278.44 |
) |
|
|
(289.96 |
) |
Earnings (loss) per
share from discontinued operations (Russian rubles per share) |
|
|
1.79 |
|
|
|
(28.83 |
) |
|
Сonsolidated statement of Cash
Flows(All amounts are in millions of Russian rubles,
unless stated otherwise)
|
|
Year ended December 31, |
|
|
|
2015 |
|
|
|
2014 |
|
Cash flows from
operating activities |
|
|
|
|
Net
loss |
|
|
(114,628 |
) |
|
|
(133,967 |
) |
(Profit) loss from
discontinuing operations, net of income tax |
|
|
(822 |
) |
|
|
11,702 |
|
Net loss from
continuing operations |
|
|
(115,450 |
) |
|
|
(122,265 |
) |
Adjustments to
reconcile net loss from continuing operations to net cash provided
by operating activities: |
|
|
|
|
Depreciation |
|
|
12,397 |
|
|
|
12,639 |
|
Depletion and
amortization |
|
|
1,688 |
|
|
|
1,790 |
|
Foreign exchange
loss |
|
|
71,106 |
|
|
|
103,176 |
|
Deferred income
taxes |
|
|
7,946 |
|
|
|
(15,525 |
) |
Allowance for doubtful
accounts |
|
|
1,464 |
|
|
|
3,671 |
|
Allowance for amounts
due from related parties |
|
|
43 |
|
|
|
126 |
|
Write-off of accounts
receivable |
|
|
247 |
|
|
|
185 |
|
Write-off of taxes
receivable |
|
|
− |
|
|
|
1,605 |
|
Write-offs of
inventories to net realisable value |
|
|
1,003 |
|
|
|
394 |
|
Revision in estimated
cash flows of rehabilitation provision |
|
|
(47 |
) |
|
|
(236 |
) |
Loss on write-off of
property, plant and equipment |
|
|
691 |
|
|
|
661 |
|
Impairment of goodwill
and non-current assets |
|
|
1,460 |
|
|
|
7,996 |
|
Loss (gain) on sale of
property, plant and equipment |
|
|
102 |
|
|
|
85 |
|
Gain on sale of
investments |
|
|
− |
|
|
|
(483 |
) |
Gain on accounts
payable with expired legal term |
|
|
(222 |
) |
|
|
(37 |
) |
Pension benefit plan
curtailment gain |
|
|
(142 |
) |
|
|
(58 |
) |
Pension service cost
and actuarial loss, other expenses |
|
|
192 |
|
|
|
52 |
|
Finance income |
|
|
(183 |
) |
|
|
(107 |
) |
Finance costs |
|
|
60,452 |
|
|
|
28,110 |
|
Other |
|
|
480 |
|
|
|
1,492 |
|
Changes in working
capital items : |
|
|
|
|
Trade and other
receivables |
|
|
4,719 |
|
|
|
2,089 |
|
Inventories |
|
|
1,873 |
|
|
|
14,565 |
|
Trade and other
payables |
|
|
(7,972 |
) |
|
|
(1,640 |
) |
Advances received |
|
|
(664 |
) |
|
|
62 |
|
Taxes payable and other
current liabilities |
|
|
(1,465 |
) |
|
|
8,771 |
|
Settlements with
related parties |
|
|
(275 |
) |
|
|
(29 |
) |
Other current
assets |
|
|
997 |
|
|
|
(822 |
) |
Interest received |
|
|
25 |
|
|
|
22 |
|
Interest paid |
|
|
(28,910 |
) |
|
|
(14,963 |
) |
Income taxes paid |
|
|
(1,437 |
) |
|
|
(2,509 |
) |
Net operating cash
flows of discontinued operations |
|
|
(136 |
) |
|
|
(745 |
) |
Net cash
provided by operating activities |
|
|
9,982 |
|
|
|
28,072 |
|
Cash flows from
investing activities |
|
|
|
|
Monthly installments
for acquisition of DEMP |
|
(4,819 |
) |
|
|
(3,223 |
) |
|
Proceeds from disposal
of securities |
|
143 |
|
|
|
538 |
|
|
Loans issued and other
investments |
|
(6 |
) |
|
|
(36 |
) |
|
Proceeds from disposal
of Bluestone |
|
101 |
|
|
|
− |
|
|
Proceeds from disposal
of subsidiaries |
|
76 |
|
|
|
632 |
|
|
Purchases avaliable for
sale securities |
|
− |
|
|
|
(113 |
) |
|
Proceeds from loans
issued |
|
15 |
|
|
|
151 |
|
|
Proceeds from disposals
of property, plant and equipment |
|
405 |
|
|
|
830 |
|
|
Purchases of property,
plant and equipment |
|
(5,076 |
) |
|
|
(11,365 |
) |
|
Purchases of mineral
licenses and other related payments |
|
(71 |
) |
|
|
− |
|
|
Interest paid,
capitalized |
|
(830 |
) |
|
|
(5,141 |
) |
|
Net investing cash
flows of discontinued operations |
|
− |
|
|
|
(12 |
) |
|
Net cash used
in investing activities |
|
(10,062 |
) |
|
|
(17,739 |
) |
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from
borrowings |
|
13,875 |
|
|
|
64,469 |
|
|
Repayment of
borrowings |
|
(11,896 |
) |
|
|
(77,761 |
) |
|
Dividends paid |
|
(4 |
) |
|
|
(4 |
) |
|
Dividends paid to
noncontrolling interest |
|
(1 |
) |
|
|
(6 |
) |
|
Acquisition of
noncontrolling interest in subsidiaries |
|
(1 |
) |
|
|
(1,425 |
) |
|
Repayment of
obligations under finance lease |
|
(2,677 |
) |
|
|
(1,863 |
) |
|
Sale leaseback
proceeds |
|
− |
|
|
|
675 |
|
|
Net financing cash
flows of discontinued operations |
|
− |
|
|
|
(105 |
) |
|
Net cash used
in financing activities |
|
(704 |
) |
|
|
(16,020 |
) |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
331 |
|
|
|
901 |
|
|
Net decrease in
cash and cash equivalents |
|
(453 |
) |
|
|
(4,786 |
) |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
1,344 |
|
|
|
6,130 |
|
|
Cash and cash
equivalents at end of period |
|
891 |
|
|
|
1,344 |
|
|
Alexey Lukashov
Director of Investor Relations
Mechel PAO
Phone: 7-495-221-88-88
Fax: 7-495-221-88-00
alexey.lukashov@mechel.com
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