Mechel reports 1H 2019 operational and financial results

Moscow, August 16 - Neftegaz.RU. Mechel, one of the leading Russian mining and metals companies, announced 1H 2019 operational and financial results.

Mechel´s CEO Oleg Korzhov commented on operational results: “Our large-scale program of upgrading mining equipment at our mining assets is yielding obvious results. In the Q2 we increased coal output by a 3rd, and by 41% at the Elga coal deposit, as our management’s attention was focused on increasing coking coal production. We have also stabilized the situation with railcar availability. As a result, coking coal concentrate sales went up by 13% quarter-on-quarter — both domestically (+12%) and in Asia Pacific (+21%)."

PCI sales went up by 9% in 2Q quarter-on-quarter as the company increased PCI sales to Japanese clients. Southern Kuzbass Coal increased anthracite output in this accounting period. However, the sales results for this type of coal (-14%) reflect the fact that several major batches formed in the 4Q 2018 were sold in the Q1.

As for thermal coal, in the Q2 its sales to Russian power stations and housing and utility companies saw a seasonal slump. However, Mechel increased sales to the EU (+37%) and Asia (+21%). Vietnam, which accounts for more than half of the company´s thermal coal sales to 3rd parties, is currently the chief consumer of Elga’s thermal coal.

Despite an increase in iron ore concentrate output at Korshunov Mining Plant, its sales saw a minor decrease of 4% in the Q2.In this year’s 1st half, iron ore concentrate sales increased by 42% year on year, while sales to 3rd parties went up by 9 times.

This accounting period’s 6% decrease in coke sales was due to a major batch bound for India being rescheduled for the next accounting period.

Consolidated revenue of the company – 78.5 bln RUB (+5% compared to 1Q 2019). EBITDA – 15.0 bln RUB (-2% compared to 1Q 2019). Profit attributable to equity shareholders of Mechel – 1.4 bln RUB.