Mechel, one of the leading Russian mining and steel groups, has issued its financial results for the first quarter of 2009.
Accordingly, in the first quarter of 2009, Mechel's revenue decreased by 13.9 percent quarter on quarter to $1.18 billion, its operating income went up by 105.5 percent quarter on quarter to $13.782 million, while its consolidated EBITDA for the first three months of 2009 increased by 42 percent quarter on quarter to $474.3 million.
For Q1 2009, Mechel reported a consolidated net loss of $690.7 million, an increase of 39 percent over the consolidated net loss of $496.9 million in the fourth quarter of 2008. "The main cause of the negative result is the foreign exchange difference due to the sagging of the rate of the ruble to the euro and the US dollar that amounted to $592 million," reads the company's release.
"The first quarter of 2009 was rather challenging for Mechel as well as for the whole mining and steel industry. Nevertheless, despite the decline in demand and prices for all of the company's products we succeeded in closing the quarter with a positive net operating income. An important factor of the company's sustainability in times of crisis in the world economy is its vertically integrated structure. It has allowed us to support capacity utilization and to demonstrate flexibility in sales in a difficult market environment," Mechel's CEO Igor Zyuzin commented.
Mechel's capital expenditure on property, plant and equipment and acquisition of mineral licenses for the first quarter of 2009 amounted to $96.1 million, of which $40.6 million was invested in the mining segment, $42.7 million in the steel segment, $12.8 million in the ferroalloy segment, and $25,000 in the power segment.
As of March 31, 2009, Mechel's total debt stood at $5.8 billion. The company's cash and cash equivalents amounted to $953.3 million at the end of the first quarter of 2009, while its net debt amounted to $4.9 billion.