Mechel, one of the leading Russian mining and steel groups, has announced that in the first quarter of this year it has registered an increase of 112 percent in its net income to about $82.6 million compared to a net loss of $690.7 million in the same period last year.
Q1 2010 |
Q1 2009 |
Change Q1 2010/Q1 2009 |
|
Revenues from external customers |
1,900,415,000 |
1,179,405,000 |
61.1% |
Intersegment sales |
328,693,000 |
173,184,000 |
89.8% |
Operating income |
147,624,000 |
13,781,000 |
971.2% |
Net income/(loss) |
82,580,000 |
(690,701,000) |
112.0% |
EBITDA |
257,653,000 |
116,648,000 |
120.9 % |
Mechel also said that it expects a growth in operational and financial performance through the rest of the year, helped by new acquisitions in its steel segment (Romanian steel plant Laminorul Braila and Turkish steel trading group Ramateks), expansion in coal output, and the refinancing of debt facilities. In addition, Mechel predicted that the steel market will strengthen in Q4.
"Despite a certain temporary chill-out on the Russian and international markets which we notice at the moment, which is quite natural after the relatively strong growth of the last several months, we believe that market conditions will improve at the beginning of autumn 2010," Mechel-Steel Management Company CEO Andrey Deineko said.
Mechel's results were driven also by its mining segment, with the company continuing to accelerate coking coal production, which allowed it in Q2 this year to achieve pre-crisis production levels and even to exceed them.
In 2010, Mechel is to invest $700 million this year to develop its Elga coking coal deposit which has 2.2 billion mt of reserves. The first coking coal is expected to be mined in Q4, though the railway required to facilitate exports is to be completed by the end of 2011.
Mechel's capital expenditure on property, plant and equipment and acquisition of mineral licenses for the first quarter of 2010 amounted to $193.8 million, of which $146.8 million was invested in the mining segment, $35.5 million was invested in the steel segment, and $8.4 million was invested in the ferroalloy segment.
As of March 31, 2010 Mechel's total debt was $6.3 billion.