Mechel posts lower net profit for 2020, output rises slightly

Thursday, 11 March 2021 16:04:02 (GMT+3)   |   Istanbul

Mechel, one of the leading Russian mining and steel groups, has announced its financial and operational results for 2020.

Accordingly, in 2020, Mechel saw a net profit of RUB 808 million ($10.94 million), compared to a net profit of RUB 2.41 billion recorded in the previous year. This was the result of foreign exchange losses on currency liabilities amid the weaker ruble in the given period. In 2020, Mechel’s sales revenues decreased by eight percent year on year to RUB 265.45 billion ($3.59 billion). The operating profit of the company fell by 42 percent year on year to RUB 19.92 billion ($269.94 million). The company’s EBITDA in the given year amounted to RUB 41.05 billion ($556.14 million), falling by 23 percent compared to the previous year, SteelOrbis has learned.

In 2020, the revenue of Mechel’s mining segment fell by 15 percent year on year to RUB 70.88 billion ($960.35 million), while the division’s EBITDA in the given period declined by 34 percent year on year, totaling RUB 26.26 billion ($355.78 million). This was primarily due to a major decline in prices for all types of coal products as compared to last year. Meanwhile, the company’s revenues from the steel segment in 2020 amounted to RUB 166.88 billion ($2.26 billion), down five percent year on year. EBITDA of the steel segment in the given period went up by eight percent year on year to RUB 13.15 billion ($178.19 million), as the share of high value-added products went up and costs of sales went down.

In 2020, Mechel produced 3.65 million mt of crude steel, one percent higher compared to 2019. Meanwhile, the company’s pig iron production in the given year increased by six percent year on year to 3.53 million mt. Meanwhile, the production of run-of-mine coal totaled 15.95 million mt, up 10 percent compared to 2019.

In the full year, the company’s coking coal concentrate sales fell by two percent year on year to 5.63 million mt amid a slump in the company’s sales to Japan, with sales to third parties falling by one percent year on year to 3.96 million mt during the given period. The company’s thermal coal sales in 2020 totaled 4.02 million mt, up by 26 percent year on year, due to increased output at its subsidiary Yakutugol Holding Company.

In 2020, the company’s shipments of iron ore concentrate fell by 16 percent year on year to 2.16 million mt, due to processing of ore with lower iron content. The company’s sales of coke in the given year increased by four percent year on year to 2.63 million mt. Meanwhile, the company’s sales of ferrosilicon in 2020 fell by six percent compared to 2019, totaling 63,000 mt due to its halting of Bratsk Ferroalloy Plant’s ore thermal furnace No. 3 for modernization, as well as global negative trends in ferrosilicon sales.

In the given year, the company’s total sales of long steel products increased by one percent year on year to 2.55 million mt and sales of flat steel products totaled 456,000 mt, up two percent year on year.

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