Russia-based mining and steel producer Mechel has announced that its consolidated revenue decreased by 23 percent year on year to RUB 117.35 billion ($1.37 billion) in the first half of 2026, amid low coal prices, sluggish steel demand, high interest rates and sanctions-related restrictions.
Steel segment posts negative EBITDA on lower demand and prices
In the given period, Mechel recorded a net loss attributable to shareholders of RUB 41.47 billion ($484.46 million), compared with RUB 40.51 billion ($473.24 million) in the first half of 2025, while its EBITDA shifted from a positive RUB 5.69 billion ($66.47 million) to a negative RUB 6.05 billion ($70.68 million).
The company's steel segment revenue fell by 32 percent year on year to RUB 73.24 billion ($855.60 million) due to lower sales volumes and prices, while the segment posted a negative EBITDA of RUB 7.07 billion ($82.59 million), compared with a positive RUB 5.97 billion ($69.74 million) a year earlier. Nevertheless, steel segment revenue increased by 11 percent quarter on quarter in the second quarter, supported by higher sales of most long steel products and improving construction steel demand.
Mining performance improves in the second quarter
Mechel's mining segment revenue declined by 16 percent year on year to RUB 22.31 billion ($260.63 million) in the first half, while its negative EBITDA widened slightly to RUB 910 million ($10.63 million). However, the segment returned to positive EBITDA in the second quarter as sales of coking coal concentrate and anthracite increased and thermal coal prices strengthened.
Against the backdrop of improving coal market conditions, Mechel plans to raise its coal production to approximately 10 million mt in 2026. The company is preparing additional reserves, expanding its mining equipment fleet and expects to receive 85 units of heavy mining machinery during the year.
Mechel maintains cost-cutting and investment measures
Mechel invested RUB 4.2 billion ($49.07 million) in the renewal and maintenance of fixed assets during the first half. Its net debt, excluding penalties and fines, stood at RUB 289.6 billion ($3.38 billion) as of June 30, while the average cost of its debt portfolio was 15.7 percent at the end of August.
Although market conditions remained challenging, the company's consolidated revenue rose by four percent quarter on quarter to RUB 59.82 billion ($698.83 million) in the second quarter, while its negative EBITDA narrowed to RUB 1.17 billion ($13.67 million) from RUB 4.88 billion ($57.01 million) in the previous quarter.
