Consolidated revenue
– 237.0
bln rubles (+6% compared to 9M
2017)EBITDA* –
60.6 bln rubles (+3% compared to 9M
2017)Profit attributable to equity shareholders of
Mechel PAO – 11.0
bln rubles
Mechel PAO (MOEX: MTLR, NYSE: MTL), a leading Russian
mining and steel group, announces financial results for the 9M
2018.
Mechel PAO’s Chief Executive Officer Oleg
Korzhov commented:“The Group’s nine months 2018 financial result
from operating activities demonstrated a small growth year-on-year.
The third quarter turned out weaker than the previous one.“The key
factors that impacted the dynamics of our results were the
necessary planned repairs at our steelmaking facilities that have
been put off in earlier periods due to lack of financing, as well
as transport limitations due to railway car shortages. As the
markets were favorable, this did not have a major impact on our
revenue, but did increase operation costs and as such, brought down
EBITDA and profitability.“Later this year and next year we still
have several major repairs ahead of us, necessary for increasing
production and further expansion of our product range. In this
reporting period, our steelmaking experts mastered and earned
certificates for production of rails for speed railways, as well as
mastered manufacturing of conductor rails for underground railway
systems. We are also working on boosting production of stainless
flats, which are much in demand.“The mining division demonstrated
stable levels of coal mining and a growth in iron ore concentrate
production at Korshunov Mining Plant. Stripping volumes also
demonstrated a marked increase throughout the division. Sales went
down due to railcar shortages, coal was partly stored and will be
sold in future periods. At the same time, coking coal concentrate
sales to third parties demonstrated positive dynamics
quarter-on-quarter. The decrease in shipments by third-party
railcars was partially compensated by the growth in shipping using
our own rolling stock. Later this year and next year we plan to
expand our own railcar fleet to reduce our dependency on
third-party operators.“On a separate note, we have reached progress
in restructuring our debt by refinancing our 1-billion-dollar
pre-export syndicated loan. The unrestructured share of our debt
portfolio is down to 9%. We continue working on restructuring the
remainder of our loans and expect to complete this process next
year.”
Consolidated Results For The
9M2018
Mln rubles |
9M’ 18 |
|
9M’ 17 |
|
% |
|
3Q’ 18 |
|
2Q’ 18 |
|
% |
|
Revenuefrom external customers |
237,003 |
|
222,797 |
|
6% |
|
79,965 |
|
82,186 |
|
-3% |
|
Operating profit |
47,802 |
|
46,415 |
|
3% |
|
15,161 |
|
19,258 |
|
-21% |
|
EBITDA |
60,646 |
|
59,148 |
|
3% |
|
19,206 |
|
23,004 |
|
-17% |
|
EBITDA, margin |
26% |
|
27% |
|
|
24% |
|
28% |
|
|
Profitattributable to equity shareholders of
Mechel PAO |
10,997 |
|
11,114 |
|
-1% |
|
6,304 |
|
1,400 |
|
350% |
|
Mining Segment
Mechel Mining Management OOO’s Chief Executive
Officer Pavel Shtark noted:“Escalation of the trade conflict
between the United States and China, the drop in yuan exchange rate
and introduction of limitations against coal imports in Chinese
ports led to a correction in international market spot prices for
coking coal early in the third quarter to $172 per tonne FOB
Australia. Later the Chinese government announced an expansion in
investment into the country’s railroad infrastructure, which spiked
Chinese steel production to record highs and prompted an increase
in coking coal consumption. In India steel production levels have
also been high. As a result, increased global demand for coking
coal coincided with logistical difficulties with coal shipments
from major coal exporting states, and by the quarter’s end, spot
prices once again topped $200 per tonne.“During this period, our
facilities continued to implement the program of repairing and
upgrading equipment, acquiring new mining machines as well as
making up for the lag in preparing reserves for mining. For
example, thanks to new equipment and bringing in contractors with
their own fleet, stripping volumes at our coal facilities went up
in the third quarter by 23% quarter-on-quarter. At Korshunov Mining
Plant, stripping went up by 33%, while iron ore concentrate
production increased by 17% quarter-on-quarter.“At the same time,
in this reporting period there were difficulties with supplying the
division with necessary number of railcars both for transporting
run-of-mine coal to washing plants and for shipping ready products
to our customers. This hampered our ability to process and sell
coal. Some coal remained at our storages and will be sold later
when the railcar situation becomes normal.“The decrease in coal
shipments was partially compensated by the growth of coke and iron
ore sales, so the slump in revenue was minor. At the same time, the
growth of operation costs as stripping and repair works became more
intensive had a negative impact on the EBITDA and margin
dynamics.”
Mln rubles |
9M’ 18 |
|
9M’ 17 |
|
% |
|
3Q’ 18 |
|
2Q’ 18 |
|
% |
|
Revenue from external customers |
73,316 |
|
74,685 |
|
-2% |
|
24,916 |
|
25,676 |
|
-3% |
|
Revenueinter-segment |
28,460 |
|
32,974 |
|
-14% |
|
9,415 |
|
9,633 |
|
-2% |
|
EBITDA |
36,582 |
|
47,336 |
|
-23% |
|
11,691 |
|
14,408 |
|
-19% |
|
EBITDA, margin |
36% |
|
44% |
|
|
34% |
|
41% |
|
|
Steel Segment
Mechel-Steel Management Company OOO’s Chief
Executive Officer Andrey Ponomarev noted:“As a result of these nine
months, the division demonstrated growing revenue and EBITDA,
primarily due to this year’s improvement in the market situation.
The third quarter’s results showed negative dynamics compared to
the previous quarter. The main reason was the decrease in product
sales due to production cuts. Production limitations were due to an
increase in current and overhaul repairs aimed at making our
equipment operation more reliable and stable. Until this year’s end
and next year we plan a series of other major repairs as well as
measures aimed at expanding our product range. Chelyabinsk
Metallurgical Plant will conduct repairs at its blast furnace #4
and replace its converter #1 and other facilities. More works are
scheduled at the plant’s agglomeration equipment, converters,
concasters and rolling mills. It should be noted that this includes
measures aimed at improving the plant’s safety and ecological
friendliness.“Over these nine months we have increased production
of stampings by 60% due to the growth in sales of wagon axles, as
the demand from both domestic and CIS rolling-stock manufacturers
was high.“I would also like to note that in the third quarter we
have restored rails production volumes at Chelyabinsk Metallurgical
Plant’s Universal rolling mill, which have slumped in the first
half of the year. In the third quarter, we have shipped a total of
90,500 tonnes of rails which is nearly equal to the amount shipped
in the first half of the year. The Universal rolling mill also
continued to master production of new types of products. The mill
began producing new types of shaped rolls, which are due to receive
certificates from Russia’s Federal Railway Transport Register by
the end of this year.”
Mln rubles |
9M’ 18 |
|
9M’ 17 |
|
% |
|
3Q’ 18 |
|
2Q’ 18 |
|
% |
|
Revenue from external customers |
143,842 |
|
129,377 |
|
11% |
|
49,460 |
|
50,144 |
|
-1% |
|
Revenueinter-segment |
4,211 |
|
5,413 |
|
-22% |
|
1,256 |
|
1,365 |
|
-8% |
|
EBITDA |
21,960 |
|
12,175 |
|
80% |
|
7,476 |
|
8,280 |
|
-10% |
|
EBITDA, margin |
15% |
|
9% |
|
|
15% |
|
16% |
|
|
Power Segment
Mechel-Energo OOO’s Chief Executive Officer
Pyotr Pashnin noted: “The third quarter is traditionally a slow one
as the heating season is over. Also, this is the time of active
preparation for the new fall-winter season and preventive
maintenance works on our generating equipment. As a result, the
quarter’s results demonstrated an expected slump
quarter-on-quarter. At the same time, nine months 2018 financial
results markedly exceeded those of the same period last year, for
example, EBITDA grew by 40%, which is primarily due to an increase
in selling prices and the drop in operation costs.”
Mln rubles |
9M’ 18 |
|
9M’ 17 |
|
% |
|
3Q’ 18 |
|
2Q’ 18 |
|
% |
|
Revenue from external customers |
19,845 |
|
18,735 |
|
6% |
|
5,589 |
|
6,365 |
|
-12% |
|
Revenueinter-segment |
11,173 |
|
11,911 |
|
-6% |
|
3,552 |
|
3,584 |
|
-1% |
|
EBITDA |
1,380 |
|
989 |
|
40% |
|
180 |
|
463 |
|
-61% |
|
EBITDA, margin |
4% |
|
3% |
|
|
2% |
|
5% |
|
|
The management of Mechel will host a conference
call today at 6:00 p.m. Moscow time (3:00 p.m. London time, 10:00
a.m. New York time) to review Mechel’s financial results and
comment on current operations. The call may be accessed via the
Internet at http://www.mechel.com, under the Investor Relations
section.
Please dial the number below approximately 10
minutes prior to the scheduled time of the call.
Conference Call Phone
Numbers:
International: +44 (0) 330 336
9411US: +1 323-794-2575Russia: +7
495 646 9190
Conference ID: 2937189
Alexey LukashovDirector of Investor RelationsMechel
PAOPhone: 7-495-221-88-88Fax:
7-495-221-88-00alexey.lukashov@mechel.com
Mechel is an international mining and steel
company. Its products are marketed in Europe, Asia, North and South
America, Africa. Mechel unites producers of coal, iron ore
concentrate, steel, rolled products, ferroalloys, heat and electric
power. All of its enterprises work in a single production chain,
from raw materials to high value-added products.
Some of the information in this press release
may contain projections or other forward-looking statements
regarding future events or the future financial performance of
Mechel, as defined in the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. We wish to
caution you that these statements are only predictions and that
actual events or results may differ materially. We do not intend to
update these statements. We refer you to the documents Mechel files
from time to time with the U.S. Securities and Exchange Commission,
including our Form 20-F. These documents contain and identify
important factors, including those contained in the section
captioned “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in our Form 20-F, that could cause the
actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others,
the achievement of anticipated levels of profitability, growth,
cost and synergy of our recent acquisitions, the impact of
competitive pricing, the ability to obtain necessary regulatory
approvals and licenses, the impact of developments in the Russian
economic, political and legal environment, volatility in stock
markets or in the price of our shares or ADRs, financial risk
management and the impact of general business and global economic
conditions.
Attachments to the 9M 2018 Earnings Press
Release
Attachment A
Non-IFRS financial measures. This press release
includes financial information prepared in accordance with
International Financial Reporting Standards, or IFRS, as well as
other financial measures referred to as non-IFRS. The non-IFRS
financial measures should be considered in addition to, but not as
a substitute for the information prepared in accordance with
IFRS.
Adjusted EBITDA (EBITDA) represents profit
(loss) attributable to equity shareholders of Mechel PAO before
Depreciation and amortisation, Foreign exchange loss (gain), net,
Finance costs including fines and penalties on overdue loans and
borrowings and finance lease payments, Finance income, Net result
on the disposal of non-current assets, Impairment of goodwill and
other non-current assets, Write-off of accounts receivable,
Write-off of inventories to net realisable value, Allowance for
expected credit losses on financial assets, Net result on the
disposal of subsidiaries, Profit (loss) attributable to
non-controlling interests, Income tax expense (benefit), Pension
service cost and actuarial loss, other related expenses, Other
fines and penalties, Gain on restructuring and forgiveness of
accounts payable and write-off of accounts payable with expired
legal term and Other one-off items. Adjusted EBITDA margin is
defined as adjusted EBITDA as a percentage of our Revenue. Our
adjusted EBITDA may not be similar to EBITDA measures of other
companies. Adjusted EBITDA is not a measurement under IFRS and
should be considered in addition to, but not as a substitute for
the information contained in our interim condensed consolidated
statement of profit (loss) and other comprehensive income. We
believe that our adjusted EBITDA provides useful information to
investors because it is an indicator of the strength and
performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital
expenditures, acquisitions and other investments and our ability to
incur and service debt. While depreciation, amortisation and
impairment of goodwill and other non-current assets are considered
operating expenses under IFRS, these expenses primarily represent
the non-cash current period allocation of costs associated with
non-current assets acquired or constructed in prior periods. Our
adjusted EBITDA calculation is commonly used as one of the bases
for investors, analysts and credit rating agencies to evaluate and
compare the periodic and future operating performance and value of
companies within the metals and mining industry.
Our calculation of Net debt, excluding fines and
penalties on overdue amounts** is presented below:
Mln rubles |
30.09.2018 |
|
31.12.2017 |
|
Loans and borrowings,
excluding interest payable, fines and penalties on overdue
amounts |
392,831 |
|
380,541 |
|
Interest payable |
7,683 |
|
20,420 |
|
Non-current loans and
borrowings |
14,649 |
|
17,360 |
|
Other non-current
financial liabilities |
43,344 |
|
40,916 |
|
Other current financial
liabilities |
- |
|
734 |
|
less Cash and cash
equivalents |
(2,777) |
|
(2,452) |
|
Net debt, excluding finance lease liabilities, fines and
penalties on overdue amounts |
455,730 |
|
457,519 |
|
|
|
|
Current finance lease
liabilities |
5,818 |
|
7,476 |
|
Non-current finance
lease liabilities |
2,631 |
|
1,878 |
|
Net debt, excluding fines and penalties on overdue
amounts |
464,179 |
|
466,873 |
|
|
|
|
EBITDA can be reconciled to our interim
condensed consolidated statement of profit (loss) and other
comprehensive income as follows:
|
Consolidated Results |
|
Mining Segment
*** |
|
Steel Segment*** |
|
Power Segment*** |
Mln rubles |
9m 2018 |
9m 2017 |
|
9m 2018 |
9m 2017 |
|
9m 2018 |
9m 2017 |
|
9m 2018 |
9m 2017 |
Profit (loss)
attributable to equity shareholders of Mechel PAO |
10,997 |
|
11,114 |
|
|
10,385 |
|
16,873 |
|
|
618 |
|
(3,825) |
|
|
365 |
|
(582) |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation |
10,159 |
|
11,041 |
|
|
5,702 |
|
6,262 |
|
|
4,088 |
|
4,446 |
|
|
369 |
|
333 |
|
Foreign
exchange loss (gain), net |
18,604 |
|
(3,601) |
|
|
11,467 |
|
(3,664) |
|
|
7,124 |
|
64 |
|
|
13 |
|
(1) |
|
Finance
costs including fines and penalties on overdue loans and borrowings
and finance leases payments |
31,729 |
|
36,273 |
|
|
22,707 |
|
26,452 |
|
|
9,732 |
|
10,683 |
|
|
414 |
|
664 |
|
Finance
income |
(20,561) |
|
(493) |
|
|
(19,090) |
|
(1,403) |
|
|
(1,808) |
|
(572) |
|
|
(783) |
|
(44) |
|
Net
result on the disposal of non-current assets, impairment of
goodwill and other non-current assets, write-off of accounts
receivable and write-off of inventories to net realisable value,
allowance for expected credit losses on financial assets |
2,257 |
|
807 |
|
|
867 |
|
517 |
|
|
651 |
|
(15) |
|
|
739 |
|
307 |
|
Net
result on the disposal of subsidiaries |
- |
|
(474) |
|
|
(3) |
|
(474) |
|
|
3 |
|
- |
|
|
- |
|
- |
|
Profit
attributable to non-controlling interests |
933 |
|
848 |
|
|
224 |
|
386 |
|
|
585 |
|
381 |
|
|
124 |
|
80 |
|
Income
tax expense |
6,188 |
|
2,806 |
|
|
4,545 |
|
1,889 |
|
|
435 |
|
831 |
|
|
109 |
|
85 |
|
Pension service cost
and actuarial loss, other related expenses |
108 |
|
96 |
|
|
88 |
|
76 |
|
|
18 |
|
17 |
|
|
2 |
|
3 |
|
Other fines and penalties |
602 |
|
892 |
|
|
(49) |
|
476 |
|
|
620 |
|
269 |
|
|
31 |
|
147 |
|
Gain on
restructuring and forgiveness of accounts payable and write-off of
accounts payable with expired legal term |
(370) |
|
(161) |
|
|
(261) |
|
(54) |
|
|
(106) |
|
(104) |
|
|
(3) |
|
(3) |
|
EBITDA |
60,646 |
|
59,148 |
|
|
36,582 |
|
47,336 |
|
|
21,960 |
|
12,175 |
|
|
1,380 |
|
989 |
|
EBITDA,
margin |
26% |
|
27% |
|
|
36% |
|
44% |
|
|
15% |
|
9% |
|
|
4% |
|
3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Results |
|
Mining Segment
*** |
|
Steel Segment*** |
|
Power Segment*** |
Mln rubles |
3q 2018 |
2q 2018 |
|
3q 2018 |
2q 2018 |
|
3q 2018 |
2q 2018 |
|
3q 2018 |
2q 2018 |
Profit (loss)
attributable to equity shareholders of Mechel PAO |
6,304 |
|
1,400 |
|
|
9,102 |
|
1,013 |
|
|
(1,055) |
|
(370) |
|
|
(278) |
|
676 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortisation |
3,168 |
|
3,514 |
|
|
1,786 |
|
1,946 |
|
|
1,262 |
|
1,452 |
|
|
120 |
|
116 |
|
Foreign
exchange loss (gain), net |
7,024 |
|
12,088 |
|
|
3,675 |
|
8,289 |
|
|
3,353 |
|
3,783 |
|
|
(4) |
|
16 |
|
Finance
costs including fines and penalties on overdue loans and borrowings
and finance leases payments |
10,284 |
|
10,982 |
|
|
6,839 |
|
8,167 |
|
|
3,695 |
|
3,057 |
|
|
131 |
|
123 |
|
Finance
income |
(12,698) |
|
(7,770) |
|
|
(12,920) |
|
(5,822) |
|
|
(148) |
|
(1,553) |
|
|
(12) |
|
(760) |
|
Net
result on the disposal of non-current assets, impairment of
goodwill and other non-current assets, write-off of accounts
receivable and write-off of inventories to net realisable value,
allowance for expected credit losses on financial assets |
721 |
|
295 |
|
|
391 |
|
111 |
|
|
142 |
|
74 |
|
|
188 |
|
113 |
|
Net
result on the disposal of subsidiaries |
310 |
|
(310) |
|
|
- |
|
(3) |
|
|
310 |
|
(307) |
|
|
- |
|
- |
|
Profit
attributable to non-controlling interests |
346 |
|
349 |
|
|
140 |
|
56 |
|
|
193 |
|
221 |
|
|
13 |
|
73 |
|
Income
tax expense (benefit) |
3,723 |
|
2,455 |
|
|
2,773 |
|
893 |
|
|
(388) |
|
1,686 |
|
|
17 |
|
99 |
|
Pension service cost
and actuarial loss, other related expenses |
37 |
|
35 |
|
|
29 |
|
30 |
|
|
6 |
|
5 |
|
|
1 |
|
- |
|
Other fines and penalties |
293 |
|
(1) |
|
|
114 |
|
(255) |
|
|
173 |
|
248 |
|
|
5 |
|
7 |
|
Gain on
restructuring and forgiveness of accounts payable and write-off of
accounts payable with expired legal term |
(306) |
|
(33) |
|
|
(238) |
|
(17) |
|
|
(67) |
|
(16) |
|
|
(1) |
|
- |
|
EBITDA |
19,206 |
|
23,004 |
|
|
11,691 |
|
14,408 |
|
|
7,476 |
|
8,280 |
|
|
180 |
|
463 |
|
EBITDA,
margin |
24% |
|
28% |
|
|
34% |
|
41% |
|
|
15% |
|
16% |
|
|
2% |
|
5% |
|
*** including
inter-segment operations |
|
|
|
|
|
|
|
|
|
|
|
Attachment B
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME for the nine months
ended September 30, 2018 |
(All amounts are in
millions of Russian rubles, unless stated otherwise) |
|
Nine months ended September 30, |
|
Nine months ended September 30, |
|
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
Revenue |
|
237,003 |
|
|
222,797 |
|
Cost of sales |
|
(131,757) |
|
|
(121,009) |
|
Gross
profit |
|
105,246 |
|
|
101,788 |
|
|
|
|
|
|
Selling and
distribution expenses |
|
(41,939) |
|
|
(40,858) |
|
Loss on write-off of
non-current assets |
|
(243) |
|
|
(152) |
|
Allowance for expected
credit losses on financial assets |
|
(806) |
|
|
(355) |
|
Taxes other than income
taxes |
|
(3,685) |
|
|
(3,671) |
|
Administrative and
other operating expenses |
|
(11,708) |
|
|
(11,181) |
|
Other operating
income |
|
937 |
|
|
844 |
|
Total selling,
distribution and operating income and (expenses), net |
|
(57,444) |
|
|
(55,373) |
|
Operating
profit |
|
47,802 |
|
|
46,415 |
|
|
|
|
|
|
Finance income |
|
20,561 |
|
|
493 |
|
Finance costs including
fines and penalties on overdue loans and borrowings and finance
lease payments |
|
(31,729) |
|
|
(36,273) |
|
Foreign exchange (loss)
gain, net |
|
(18,604) |
|
|
3,601 |
|
Share of profit of
associates, net |
|
38 |
|
|
14 |
|
Other income |
|
401 |
|
|
648 |
|
Other expenses |
|
(351) |
|
|
(130) |
|
Total other
income and (expense), net |
|
(29,684) |
|
|
(31,647) |
|
Profit before
tax |
|
18,118 |
|
|
14,768 |
|
|
|
|
|
|
Income tax expense |
|
(6,188) |
|
|
(2,806) |
|
Profit for the
period |
|
11,930 |
|
|
11,962 |
|
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity shareholders of
Mechel PAO |
|
10,997 |
|
|
11,114 |
|
Non-controlling
interests |
|
933 |
|
|
848 |
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
Other comprehensive
income to be reclassified to profit or loss in subsequent periods,
net of income tax: |
|
79 |
|
|
179 |
|
Exchange differences on
translation of foreign operations |
|
79 |
|
|
179 |
|
Other comprehensive
(loss) not to be reclassified to profit or loss in subsequent
periods, net of income tax: |
|
(5) |
|
|
- |
|
Re-measurement of
defined benefit plans |
|
(5) |
|
|
- |
|
Other
comprehensive income for the period, net of tax |
|
74 |
|
|
179 |
|
|
|
|
|
|
Total
comprehensive income for the period, net of tax |
|
12,004 |
|
|
12,141 |
|
|
|
|
|
|
Attributable
to: |
|
|
|
|
Equity shareholders of
Mechel PAO |
|
11,071 |
|
|
11,293 |
|
Non-controlling
interests |
|
933 |
|
|
848 |
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
Weighted average number
of common shares |
|
416,270,745 |
|
|
416,270,745 |
|
Basic and diluted
profit for the period attributable to common equity shareholders of
Mechel PAO (Russian rubles per share) |
|
26.42 |
|
|
26.70 |
|
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION as of September 30,
2018 |
(All amounts are in millions of Russian rubles) |
|
|
September 30,
2018 |
|
December 31, 2017 |
|
|
(unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Property, plant and
equipment |
|
194,352 |
|
|
197,875 |
|
Mineral licenses |
|
32,338 |
|
|
33,240 |
|
Goodwill and other
intangible assets |
|
19,247 |
|
|
19,211 |
|
Investments in
associates |
|
292 |
|
|
283 |
|
Deferred tax
assets |
|
138 |
|
|
96 |
|
Other non-current
assets |
|
674 |
|
|
758 |
|
Non-current financial
assets |
|
200 |
|
|
202 |
|
Total
non-current assets |
|
247,241 |
|
|
251,665 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Inventories |
|
40,332 |
|
|
37,990 |
|
Income tax
receivables |
|
248 |
|
|
107 |
|
Trade and other
receivables |
|
18,746 |
|
|
18,762 |
|
Other current
assets |
|
7,706 |
|
|
7,589 |
|
Other current financial
assets |
|
494 |
|
|
562 |
|
Cash and cash
equivalents |
|
2,777 |
|
|
2,452 |
|
Total current
assets |
|
70,303 |
|
|
67,462 |
|
|
|
|
|
|
Total
assets |
|
317,544 |
|
|
319,127 |
|
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
Equity |
|
|
|
|
Common shares |
|
4,163 |
|
|
4,163 |
|
Preferred shares |
|
833 |
|
|
833 |
|
Additional paid-in
capital |
|
24,378 |
|
|
24,378 |
|
Accumulated other
comprehensive income |
|
1,377 |
|
|
1,303 |
|
Accumulated
deficit |
|
(275,817) |
|
|
(283,743) |
|
Equity
attributable to equity shareholders of Mechel PAO |
|
(245,066) |
|
|
(253,066) |
|
Non-controlling
interests |
|
9,861 |
|
|
8,933 |
|
Total
equity |
|
(235,205) |
|
|
(244,133) |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans and
borrowings |
|
14,649 |
|
|
17,360 |
|
Finance lease
liabilities |
|
2,631 |
|
|
1,878 |
|
Other non-current
financial liabilities |
|
43,344 |
|
|
40,916 |
|
Other non-current
liabilities |
|
124 |
|
|
138 |
|
Pension
obligations |
|
3,664 |
|
|
3,512 |
|
Provisions |
|
3,525 |
|
|
3,814 |
|
Deferred tax
liabilities |
|
12,949 |
|
|
11,494 |
|
Total
non-current liabilities |
|
80,886 |
|
|
79,112 |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
Loans and borrowings,
including interest payable, fines and penalties on overdue amounts
of RUB 19,775 million and RUB 41,992 million as of
September 30, 2018 and December 31, 2017, respectively |
|
412,606 |
|
|
422,533 |
|
Trade and other
payables |
|
30,874 |
|
|
33,469 |
|
Finance lease
liabilities |
|
5,818 |
|
|
7,476 |
|
Income tax payable |
|
5,709 |
|
|
4,578 |
|
Taxes and similar
charges payable other than income tax |
|
6,316 |
|
|
6,696 |
|
Advances received |
|
6,363 |
|
|
4,385 |
|
Other current financial
liabilities |
|
- |
|
|
734 |
|
Other current
liabilities |
|
79 |
|
|
69 |
|
Pension
obligations |
|
980 |
|
|
849 |
|
Provisions |
|
3,118 |
|
|
3,359 |
|
Total current
liabilities |
|
471,863 |
|
|
484,148 |
|
|
|
|
|
|
Total
liabilities |
|
552,749 |
|
|
563,260 |
|
Total equity
and liabilities |
|
317,544 |
|
|
319,127 |
|
|
|
|
|
|
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS for the nine months ended September 30,
2018 |
(All amounts are in millions of Russian rubles) |
|
|
Nine months ended
September 30, |
|
Nine months ended
September 30, |
|
|
2018 |
|
2017 |
|
|
(unaudited) |
|
(unaudited) |
Cash flows from
operating activities |
|
|
|
|
Profit
for the period |
|
11,930 |
|
|
11,962 |
|
Adjustments to
reconcile profit to net cash provided by operating activities |
|
|
|
|
Depreciation of
property, plant and equipment |
|
9,079 |
|
|
9,743 |
|
Amortisation of mineral
licenses and amortisation of intangible assets |
|
1,080 |
|
|
1,298 |
|
Foreign exchange loss
(gain), net |
|
18,604 |
|
|
(3,601) |
|
Deferred tax expense
(benefit) |
|
2,234 |
|
|
(1,562) |
|
Allowance for expected
credit losses on financial assets |
|
806 |
|
|
346 |
|
Write-off of accounts
receivable |
|
18 |
|
|
48 |
|
Write-off of
inventories to net realisable value |
|
1,107 |
|
|
292 |
|
Loss on write-off of
non-current assets |
|
243 |
|
|
152 |
|
Loss (gain) on disposal
of non-current assets |
|
64 |
|
|
(9) |
|
Gain on restructuring
and forgiveness of accounts payable and write-off of accounts
payable with expired legal term |
|
(370) |
|
|
(161) |
|
Pension service cost
and actuarial loss, other related expenses |
|
108 |
|
|
96 |
|
Finance income |
|
(20,561) |
|
|
(493) |
|
Finance costs including
fines and penalties on overdue loans and borrowings and finance
lease payments |
|
31,729 |
|
|
36,273 |
|
Income associated with
disposal of Bluestone |
|
(3) |
|
|
(481) |
|
Provisions for legal
claims, on taxes other than income tax and other provisions |
|
(110) |
|
|
(353) |
|
Other |
|
(46) |
|
|
128 |
|
|
|
|
|
|
Changes in working
capital items |
|
|
|
|
Trade and other
receivables |
|
(41) |
|
|
(708) |
|
Inventories |
|
(4,236) |
|
|
(2,448) |
|
Trade and other
payables |
|
43 |
|
|
(3,680) |
|
Advances received |
|
1,868 |
|
|
(318) |
|
Taxes payable and other
liabilities |
|
3,335 |
|
|
3,509 |
|
Other current
assets |
|
(41) |
|
|
(1,369) |
|
|
|
|
|
|
Income tax paid |
|
(3,062) |
|
|
(3,202) |
|
|
|
|
|
|
Net cash
provided by operating activities |
|
53,778 |
|
|
45,462 |
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Loans issued and other
investments |
|
- |
|
|
(5) |
|
Proceeds from loans
issued and other investments |
|
9 |
|
|
144 |
|
Interest received |
|
142 |
|
|
129 |
|
Proceeds from royalty
and other proceeds associated with disposal of Bluestone |
|
3 |
|
|
481 |
|
Proceeds from disposal
of subsidiaries, net of cash disposed |
|
- |
|
|
82 |
|
Proceeds from disposals
of property, plant and equipment |
|
140 |
|
|
275 |
|
Purchases of property,
plant and equipment |
|
(3,321) |
|
|
(4,250) |
|
Purchases of intangible
assets |
|
(150) |
|
|
- |
|
Interest paid,
capitalised |
|
(310) |
|
|
(411) |
|
Net cash used
in investing activities |
|
(3,487) |
|
|
(3,555) |
|
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from loans and
borrowings, including proceeds from factoring arrangement of
RUB 1,959 million and nil for the nine months ended September
30, 2018 and 2017, respectively |
|
67,228 |
|
|
16,809 |
|
Repayment of loans and
borrowings, including payments from factoring arrangement of nil
and RUB 474 million for the nine months ended September 30, 2018
and 2017, respectively |
|
(83,904) |
|
|
(28,366) |
|
Repayment of other
current financial liabilities |
|
(442) |
|
|
- |
|
Dividends paid to
shareholders of Mechel PAO |
|
(1,386) |
|
|
(856) |
|
Dividends paid to
non-controlling interests |
|
(7) |
|
|
(118) |
|
Interest paid,
including fines and penalties |
|
(25,302) |
|
|
(24,640) |
|
Repayment of
obligations under finance lease |
|
(2,172) |
|
|
(2,712) |
|
Deferred payments for
acquisition of assets |
|
(540) |
|
|
(272) |
|
Deferred consideration
paid for the acquisition of subsidiaries in prior periods |
|
(3,340) |
|
|
(2,430) |
|
Net cash used
in financing activities |
|
(49,865) |
|
|
(42,585) |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
364 |
|
|
(415) |
|
Allowance for expected
credit losses on cash and cash equivalents |
|
(32) |
|
|
- |
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
758 |
|
|
(1,093) |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
2,452 |
|
|
1,689 |
|
Cash and cash
equivalents, net of overdrafts at beginning of period |
|
1,223 |
|
|
1,453 |
|
Cash and cash
equivalents at end of period |
|
2,777 |
|
|
2,239 |
|
Cash and cash
equivalents, net of overdrafts at end of period |
|
1,981 |
|
|
360 |
|
|
|
|
|
|
|
|
These interim condensed consolidated financial
statements were prepared by Mechel PAO in accordance with IFRS and
have not been audited by the independent auditor. If these interim
condensed consolidated financial statements are audited in the
future, the audit could reveal differences in our consolidated
financial results and we cannot assure that any such differences
would not be material.There were certain reclassifications to
conform with the current period presentation.
__________________________
* EBITDA - Adjusted EBITDA. Please find the calculation of
the Adjusted EBITDA and other non-IFRS measures used here and
hereafter in Attachment A.
** Calculations of Net debt could be differ from indicators
calculated in accordance with loan agreements upon dependence on
definitions in such agreements.
Mechel PAO (NYSE:MTL)
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