EquityStory.RS, LLC-News: PJSC Mechel / Key word(s): Miscellaneous
PJSC Mechel: Mechel Reports 2019 Operational Results
2020-03-19 / 10:15 CET/CEST
The issuer is solely responsible for the content of this announcement.
*Mechel Reports 2019 Operational Results*
Moscow, Russia - 19 March 2020 - Mechel PAO (MOEX: MTLR, NYSE: MTL), one of
the leading Russian mining and metals companies, announces 2019 operational
results.
Mechel PAO's Chief Executive Officer Oleg Korzhov commented on operational
results.
"For us, 2019 became a year of major equipment reconstruction projects in
our steel segment and restoring the equipment pool in our mining division.
We have seen results of this effort at Southern Kuzbass Coal Company as
early as the end of last year - starting in October, the company reached a
monthly output level of 1 million tonnes and demonstrated a confident growth
of all key results, with mining volumes up by 25%. Korshunov Mining Plant
improved its annual output by 30%. In the steel segment, we completed a
large-scale reconstruction of one of our three blast furnaces and one of
three converters. This will increase these facilities' output by 15% and
thus our overall steel output in 2020. Reconstruction of one of Bratsk
Ferroalloys Plant's ferroalloy furnaces is also nearly complete.
"In 2019 we have invested a lot of effort in maintaining coal mining at the
previous levels as our stripping volumes increased dramatically. We did this
both by launching new mining equipment and by bringing in third-party
contractors. It is important to note that at Southern Kuzbass Coal Company
we managed to implement the strategy of increasing mining of valuable coking
coal grades as new longwalls at V.I. Lenina Underground and Sibirginskaya
Underground mines were launched.
"As for the coal market situation, this accounting period was very volatile
as prices for premium hard coking coal were very good in the first half a
year, staying near the level of $200 per tonne, but starting mid-year, the
prices began to decline and reached less than $130. In August-October we
have traditionally signed a series of major contracts, with customers both
old and new, and ensured ourselves guaranteed sales for the year ahead.
Demand for coal from our customers in Asia Pacific remains strong as we have
foreseen. China and South Korea were among that market's key players who
increased import of both coking and thermal coal. As for Mechel's sales, in
2019 we have decreased sales to China by a quarter, redistributing them in
favor of Japan's market which is more profitable for us. In 2020, the coal
market is still volatile, and considering the coronavirus situation, may
remain so for several months yet.
"Coking coal concentrate sales in 2019 remained largely at the previous
year's level. 29% of our overall coking coal concentrate sales went to
Japan, 27% to China and 24% to our Russian customers.
"PCI sales went up by 15% primarily due to increased export to South Korea.
"Thermal coal sales remained roughly at 2018 levels. We redistributed sales
in favor of more profitable Asian markets, increasing exports to this region
by half, with sales to our Vietnamese customers nearly quadrupling.
"The output increase at Korshunov Mining Plant, achieved thanks to our
technical upgrade program, had a positive impact on iron ore concentrate
sales - sales to third-party clients went up by 38% year-on-year.
"Coke sales to third parties went up by 36% as stockpiles freed due to
repairs at Chelyabinsk Metallurgical Plant's blast furnace #4 were sold to
export, including Turkey and India.
"Due to a large-scale upgrade of Chelyabinsk Metallurgical Plant's
blast-furnace and oxygen-converter workshops, pig iron and steel output in
this accounting period went down by 8% and 7% accordingly. With this in
mind, we have optimized our operations so as to partially compensate for the
output decrease by improving its profitability. Long rolls sales went down
by 8%, but sales of shapes and sections produced by the plant's universal
rolling mill went up by 2%, and rails by 15%. Rail sales, both domestic and
international, nearly doubled - not counting shipments made to Russian
Railways.
"Flat rolls sales went down by 7%. At the same time, we have upped sales of
stainless flats 2.5 times, with a significant raise of the average price. In
this product segment, we are consistently increasing our share of the
Russian market as per our strategy.
"The 10-percent decrease in sales of Bratsk Ferroalloys Plant's products was
due to the ore-thermal furnace #3 being halted for an upgrade. Its relaunch
is scheduled for late March. Bratsk Ferroalloys Plant's upgrade was
synchronized with similar works undertaken at Chelyabinsk Metallurgical
Plant, as the latter needed less ferroalloy products during major repairs of
its own steelmaking facilities. Third-party sales remained at the same level
as high-quality ferrosilicon was redirected from the domestic market to
Asia.
"Hardware sales went down by 9%, this time due to decreased output of
various types of wire at Beloretsk Metallurgical Plant and Mechel Nemunas as
this segment faced an unfavorable market situation, as well as introduction
of import quotas and fees for shipments to the European Union and Ukraine.
"Sales of forgings went down by 9% year-on-year as demand hit a major
seasonal slump in late 2019. Stampings sales went down by 25% as sales of
the most mass product, rough-forged axles for railway transport, declined.
In this segment, we staked on the increase in sales of high-priced products
- stampings made of alloyed, stainless and heat-resistant steels. Aviation
companies are key consumers of this type of product.
"Our power division's facilities in 2019 produced more electricity by 4% in
accordance with operational plans regarding the load on Southern Kuzbass
Power Plant. The decrease in heat output by 6% was due to prevalent warmer
temperatures."
Production and sales for 2019
Production:
Product 2019, 2018, % 4Q2019, 3Q2019, %
Name thous thousan thousan thousan
and d d d
tonne tonnes tonnes tonnes
s
Run-of-Mine 18,84 18,813 0 5,420 5,290 +2
Coal 5
Pig Iron 3,326 3,690 -8 796 794 0
Steel 3,610 3,881 -7 860 888 -3
Electric 3,395 3,250,5 +4 899,197 740,415 +21
power ,305 99
generation
(thousand
kWh)
Heat power 5,392 5,741,3 -6 1,719,4 677,343 +154
generation ,804 20 60
(Gcal)
Elga coal complex:
Product 2019, 2018, % 4Q2019, 3Q2019 %
Name thous thousand thousand ,
and tonnes tonnes thousa
tonne nd
s tonnes
Run-of-mine 4,318 4,923 -12 1,088 1,193 -9
coal
Sales:
Product Name 2019 2018 % 4Q2019, 3Q2019, %
, , thousan thousan
thou thou d d
sand sand tonnes tonnes
tonn tonn
es es
Coking coal 7,16 7,14 0,2 1,830 1,720 +6
concentrate 3 9
Including 4,30 4,25 +1 994 1,068 -7
coking coal 3 8
concentrate
supplied to
third
parties
PCI 1,41 1,23 +15 482 390 +24
7 7
Including 1,41 1,23 +15 482 390 +24
PCI supplied 7 7
to third
parties
Anthracites 736 1,16 -37 235 206 +14
9
Including 548 968 -43 177 137 +29
anthracites
supplied to
third
parties
Thermal coal 5,18 5,29 -2 1,174 1,364 -14
1 0
Including 4,49 4,53 -1 950 1,203 -21
thermal coal 1 8
supplied to
third
parties
Iron ore 2,55 1,97 +30 636 722 -12
concentrate 8 2
Including 193 140 +38 12 14 -15
iron ore
concentrate
supplied to
third
parties
Coke 2,52 2,44 +4 615 649 -5
8 0
Including 945 697 +36 248 281 -12
coke
supplied to
third
parties
Ferrosilicon 67 74 -10 15 16 0
Long rolls 2,50 2,73 -8 618 630 -2
9 1
Flat rolls 449 481 -7 112 108 +3
Hardware 564 622 -9 126 148 -15
Forgings 40 44 -9 8 11 -23
Stampings 107 143 -25 23 25 -6
Universal rolling mill:
2019, 2018, % 4Q2019, 3Q2019, %
thousand thousand thousand thousand
tonnes tonnes tonnes tonnes
Sales 280 244 +15 87 103 -16
of
rails
Sales 287 282 +2 74 72 +3
of
secti
ons
***
Mechel PAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@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.
2020-03-19 CET/CEST Dissemination of a Corporate News, transmitted by
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Language: English
Company: PJSC Mechel
1 Krasnoarmeyskaya Street, Moscow, Russia
127006 Moscow
Russia
Phone: +7 (495) 221-88-88
Fax: +7 (495) 221-88-00
E-mail: press@mechel.com
Internet: www.mechel.ru/
ISIN: US5838406081, RU000A0DKXV5
WKN: A2AC1G
Listed: Foreign Exchange(s) Moscow, NYSE
EQS News ID: 1001597
End of News EquityStory.RS, LLC News Service
1001597 2020-03-19 CET/CEST
(END) Dow Jones Newswires
March 19, 2020 05:15 ET (09:15 GMT)
