Mechel OAO, a leading Russian mining and steel group announced financial results for the 9 months 2012.
The net revenue in Q3 2012 decreased by 12.0% and amounted to USD 2.7 billion compared to USD 3.1 billion in Q2 2012. The operating income amounted to USD 126.7 million or 4.67% of the net revenue compared to the operating loss of USD 470.6 million or -15.25% of the net revenue in Q2 2012.
In Q3 2012, Mechel’s consolidated net income attributable to shareholders of Mechel OAO comprised USD 54.9 million compared to the net loss of USD 823.0 million in Q2 2012. Excluding the effects of impairment of long lived assets and goodwill and provision for amounts due from related parties (net of deferred taxes related to non controlling interests) the adjusted net profit amounts to USD 132.1 million in Q3 2012.
The consolidated adjusted EBITDA in Q3 2012 decreased by 2.7% to USD 374.8 million compared to USD 385.4 million in Q2 2012. Depreciation depletion and amortization in 3Q 2012 for the Company were USD 140.8 million, a decrease of 10.4% compared to USD 157.2 million in Q2 2012.
Mr Evgeny Mikhel CEO of Mechel said that “In this accounting period, the group focused on its key strategic tasks as outlined by the Board of Directors in May. We focused our efforts on our core businesses mining and full cycle steelmaking and made significant headway in cutting costs and maximizing sales. At the same time we have taken a series of measures aimed at minimizing the impact loss-generating enterprises have on the group’s financial results. We cut down to a minimum manufacturing of those products that are unprofitable in current economic conditions and prepared for sale those assets earlier designated for divestment. Work on optimizing the company’s debt structure never stops, as demonstrated by the recent refinancing of the syndicated loan as well as several long term loans from Russian banks taken out to repay short term debt. Investment expenses are subject to ever more rigorous control. Despite the fact that programs of production cost cuts have always been in place at our enterprises, now we pay extra attention to the issue. All these measures enabled us not only to improve our profitability at the EBITDA level and achieve a net profit in the Q3 but also to demonstrate a maximum quarter operational cash flow since the Q2 of 2009.”
