Mechel update mining segment result for H1 2010
H1'10 H1'09 Change
Revenue 1,286,668 723,438 77.90%
Intersegment sales 386,642 160,395 141.10%
Operating income 468,673 66,037 609.70%
Net income 240,539 -17,576 1468.60%
EBITDA 586,200 161,753 262.40%
(In thousand USD)
Mining segment’s revenue from external customers for the first half of 2010 totaled USD 1.3 billion or 29.7% of the consolidated net revenue, an increase of 77.9% over net segment’s revenue from external customers of USD 723.4 million or 29.4% of the consolidated net revenue in the first half of 2009.
The operating income in the mining segment in the first half of 2010 increased by 609.7% to USD 468.7 million, or 28.0% of total segment’s revenue, compared to the operating income of USD 66.0 million or 7.5% of total segment revenue for the first half of 2009. The EBITDA in the mining segment in the first half of 2010 went up by 262.4% and amounted to USD 586.2 million compared to segment EBITDA of USD 161.8 million in the first half of 2009.
The EBITDA margin for the mining segment in the first half of 2010 was 35.03% compared to 18.30% in the first half of 2009. Depreciation, depletion and amortization in the mining segment amounted to USD 141.5 million that is 56.9% higher than USD 90.2 million in the first half of 2009.
Mr Boris Nikishichev CEO of Mechel Mining Management Company commented on the mining segment’s results that “Targeted increase in production volumes and prices growth in the first half of 2010 coupled with our efforts to produce higher value-added types of coals, such as anthracites and PCI, used in steel production, eventually crystallized in the positive dynamics of the mining segment’s financial performance.
In the first quarter we were actively accelerating coal production by intensifying stripping works and equipment reparation. Consequently in the second quarter we achieved 2008 production volumes. Beginning from there group’s monthly production volumes were continuously exceeding pre-crisis levels. Simultaneously we managed to decrease production costs to their normalized levels.
We continue with the implementation of our key investment projects. Elga Coal Deposit development and construction of Ulak-Elga railway track remain the priority project in the mining segment. By the end of the year we intend to begin mining first volumes of coal there. We also continue construction of the second stage of Sibirginsk mine of Southern Kuzbass Coal Company, upon completion of which the mine’s production volumes should reach 2.4 million tonnes per annum.
Current price trends for our mining products allow us to anticipate continued strong operating performance of the segment through the remainder of this year.”
Monday, October 11, 2010
Mechel Mining update segment results H1 2010
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