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Mechel Reports the 1Q 2017 Financial Results

Consolidated revenue 77.4 bln rubles, EBITDA* - 22.8 bln rubles
Net profit, attributable to equity shareholders of Mechel PAO 13.9 bln rubles

MOSCOW, May 31, 2017 (GLOBE NEWSWIRE) -- Mechel PAO (MOEX:MTLR) (NYSE:MTL), a leading Russian mining and steel group, announces financial results for the 1Q 2017.

Mechel PAO’s Chief Executive Officer Oleg Korzhov commented:

“In the first quarter of 2017 the Group showed good financial results. Favorable price trends had their positive impact. Even though spot prices for premium coking coal went down from the heights they reached in the fourth quarter of 2016 to $150-170 per tonne by mid-quarter, the first quarter’s contract prices were higher than in the fourth quarter of 2016, which enabled us to retain average prices at a high level. Thanks to this situation, our mining segment managed to achieve an observable growth of EBITDA.

“At the same time, for our steel segment which produces primarily construction range products, the first quarter is traditionally the time of weaker demand and lower prices. High prices for coal and iron ore, which support our mining segment’s results, contributed to production cost growth of our steel segment. As a result, even though revenue was only 2% lower quarter-on-quarter, the steel segment’s EBITDA declined by half.

“In total our consolidated revenue was 77.4 billion rubles for the reporting period, which is 3% less than in the fourth quarter of 2016, while EBITDA went down by 7% and reached 22.8 billion rubles. At the same time, our net profit attributable to equity shareholders of Mechel PAO for the first quarter went up by nearly nine times, reaching 13.9 billion rubles.”

Consolidated Results For The 1Q 2017

Mln rubles1Q’ 171Q’ 16%1Q’ 174Q’ 16%
Revenue
from external customers
77,414 62,232 24%77,414 79,659 -3%
Operating profit18,089 6,333 186%18,089 13,929 30%
EBITDA 22,806 9,974 129%22,806 24,593 -7%
EBITDA, margin29%16% 29%31%
Net profit
attributable to equity shareholders of Mechel PAO
13,902 312 13,902 1,579

* EBITDA - Adjusted EBITDA. Please find the calculation of the Adjusted EBITDA and other non-IFRS measures used here and hereafter in Attachment A.

Mining Segment

Mechel Mining Management Company OOO’s Chief Executive Officer Pavel Shtark noted:

“In the first quarter of 2017 the segment demonstrated an improvement in financial results if compared with the fourth quarter of 2016, with EBITDA up by 11%, EBITDA margin reaching 49%. It became possible due to a good price trend on seaborne coal markets. The growth of iron ore prices, which continued in the first quarter, also helped to improve our financial results.

“In this reporting period, our facilities slightly decreased its coal mining volumes in comparison with previous quarter due to intensification of the stripping works to prepare reserves. Also the decrease of volumes in the first quarter was affected by seasonality of climatic conditions that requires more efforts in equipment maintenance. The decrease in supplies of coking coal concentrate to third parties was partly due to the fact that we have again re-directed some of our coal volumes for internal use as export market prices became less attractive. At the same time, we increased shipments of PCI and anthracites, primarily to our Asian customers.

“We used the beneficial economic situation to boost the technical reequipment of our facilities. In the first quarter, Yakutugol put into operation an EKG-18 excavator and a Liebherr R 9200 excavator. In the second quarter, we plan to put into operation one more excavator. To maintain our mining capacity, in 2017 we plan to acquire and put into service more than 20 new vehicles such as trucks, bulldozers and other equipment at both Yakutugol and the Elga deposit. This year, we plan to complete construction and launch a run-of-mine coal crushing facility with a 2.3-million-tonne capacity at Elga. As a result we will ensure the stability of mining volumes and recovery of mining volumes where they temporarily decreased.”

Mln rubles1Q’ 171Q’ 16%1Q’ 174Q’ 16%
Revenue
from external customers
27,988 19,857 41%27,988 29,657 -6%
Revenue
inter-segment
12,465 7,059 77%12,465 9,426 32%
EBITDA 19,956 6,606 202%19,956 17,905 11%
EBITDA, margin49%25% 49%46%

Steel Segment

Mechel-Steel Management Company OOO’s Chief Executive Officer Andrey Ponomarev noted:

“In the first quarter of this year our segment demonstrated robust performance. A small decrease in long steel sales was mostly seasonal and was due to a decrease in construction activity in the winter period. We expect that those products for construction industry that have not been sold in the first quarter due to weak demand and respective weak prices will be sold in the next periods at higher prices when the construction season picks up. In the first quarter sales of high-margin products, such as stampings and forgings, went up, as well as sales of flat steel, which was partly due to an extension of our product range and gaining new markets.

“Our revenue in the first quarter of 2017 remained on the level of the previous quarter. The 51% decrease of our EBITDA was due to the growth of production costs conditioned by high prices for input raw materials.

“The main tendencies that characterized our segment’s operations last year, remain in force at the beginning of the current year. We continue to increase the capacity utilization of Chelyabinsk Metallurgical Plant’s universal rolling mill, to master new competitive types of products at all of our facilities and to upgrade our equipment.”

Mln rubles1Q’ 171Q’ 16%1Q’ 174Q’ 16%
Revenue
from external customers
42,029 35,148 20%42,029 42,739 -2%
Revenue
inter-segment
1,964 1,892 4%1,964 1,958 0%
EBITDA 3,556 1,653 115%3,556 7,327 -51%
EBITDA, margin8%4% 8%16%

Power Segment

Mechel-Energo OOO’s Chief Executive Officer Petr Pashnin noted:

“In the first quarter of 2017, we saw the seasonal hike in consumption of all our segment products in comparison with the fourth quarter of 2016, and as a result, the increase in heat and electricity generation. The main factor was lower outside temperature. The increase in electricity generation was affected by the completion of repairs of the boiler equipment at Southern Kuzbass Power Plant. The financial results of the first quarter of 2017 improved accordingly quarter-on-quarter.”

Mln rubles1Q’ 171Q’ 16%1Q’ 174Q’ 16%
Revenue
from external customers
7,396 7,228 2%7,396 7,263 2%
Revenue
inter-segment
4,638 4,237 9%4,638 4,480 4%
EBITDA 705 1,644 -57%705 (440)
EBITDA, margin6%14% 6%-4%

The management of Mechel will host a conference call today at 18:00 p.m. Moscow time (4:00 p.m. London time, 11 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.

Mechel is an international mining and steel company. Its products are marketed in Europe, Asia, North and South America, and 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 1Q 2017 Financial results 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 net profit (loss) attributable to equity shareholders of Mechel PAO before Depreciation and depletion, Foreign exchange (gain) loss, 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, (Reversal of provision) provision for doubtful accounts, Write-off of inventories to net realisable value, Loss (profit) after tax from discontinued operations, net, 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 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). 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 interest expenses, depreciation and depletion 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.

Adjusted net profit (loss) represents net profit (loss) attributable to equity shareholders of Mechel PAO before Impairment of goodwill and other non-current assets, Loss (profit) after tax from discontinued operations, net, Net result on the disposal of subsidiaries, Effect on loss attributable to non-controlling interests, Foreign exchange (gain) loss, net, Pension service cost and actuarial loss, other related expenses, Other fines and penalties, Gain on write-off of accounts payable with expired legal term and Other one-off items. Our adjusted net profit (loss) may not be similar to adjusted net profit (loss) measures of other companies. Adjusted net profit (loss) 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). We believe that our adjusted net profit (loss) provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations. While impairment of goodwill and other non-current assets is considered operating expenses under IFRS, these expenses represent the non-cash current period allocation of costs associated with assets acquired or constructed in prior periods. Our adjusted net profit (loss) calculation is 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 calculations of Net debt, excluding fines and penalties on overdue amounts** and trade working capital are presented below:

Mln rubles31.03.2017 31.12.2016
Interest-bearing loans and borrowings, excluding interest, fines and penalties on overdue amounts386,507 395,571
Interest payable17,131 16,916
Non-current interest-bearing loans and borrowings10,727 11,644
Other non-current financial liabilities37,201 36,197
Other current financial liabilities613 -
less Cash and cash equivalents(2,888)(1,689)

Net debt, excluding finance lease liabilities, fines and penalties

on overdue amounts
449,291 458,639
Finance lease liabilities, current portion3,302 10,175
Finance lease liabilities, non-current portion6,266 421

Net debt, excluding fines and penalties on overdue amounts
458,859 469,235
Mln rubles31.03.2017 31.12.2016
Trade and other receivables23,175 19,054
Inventories36,467 35,227
Other current assets7,284 6,942
Income tax receivables425 686

Trade current assets
67,351 61,909
Trade and other payables39,125 40,985
Advances received3,641 3,815
Provisions and other current liabilities3,530 3,515
Taxes and similar charges payable other than income tax9,914 9,195
Income tax payable2,949 2,552
Trade current liabilities59,159 60,062
Trade working capital8,192 1,847

** Calculations of Net debt could be different from indicators calculated in accordance with loan agreements upon dependence on definitions in such agreements.


EBITDA can be reconciled to our interim condensed consolidated statement of profit (loss) as follows:

Consolidated Results Mining Segment *** Steel Segment*** Power Segment***
Mln rubles1Q 20171Q 2016 1Q 20171Q 2016 1Q 20171Q 2016 1Q 20171Q 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO13,902 312 12,858 (1,515) 2,218 748 237 1,009
Add:
Depreciation and depletion3,417 2,922 1,928 1,671 1,379 1,162 110 89
Foreign exchange (gain) loss, net(9,679)(8,568) (5,601)(4,925) (4,063)(3,586) (14)(57)
Finance costs, including fines and penalties on overdue loans and borrowings and finance lease payments12,392 13,915 9,062 10,327 3,626 3,782 231 317
Finance income(127)(455) (488)(740) (154)(212) (13)(15)
Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, write-off of accounts receivable, (reversal of provision) provision for doubtful accounts and write-off of inventories to net realisable value577 644 173 125 298 292 106 227
Loss (profit) after tax from discontinued operations, net- 136 - (44) - 170 - 10
Net result on the disposal of subsidiaries- (58) - - - (58) - -
Profit (loss) attributable to non-controlling interests556 171 392 117 162 (1) 3 55
Income tax expense (benefit)1,539 817 1,433 1,496 68 (715) 38 36
Pension service cost and actuarial loss, other related expenses32 41 25 30 6 10 1 1
Other fines and penalties226 119 174 65 44 82 7 (28)
Gain on write-off of accounts payable with expired legal term(29)(22) - (1) (28)(21) (1)-
Adjusted EBITDA22,806 9,974 19,956 6,606 3,556 1,653 705 1,644
EBITDA, margin29%16% 49%25% 8%4% 6%14%
Mln rubles1Q 20171Q 2016 1Q 20171Q 2016 1Q 20171Q 2016 1Q 20171Q 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO13,902 312 12,858 (1,515) 2,218 748 237 1,009
Add:
Loss (profit) after tax from discontinued operations, net- 136 - (44) - 170 - 10
Net result on the disposal of subsidiaries- (58) - - - (58) - -
Effect on loss attributable to non-controlling interests- (24) - - - (24) - -
Foreign exchange (gain) loss, net(9,679)(8,568) (5,601)(4,925) (4,063)(3,586) (14)(57)
Pension service cost and actuarial loss, other related expenses32 41 25 30 6 10 1 1
Other fines and penalties226 119 174 65 44 82 7 (28)
Gain on write-off of accounts payable with expired legal term(29)(22) - (1) (28)(21) (1)-
Adjusted net profit (loss), net of income tax 4,452 (8,064) 7,456 (6,390) (1,823)(2,679) 230 935
Operating profit18,089 6,333 17,256 4,751 1,767 142 478 1,369
Add:
Loss on write-off of property, plant and equipment71 7 35 5 5 2 31 -
Pension service cost and actuarial loss, other related expenses32 41 25 30 6 10 1 1
Other fines and penalties226 119 174 65 44 82 7 (28)
Adjusted operating profit18,418 6,500 17,490 4,851 1,822 236 517 1,342
*** including inter-segment operations
Consolidated Results Mining Segment *** Steel Segment*** Power Segment***
Mln rubles1Q 20174Q 2016 1Q 20174Q 2016 1Q 20174Q 2016 1Q 20174Q 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO13,902 1,579 12,858 4,232 2,218 (1,652) 237 (801)
Add:
Depreciation and depletion3,417 3,692 1,928 2,099 1,379 1,488 110 105
Foreign exchange (gain) loss, net(9,679)(6,209) (5,601)(3,240) (4,063)(2,954) (14)(15)
Finance costs, including fines and penalties on overdue loans and borrowings and finance lease payments12,392 10,993 9,062 7,211 3,626 4,199 231 272
Finance income(127)2,787 (488)1,477 (154)622 (13)(1)
Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, write-offs of accounts receivable, (reversal of provision) provision for doubtful accounts and write-offs of inventories to net realisable value577 6,629 173 1,752 298 5,000 106 (124)
Loss after tax from discontinued operations, net- 84 - 84 - - - -
Net result on the disposal of subsidiaries- (3) - - - (3) - -
Profit attributable to non-controlling interests556 551 392 214 162 320 3 17
Income tax expense1,539 2,471 1,433 2,325 68 100 38 46
Pension service cost and actuarial loss, other related expenses32 (295) 25 (289) 6 (6) 1 -
Other fines and penalties226 549 174 237 44 250 7 62
Gain on write-off of accounts payable with expired legal term(29)(54) - (16) (28)(37) (1)(1)
Other one-off items- 1,819 - 1,819 - - - -
Adjusted EBITDA22,806 24,593 19,956 17,905 3,556 7,327 705 (440)
EBITDA, margin29%31% 49%46% 8%16% 6%-4%
Mln rubles1Q 20174Q 2016 1Q 20174Q 2016 1Q 20174Q 2016 1Q 20174Q 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO13,902 1,579 12,858 4,232 2,218 (1,652) 237 (801)
Add:
Impairment of goodwill and other non-current assets- 4,828 - 962 - 3,866 - -
Loss after tax from discontinued operations, net- 84 - 84 - - - -
Net result on the disposal of subsidiaries- (3) - - - (3) - -
Effect on loss attributable to non-controlling interests- (48) - - - (48) - -
Foreign exchange (gain) loss, net(9,679)(6,209) (5,601)(3,240) (4,063)(2,954) (14)(15)
Pension service cost and actuarial loss, other related expenses32 (295) 25 (289) 6 (6) 1 -
Other fines and penalties226 549 174 237 44 250 7 62
Gain on write-off of accounts payable with expired legal term(29)(54) - (16) (28)(37) (1)(1)
Other one-off items- 1,819 - 1,819 - - - -
Adjusted net profit (loss), net of income tax 4,452 2,251 7,456 3,789 (1,823)(583) 230 (755)
Operating profit (loss)18,089 13,929 17,256 14,096 1,767 535 478 (506)
Add:
Impairment of goodwill and other non-current assets- 4,828 - 962 - 3,866 - -
Loss on write-off of property, plant and equipment71 1,649 35 570 5 1,079 31 1
Pension service cost and actuarial loss, other related expenses32 (295) 25 (289) 6 (6) 1 -
Other fines and penalties226 549 174 237 44 250 7 62
Other one-off items- 1,819 - 1,819 - - - -
Adjusted operating profit (loss)18,418 22,479 17,490 17,395 1,822 5,724 517 (443)
*** including inter-segment operations


Attachment B

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS)
(All amounts are in millions of Russian rubles) 3 months ended March 31,
2017 2016
(unaudited) (unaudited)
Continuing operations
Revenue 77,414 62,232
Cost of sales (40,429) (35,919)
Gross profit 36,985 26,313
Selling and distribution expenses (14,071) (14,178)
Loss on write-off of property, plant and equipment (71) (7)
Reversal of provision (provision) for doubtful accounts 54 (150)
Taxes other than income taxes (1,201) (1,495)
Administrative and other operating expenses (3,842) (4,331)
Other operating income 235 181
Total selling, distribution and operating income and (expenses), net (18,896) (19,980)
Operating profit 18,089 6,333
Finance income 127 455
Finance costs including fines and penalties on overdue loans and borrowings and finance leases payments of RUB 306 million, RUB 2,916 million for the 3 months ended March 31, 2017 and 2016, respectively (12,392) (13,914)
Foreign exchange gain (loss), net 9,679 8,568
Share of profit of associates, net of provision 5 6
Other income 533 84
Other expenses (44) (96)
Total other income and (expense), net (2,092) (4,897)
Income before tax from continuing operations 15,997 1,436
Income tax expense (1,539) (817)
Income for the period from continuing operations 14,458 619
Discontinued operations
Loss after tax for the period from discontinued operations, net - (136)
Profit for the period 14,458 483
Attributable to:
Equity shareholders of Mechel PAO 13,902 312
Non-controlling interests 556 171
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in subsequent periods, net of income tax: 824 337
Exchange differences on translation of foreign operations 823 337
Net gain on available for sale financial assets 1 -
Other comprehensive income for the period, net of tax 824 337
Total comprehensive income, net of tax 15,282 820
Attributable to:
Equity shareholders of Mechel PAO 14,726 651
Non-controlling interests 556 169


INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(All amounts are in millions of Russian rubles)
March 31, 2017 December 31, 2016
(unaudited)
Assets
Current assets
Cash and cash equivalents 2,888 1,689
Trade and other receivables 23,175 19,054
Inventories 36,467 35,227
Income tax receivables 425 686
Other current financial assets 36 167
Other current assets 7,284 6,942
Total current assets 70,275 63,765
Non-current assets
Property, plant and equipment 203,142 204,353
Mineral licenses 35,710 36,099
Non-current financial assets 213 235
Investments in associates 264 265
Deferred tax assets 1,508 1,502
Goodwill 18,324 18,355
Other non-current assets 839 891
Total non-current assets 260,000 261,700
Total assets 330,275 325,465
Equity and liabilities
Current liabilities
Interest-bearing loans and borrowings, including interest payable, fines and penalties on overdue amounts of RUB 38,329 million and RUB 38,594 million as of March 31, 2017 and December 31, 2016, respectively 424,837 434,165
Trade and other payables 39,125 40,985
Advances received 3,641 3,815
Provisions 3,503 3,496
Pension obligations 975 944
Finance lease liabilities 3,302 10,175
Income tax payable 2,949 2,552
Taxes and similar charges payable other than income tax 9,914 9,195
Other current financial liabilities 613 -
Other current liabilities 27 19
Total current liabilities 488,886 505,346
Non-current liabilities
Interest-bearing loans and borrowings 10,727 11,644
Provisions 3,502 3,420
Pension obligations 3,435 3,501
Finance lease liabilities 6,266 421
Deferred tax liabilities 16,660 16,282
Other non-current liabilities 154 159
Other non-current financial liabilities 37,814 36,740
Income tax payable 135 540
Total non-current liabilities 78,693 72,707
Total liabilities 567,579 578,053
Equity
Common shares 4,163 4,163
Preferred shares 833 833
Additional paid-in capital 28,326 28,326
Accumulated other comprehensive income 1,672 848
Accumulated deficit (280,540) (294,444)
Equity attributable to equity shareholders of Mechel PAO (245,546) (260,274)
Non-controlling interests 8,242 7,686
Total equity (237,304) (252,588)
Total equity and liabilities 330,275 325,465


INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts are in millions of Russian rubles) 3 months ended March 31,
2017 2016
(unaudited) (unaudited) ****
Cash Flows from Operating Activities
Profit for the period 14,458 483
Loss after tax for the period from discontinued operations, net - (136)
Income for the period from continuing operations 14,458 619
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities:
Depreciation 3,002 2,511
Depletion and amortization 415 411
Foreign exchange gain (loss), net (9,679) (8,568)
Deferred income taxes 350 821
(Reversal of provision) provision for doubtful accounts (54) 150
Write-off of accounts receivable 33 30
Write-off of inventories to net realisable value 504 443
Revision in estimated cash flows of rehabilitation provision - (23)
Loss on write-off of property, plant and equipment 71 7
Loss on sale of property, plant and equipment 23 51
Gain on write-off of accounts payable with expired legal term (29) (22)
Pension service cost and actuarial loss, other related expenses 32 41
Finance income (127) (455)
Finance costs, including fines and penalties on overdue loans and borrowings and finance lease payments 12,392 13,915
Royalty and other payments associated with disposal of Bluestone (462) (10)
Other 27 2
Changes in working capital items:
Trade and other receivables (4,911) (4,987)
Inventories (2,196) 657
Trade and other payables (403) 1,282
Advances received (112) 542
Taxes payable and other current liabilities 1,911 2,066
Other current assets (303) (503)
Income tax paid (916) (269)
Net operating cash flows from discontinued operations - (184)
Net cash from operating activities 14,026 8,527
Cash Flows from Investing Activities
Loans issued and other investments - (4)
Interest received 58 -
Proceeds from disposal of subsidiaries 82 2
Royalty and other payments associated with disposal of Bluestone 462 10
Proceeds from loans issued 142 11
Proceeds from disposals of property, plant and equipment 41 92
Purchases of property, plant and equipment (971) (585)
Interest paid, capitalized (98) (178)
Net cash used in investing activities (284) (652)
Cash Flows from Financing Activities
Proceeds from loans and borrowings 6,023 1,626
Repayment of loans and borrowings (10,924) (2,793)
Interest paid, including fines and penalties (7,786) (6,000)
Repayment of obligations under finance lease (1,116) (190)
Installments for acquition of assets (82) -
Deferred consideration paid for the acquisition of subsidiaries in prior periods (890) (1,409)
Net cash used in financing activities (14,775) (8,766)
Effect of exchange rate changes on cash and cash equivalents 481 (373)
Net decrease in cash and cash equivalents (552) (1,264)
Cash and cash equivalents at beginning of period 1,689 3,079
Cash and cash equivalents net of overdrafts at beginning of period 1,453 891
Cash and cash equivalents at end of period 2,888 1,933
Cash and cash equivalents net of overdrafts at end of period 901 (373)

****there were certain reclassifications to conform with the current period presentation

Alexey Lukashov Director of Investor Relations Mechel PAO Phone: 7-495-221-88-88 Fax: 7-495-221-88-00 alexey.lukashov@mechel.com

Source: Mechel PAO