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Mechel Reports 1Q2013 Operational Results

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MOSCOW, May 13, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), one of the leading Russian mining and metals companies, announces 1Q2013 operational results.

Production and sales for 1Q2013

Production:

Product name

1Q2013,
thousand
tonnes
4Q2012,
thousand
tonnes
1Q2013 vs.
4Q2012, %
1Q2013,
thousand
tonnes
1Q2012,
thousand
tonnes
1Q2013 vs.
1Q2012, %
Coal (run-of-mine) 6,406 6,970 -8 6,406 6,413 0
Pig iron 972 1,054 -8 972 1,023 -5
Steel 1,300 1,430 -9 1,300 1,655 -21

Sales:

Product name

1Q2013,
thousand
tonnes
4Q2012,
thousand
tonnes
1Q2013 vs.
4Q2012, %
1Q2013,
thousand
tonnes
1Q2012,
thousand
tonnes
1Q2013 vs.
1Q2012, %
Coking coal concentrate 2,843 2,513 +13 2,843 3,181 -11
Including coking coal concentrate supplied to Mechel enterprises 613 640 -4 613 628 -2
PCI 817 725 +13 817 503 +62
Anthracites 541 453 +19 541 614 -12
Including anthracites supplied to Mechel enterprises 4 25 -86 4 58 -94
Steam coal 1,551 1,420 +9 1,551 1,504 +3
Including steam coal supplied to Mechel enterprises 427 419 +2 427 355 +20
Iron ore concentrate 1,039 1,171 -11 1,039 1,118 -7
Including iron ore concentrate supplied to Mechel enterprises 5 12 -53 5 150 -96
Coke 796 854 -7 796 889 -10
Including coke supplied to Mechel enterprises 519 546 -5 519 669 -22
Nickel 0 0.5 0 0 4.2 0
Including nickel supplied to Mechel enterprises 0 0 0 0 0.6 0
Ferrosilicon 22.8 22 +6 22.8 18.0 +27
Including ferrosilicon supplied to Mechel enterprises 8.4 7.6 +10 8.4 7.2 +16
Chrome 10.1 17 -40 10.1 17.2 -41
Including chrome supplied to Mechel enterprises 1.4 2 -1 1.4 2.5 -43
Flat products 185 184 +1 185 214 -14
Including those produced by third parties 94 94 0 94 141 -34
Long products 841 966 -13 841 937 -10
Including those produced by third parties 233 242 -4 233 196 +19
Billets 355 652 -46 355 540 -34
Including those produced by third parties 88 130 -33 88 268 -67
Hardware and welded mesh 204 239 -15 204 213 -5
Including those produced by third parties 12 17 -28 12 11 +18
Forgings 19 18 +3 19 18 +5
Stampings 25 28 -10 25 28 -10
Electric power generation (thousand kWh) 1,194,337 1,175,399 +2 1,194,337 1,213,029 -2
Heat power generation (Gcal) 2,723,119 2,536,507 +7 2,723,119 3,202,981 -15

Mechel OAO's Chief Executive Officer Evgeny Mikhel commented on the company's 1Q2013 results:

"In 1Q2013, we have had an expected decrease in coal production compared to 4Q2012 due to less favorable conditions of open pit mining in cold winter months. At the same time, a certain improvement in the metallurgical coal market, which we could see since the beginning of this year, and our company's efforts aimed at expanding its client base enabled us to significantly boost our sales of coking coal, anthracites and PCI both internationally, primarily to Asia Pacific, and domestically, including supplies from Mechel Bluestone, which resumed operations early this year, to North America's market. As a whole, coking coal sales in 1Q2013 increased by 13% compared to 4Q2012, anthracite sales increased by 19% and PCI sales by 13%. Steam coal sales also went up by 9% compared to the previous quarter, which is primarily due to increased supplies to the Group's power enterprises, especially Southern Kuzbass Power Plant, which increased electricity generation due to seasonal factors.

"In the steel division, in 1Q2013 there was a decrease of sales on several counts, which was due to the measures taken to optimize production in view of steel product markets' seasonal weakness, primarily the long rolls market, as well as disposal of Mechel's steelmaking plants in Romania. Lower billet sales were due to the halting of Donetsk Electrometallurgical Plant.

"Ferrosilicon sales went up compared to 4Q2012 figures. Positive dynamics were due to repairs and launching of a furnace at Bratsk Ferroalloy Plant. A decrease in chrome sales was due to a planned production decrease at Tikhvin Ferroalloy Plant caused by a weaker market. Throughout the first quarter, the plant operated two furnaces out of four. Nickel was not produced due to the halting of Southern Urals Nickel Plant in late 2012 caused by unfavorable market conditions.

"The power division's enterprises maintained their production results in 1Q2013 on the level of last year's figures. A small decrease in results as compared to 1Q2012 was due to Mechel-Energo disposing of some power assets, primarily Toplofikatsia Rousse EAD. Also climate conditions were milder in this period compared to the same period last year, which have had their effect."

Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.

All production and sales figures are preliminary and may be adjusted. 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.

CONTACT: Mechel OAO Anton Lapin Tel: + 7 495 221 88 88 antonlapin@mechel.ru

Source:Mechel OAO