Higher coal prices help Russia’s Mechel swing to Q3 net profit
Russian coal and steel producer Mechel said on Tuesday higher prices for its products had helped it swing into a net profit in the third quarter after a loss a year earlier.
Higher coal prices has been supporting Mechel, which borrowed heavily before Russia’s economic crisis took hold in 2014 and then struggled to keep up debt repayments.
The company, controlled by businessman Igor Zyuzin, has restructured the bulk of its debt since then but is yet to start major debt repayments.
It said its July-September net profit was 6.1 billion roubles ($105 million) compared with a net loss of 2.8 billion roubles in the same period a year earlier.
“Prices for our coal products remain comfortable both domestically and internationally,” Chief Executive Oleg Korzhov said in a statement.
“The steel product market, which was weak in the first half of this year, went back to normal by mid-year due to growing steel prices and stabilisation of costs for raw materials for steelmaking,” he added.
Mechel said its third-quarter revenue rose 11 percent year-on-year to 73.4 billion roubles, while earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 19 percent to 18.9 billion roubles.
Its net debt, excluding fines and penalties on overdue amounts, was 463.8 billion roubles ($7.9 billion) at the end of September, broadly unchanged from the start of 2017.
Mechel said earlier on Tuesday that its January-September coal production fell, while its third-quarter sales of coking coal concentrate were affected by an unsteady supply of wagons caused by a lack of railway stock in the Russian Railways network.
Source: Reuters (Reporting by Anastasia Lyrchikova; Writing by Polina Devitt; Editing by Katya Golubkova and Andrew Heavens)