Mechel, one of the leading Russian mining and steel groups, has announced that in the first half of this year it registered an increase of 125.6 percent in its net income to about $121 million, compared to a net loss of $471 million in the same period last year.
H1 2010 | H1 2009 | Change H1 2010/H1 2009 | |
Revenues from external customers | 4,331,284,000 | 2,460,220,000 | 76.1% |
Intersegment sales | 781,271,000 | 390,751,000 | 99.9% |
Operating income | 555,146,000 | (40,943,000) | 1,455.9% |
Net income/(loss) | 120,820,000 | (471,378,000) | 125.6% |
EBITDA | 781,031,000 | 163,755,000 | 377.0% |
"During the reported half-year period, the pricing environment in our main markets has been rather favorable, which allowed us to improve the company's operational and financial results considerably," Mechel's CEO Yevgeny Mikhel said.
Accordingly, in H1 2010, Mechel restored coal production volumes to pre-crisis levels, brought down costs in the mining segment to their normal levels, strengthened the position of the steel segment through new acquisitions and the launch of new equipment at the existing steel plants and continued geographic expansion of its distribution network.
Mechel's capital expenditure on property, plant and equipment and acquisition of mineral licenses for the first half of 2010 amounted to $508.2 million, of which $298.9 million was invested in the mining segment, $168.4 million was invested in the steel segment, and $37.5 million was invested in the ferroalloy segment. In the first half of 2010, Mechel spent $19.3 million on acquisitions, including $17.6 million spent on acquisition of minority interest in its subsidiaries.
Overall for 2010, Mechel anticipates stable results for its steel segment, despite some weakening of demand for steel products expected before the end of the year due to seasonality and other factors. As regards its mining segment, Mechel said that the current price trends for its mining products allow it to anticipate a continued strong operating performance through the remainder of this year.
As of June 30, 2010 Mechel's total debt was $6.6 billion.