Russian mining and steel group Mechel has announced its consolidated financial results for the first quarter of the current year, posting a net profit of RUB 3.29 billion ($53.55 million), down 76 percent compared to the first quarter of the previous year.
In the first quarter this year, Mechel's sales revenues amounted to RUB 74.85 billion ($1.21 billion), declining by three percent year on year. Mechel's steel segment revenues increased by five percent to RUB 44.23 billion ($719.23 million), while its mining segment revenues decreased by 19 percent to RUB 22.72 billion ($369.45 million), both on year-on-year basis.
The company stated that in the given quarter its mining division’s results were weaker both year-on-year and quarter-on-quarter. The main reason for this was the decrease in sales volumes of the division’s products, particularly coking coal concentrate, which fell by 19 percent year on year and by 18 percent compared to the previous quarter. Mechel also stated that, despite a seasonal decrease in Russia’s construction market in the first quarter, prices in this reporting period were fairly stable and generally profitable for its steel division. In the second quarter, the company expects the market for construction steel products to become stronger as business activity picks up and export parity prices go up.
Additionally, Mechel produced 1.05 million mt of crude steel in the given quarter, falling by six percent, while its pig iron output also decreased by six percent, to 985,000 mt, both year on year. Mechel's run-of-mine coal production in the first quarter declined by two percent to 4.95 million mt compared to the corresponding quarter of 2017.