Moscow, Russia – July 31, 2012 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces 1H 2012 operational results.
Production and sales for 1H 2012
Mechel OAO’s Chief Executive Officer Yevgeny Mikhel commented on the company’s 1H 2012 operational results:
“The company demonstrated stable growth of production and sales on several key points. Despite a temporary decrease of mining production at several Russian and US assets due to both technical and economic reasons, the mining segment managed to increase coal mining volumes by 7% in the first half of this year as compared to the same period last year. This became possible due to restoration and increase of mining volumes at Yakutugol Holding Company OAO’s Neryungrinsky Open Pit after the Neryungrinskaya washing plant reached full production capacity and a 1-million-tonne mining and transport complex was launched in late 2011. Sales of coking coal concentrate went up by 4%, PCI coals — by 51% and anthracites by 26%, thanks to our company’s long-term strategy of increasing production and sales of metallurgical coals.
“In the steel division, production of pig iron and steel increased by 10% and 13% in the first half of 2012 as compared to the same period last year due to increased efficiency of our equipment. Sales of rolled longs and flats went up by 4% and 12%, which became possible as Mechel Service Global’s expansive sales network was used to unload our storage reserves and release cash flow. Sales of forge-and-press products went down — stampings by 7% and forgings by 3% due to temporary decrease in production at machine- and wagon-building enterprises at our traditional markets.
“In the ferroalloys division, nickel sales went down by 5% following a weaker market. Ferrosilicon sales went down by 24% due to modernization being undertaken at Bratsk Ferroalloy Plant, which included halting and reconstructing the furnace #4, which was re-launched in March 2012. At the same time, the company managed to profit by a beneficial market situation for ferrochrome to increase production of this type of product, which led to a 53-percent increase in ferrochrome sales as compared to the same period last year.
“In the power division, cutting fuel consumption and the share of semi-constant unit expenses together with growing production had a positive impact on the segment’s figures. As a result, electricity sales went up by 6% and heat sales — by 12%.”
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.