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PJSC MECHEL (:MHSG) EQS-News: PJSC Mechel : Mechel Reports the 1Q 2020 Financial Results

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26/05/2020 12:30

EquityStory.RS, LLC-News: PJSC Mechel / Key word(s): Miscellaneous
PJSC Mechel : Mechel Reports the 1Q 2020 Financial Results

26.05.2020 / 13:30 MSK
The issuer is solely responsible for the content of this announcement.


MECHEL REPORTS THE 1Q 2020 FINANCIAL RESULTS

 

Consolidated revenue - 68.3 bln rubles (-9% compared to 1Q 2019)

EBITDA[*] - 12.7 bln rubles (-17% compared to 1Q 2019)

Loss attributable to equity shareholders of Mechel PAO - 36.9 bln rubles

 

Moscow, Russia - May 26, 2020 - Mechel PAO (MOEX: MTLR, NYSE: MTL), a leading Russian mining and steel group, announces financial results for the 1Q 2020.

 

Mechel PAO's Chief Executive Officer Oleg Korzhov commented:

"Consolidated EBITDA in 1Q2020 went up by 36% quarter-on-quarter. This was due to EBITDA's quarter-on-quarter increase in each of the Group's business segments. The steel division contributed the most, as its EBITDA doubled quarter-on-quarter. This dynamic became possible due to a significant growth of output and sales of rails and other types of high value-added products as well as decreased production costs as raw material prices went down.

"The mining division's results came under the influence of a persistent negative dynamics of metallurgical coal prices, but by maintaining stable coal sales and optimizing costs the division managed to demonstrate a 9% EBITDA growth quarter-on-quarter.

"After this reporting period was over, the Group underwent significant changes. In April Mechel sold its 51-percent stake in companies comprising Elga Coal Complex to A-Property OOO. At the same time, Mechel signed debt-restructuring agreements with Gazprombank and VTB Bank.

"This was a very serious step for the Group. The overall financial debt level will decrease by approximately 146 billion rubles. This will enable Mechel to improve its Net debt to EBITDA ratio, cut down debt service costs, and to release resources for further debt decrease and development of the company's production facilities."

 

Consolidated Results For The 1Q 2020

 

Mln rubles

1Q' 20

1Q' 19

%

1Q' 20

4Q' 19

%

Revenue

from contracts with external customers

68,332

74,856

-9%

68,332

68,376

0%

Operating profit

7,016

10,837

-35%

7,016

2,560

174%

EBITDA

12,690

15,322

-17%

12,690

9,361

36%

EBITDA, margin

19%

20%

 

19%

14%

 

(Loss) / profit

attributable to equity shareholders of Mechel PAO

(36,878)

11,336

-425%

(36,878)

(9,765)

278%

 

Mechel PAO's Chief Financial Officer Nelli Galeeva commented:

"Consolidated EBITDA for 1Q2020 totaled 12.7 billion rubles, which is 36% more than in 4Q2019. Loss attributable to equity shareholders of Mechel PAO amounted to 36.9 billion rubles, which is 27.1 billion rubles more than in 4Q2019 due to growth of foreign exchange losses on foreign currency liabilities as a result of significant ruble devaluation in this reporting period.

"The operating cash flow in 1Q2020 went up and reached 16 billion rubles as compared to 15.1 billion in 4Q2019, which enabled us to satisfy the Group's operational and investment needs while fulfilling our financial obligations.

 "In 1Q2020, the Group's finance costs went down by 0.5 billion rubles and reached 8.9 billion rubles as compared to 9.4 billion in 4Q2019 and by 1.2 billion from 10.1 billion in 1Q2019, due to a lower Central Bank of the Russian Federation key interest rate as well as the Group's efforts on restructuring its debt leverage and decreasing borrowing costs.

 "Interest paid in 1Q2020, including capitalized interest and lease interest, went down accordingly to reach 6.6 billion rubles, which is 0.7 billion less than in 4Q2019 (7.3 billion rubles) and 1.1 billion less than in 1Q2019 (7.7 billion rubles). As of mid-May 2020, the average debt portfolio cost is 6.4% per annum, average paid interest rate amounts to 6.3% per annum.

"The Group's net debt excluding fines and penalties on overdue amounts and options went up by 27 billion rubles as compared to December 31, 2019, and amounted to 427 billion rubles. This was due to the ruble weakening against US dollar and euro to the effect of 32.9 billion rubles, which was partly offset by net repayment of 5.7 billion rubles.

"Mostly due to the reason set out above the Net Debt to EBITDA ratio amounted to 8.4 at the end of 1Q2020 as compared to 7.5 at the end of 2019.

"In April 2020, the Group sold its 51% share in the equity capital of Elgaugol OOO, Elga-Doroga OOO and Mecheltrans-Vostok OOO to A-Property OOO. The consideration amounted to 89 billion rubles, with the buyer fully repaying Elgaugol OOO's obligations to the state development corporation VEB.RF totaling 107 million dollars (approximately 8 billion rubles).

"Renouncing the Gazprombank option to buy out a 49% share in Elgaugol OOO, Elga-Doroga OOO and Mecheltrans Vostok OOO, led to release of non-current financial liability for 49 billion rubles.

"Simultaneously with this transaction, the Group signed debt restructuring agreements with VTB Bank and Gazprombank, according to which consideration from the transaction was used for early repayment of the debt principal to VTB Bank and Gazprombank in proportion to their share in the Group's debt portfolio. According to the restructuring's key conditions, debt maturity of most of the loans by VTB Bank and Gazprombank has been extended by seven years until March 2027 with the option of further extension by three years more. Other significant conditions, including interest rates and collateral, remained unchanged.

"On May 7, 2020 the Group's key lenders - VTB Bank and Gazprombank - confirmed fulfillment of all condition precedents and loan restructuring's coming into force.

"The company's debt leverage thus decreased by a total of approximately 146 billion rubles, and the debt portfolio's structure changed and currently consists of 56% in rubles and the rest in foreign currency (US dollars and euro). The state-controlled banks' share now amounts to 86%."

 

Mining Segment

 

Coal sales to third parties in 1Q2020 remained roughly at the previous quarter's level, but continued weakening of the metallurgical coals market led to a 9% decrease in revenue from contracts with external customers. Moreover, with the 1Q2020 put into operation of Chelyabinsk Metallurgical Plant's blast furnace #4 after an overhaul the need for coke went up, and some coke volumes were redirected from sales to third parties to intra-Group consumption, which also brought down revenue from external customers.

In 1Q2020 the pace of explosive and stripping works at the Group's Yakutia mining assets somewhat slowed down. This, together with increased mining and coal sales at Yakutugol, had a positive effect on cost of sales. In addition, as the share of exports in sales to third parties decreased, selling and distribution expenses went down also. As a result, in 1Q2020 EBITDA went up by 9% quarter-on-quarter.

Revenue from contracts with external customers in 1Q2020 went down by 26% year-on-year. The division's EBITDA in 1Q2020 went down by 41% year-on-year. This was primarily due to the decline in prices for all kinds of coal products in the second half of last year, particularly for coking coal concentrate and other types of metallurgical coal. This factor was partly offset by increased sales of metallurgical coals and costs decrease as mining volumes went up.

Mechel Mining Management OOO's Chief Executive Officer Igor Khafizov noted:

"In 1Q2020 the division maintained the level of mining volumes attained in the second half of last year - over 5 million tonnes quarterly, though this quarter result decreased slightly as compared to 4Q2019 which set the record for the past three years. Coal mining stabilized at a high level as a result of measures taken in the previous periods to restore mining volumes by upgrading the mining fleet and equipment as well as bringing in contractors.

"The division demonstrated improvement of its financial results quarter-on-quarter as production costs went down, despite the coal markets' high volatility. EBITDA margin went up from 21% in 4Q2019 to 24% in 1Q2020.

"In the future, we plan to continue increasing coal and iron ore mining, as well as salable product output by acquiring new equipment and upgrading existing one. For example, we will pay additional attention to efficiency and reliability of coal washing equipment in order to meet customer quality requirements."

 

Mln rubles

1Q' 20

1Q' 19

%

1Q' 20

4Q' 19

%

Revenue

from contracts with external customers

18,082

24,545

-26%

18,082

19,768

-9%

Revenue

inter-segment

8,331

9,473

-12%

8,331

7,977

4%

EBITDA

6,461

10,986

-41%

6,461

5,921

9%

EBITDA, margin

24%

32%

 

24%

21%

 

 

Steel Segment

 

Revenue from contracts with external customers in 1Q2020 went up by 4% quarter-on-quarter due to increased sales of rails, flat products, including stainless steel flat products, and wire. At the same time, EBITDA nearly doubled in 1Q2020 quarter-on-quarter as steel product sales went up, while production costs went down.

Revenue from contracts with external customers in 1Q2020 showed a minor increase year-on-year. As prices for most of the division's products diminished, the positive effect came from a significant boost to output and sales of rails, where prices demonstrated positive dynamics. EBITDA went up by 39% in this reporting period year-on-year as production costs decreased with lower procurement prices for raw materials as well as lower selling and distribution expenses as export volumes went down.

Mechel-Steel Management Company OOO's Chief Executive Officer Andrey Ponomarev noted:

"The division's 1Q2020 financial results clearly demonstrated the efficiency of our efforts to increase output and sales of the most profitable product types. In this reporting period, with the needs of Russian Railways in mind, we increased rail sales by a third quarter-on-quarter, including doubling our rails export sales. Forgings sales went up by a half. We also increased sales of flat products by 11%, with sales of stainless flat products up by 38%. As a result, revenue from sales to third parties went up by 4% quarter-on-quarter. The decrease in prices for iron ore concentrate (including pellets), coke, ferroalloys and electrodes had a positive impact on production costs, which led to a 101% increase in EBITDA quarter-on-quarter and a 39-percent increase year-on-year. EBITDA margin reached 10%, the highest level since beginning of 2019.

"In order to maintain and increase output of high value-added product types in 2020, we will continue the extensive repair and upgrade program we began implementing last year. Our facilities also continue expanding their product range. For example, in January-April 2020 Chelyabinsk Metallurgical Plant mastered production of 27 new product types, Izhstal mastered 22, and Beloretsk Metallurgical Plant - 14 types."

 

Mln rubles

1Q' 20

1Q' 19

%

1Q' 20

4Q' 19

%

Revenue

from contracts with external customers

42,144

42,062

0%

42,144

40,559

4%

Revenue

inter-segment

1,950

1,595

22%

1,950

1,736

12%

EBITDA

4,534

3,259

39%

4,534

2,261

101%

EBITDA, margin

10%

7%

 

10%

5%

 

 

 

 

Power Segment

 

Mechel-Energo OOO's Chief Executive Officer Denis Graf noted:

"The division's 1Q2020 revenue was relatively stable both quarter-on-quarter and year-on-year. EBITDA in this reporting period nearly quadrupled year-on-year, largely due to lower power transmission costs as the volumes of electricity and capacity went down, while capacity prices on the wholesale market went up. The 37% increase in EBITDA quarter-on-quarter is caused both by the seasonal climatic factor and the increase in energy generation for intra-Group consumption."

 

Mln rubles

1Q' 20

1Q' 19

%

1Q' 20

4Q' 19

%

Revenue

from contracts with external customers

8,105

8,249

-2%

8,105

8,050

1%

Revenue

inter-segment

4,319

4,400

-2%

4,319

4,192

3%

EBITDA

921

234

294%

921

671

37%

EBITDA, margin

7%

2%

 

7%

5%

 

 

***

Alexey Lukashov

Director of Investor Relations

Mechel PAO

Phone: 7-495-221-88-88

Fax: 7-495-221-88-00

alexey.lukashov@mechel.com

***

 

Mechel is an international mining and steel company. Its products are marketed in Europe, Asia, North and South America, Africa. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its enterprises work in a single production chain, from raw materials to high value-added products.

***

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.


Attachments to the Press Release

 

Attachment A

Non-IFRS financial measures. This press release includes financial information prepared in accordance with International Financial Reporting Standards, or IFRS, as well as other financial measures referred to as non-IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for the information prepared in accordance with IFRS.

Adjusted EBITDA (EBITDA) represents profit (loss) attributable to equity shareholders of Mechel PAO before Depreciation and amortisation, Foreign exchange (gain) loss, net, Finance costs including fines and penalties on overdue loans and borrowings and lease payments, Finance income, Net result on the disposal of non-current assets, Impairment of goodwill and other non-current assets, net, Write-off of trade and other receivables, Allowance for expected credit losses on financial assets, Provision (reversal of provision) for doubtful accounts, Write-off of inventories to net realisable value, Net result on the disposal of subsidiaries, Profit (loss) attributable to non-controlling interests, Income tax expense (benefit), Effect of pension obligations, Other fines and penalties, Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term and Other one-off items. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of our Revenue. Our adjusted EBITDA may not be similar to EBITDA measures of other companies. Adjusted EBITDA is not a measurement under IFRS and should be considered in addition to, but not as a substitute for the information contained in our interim condensed consolidated statement of profit (loss) and other comprehensive income. We believe that our adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation, amortisation and impairment of goodwill and other non-current assets are considered operating expenses under IFRS, these expenses primarily represent the non-cash current period allocation of costs associated with non-current assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.

 

 

 

 

 

 

 

 

 

 

 

 

Our calculation of Net debt, excluding fines and penalties on overdue amounts**[†] is presented below:

Mln rubles

31.03.2020

31.12.2019

Current loans and borrowings, excluding interest payable, fines and penalties on overdue amounts

398,274

370,206

Interest payable

11,141

9,014

Non-current loans and borrowings

6,094

7,205

Other non-current financial liabilities

51,173

48,302

Other current financial liabilities

297

147

less Cash and cash equivalents

(6,816)

(3,509)

Net debt, excluding lease liabilities, fines and penalties on overdue amounts

460,163

431,365

 

 

 

Current lease liabilities

10,143

10,353

Non-current lease liabilities

5,938

7,002

Net debt, excluding fines and penalties on overdue amounts

476,244

448,720

EBITDA can be reconciled to our interim condensed consolidated statement of profit (loss) and other comprehensive income as follows:

 

 

Consolidated Results

 

Mining Segment ***

 

Steel Segment***

 

Power Segment***

Mln rubles

3m 2020

3m 2019

 

3m 2020

3m 2019

 

3m 2020

3m 2019

 

3m 2020

3m 2019

(Loss) profit attributable to equity shareholders of Mechel PAO

(36,878)

11,336

 

(15,520)

5,988

 

(25,262)

6,935

 

200

(220)

Add:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

3,992

3,658

 

2,066

2,069

 

1,808

1,467

 

118

122

Foreign exchange loss (gain), net

34,884

(11,979)

 

10,378

(2,611)

 

24,438

(9,350)

 

68

(18)

Finance costs including fines and penalties on overdue loans and borrowings and lease payments

8,949

10,085

 

5,436

6,247

 

3,507

3,875

 

137

164

Finance income

(353)

(232)

 

(353)

(262)

 

(122)

(163)

 

(8)

(8)

Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, net, write-off of trade and other receivables, allowance for expected credit losses on financial assets, provision (reversal of provision) for doubtful accounts and write-off of inventories to net realisable value

937

512

 

308

210

 

459

180

 

168

122

(Loss) profit attributable to non-controlling interests

(194)

378

 

(92)

180

 

(171)

197

 

70

1

Income tax expense (benefit)

713

1,131

 

3,942

(960)

 

(226)

(77)

 

77

(42)

Effect of pension obligations

35

48

 

23

40

 

11

7

 

1

1

Other fines and penalties

632

440

 

275

125

 

117

202

 

90

113

Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term

(27)

(55)

 

(2)

(40)

 

(25)

(14)

 

-

(1)

EBITDA

12,690

15,322

 

6,461

10,986

 

4,534

3,259

 

921

234

EBITDA, margin

19%

20%

 

24%

32%

 

10%

7%

 

7%

2%

 

 

Consolidated Results

 

Mining Segment ***

 

Steel Segment***

 

Power Segment***

Mln rubles

1q 2020

4q 2019

 

1q 2020

4q 2019

 

1q 2020

4q 2019

 

1q 2020

4q 2019

(Loss) profit attributable to equity shareholders of Mechel PAO

(36,878)

(9,765)

 

(15,520)

(5,232)

 

(25,262)

(96)

 

200

1,260

Add:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

3,992

3,908

 

2,066

2,216

 

1,808

1,584

 

118

108

Foreign exchange loss (gain), net

34,884

(3,352)

 

10,378

(1,366)

 

24,438

(1,981)

 

68

(5)

Finance costs including fines and penalties on overdue loans and borrowings and lease payments

8,949

9,391

 

5,436

5,833

 

3,507

3,588

 

137

164

Finance income

(353)

(66)

 

(353)

(171)

 

(122)

(82)

 

(8)

(7)

Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, net, write-off of trade and other receivables, allowance for expected credit losses on financial assets, provision (reversal of provision) for doubtful accounts and write-off of inventories to net realisable value

937

2,331

 

308

4,091

 

459

(1,519)

 

168

(240)

(Loss) profit attributable to non-controlling interests

(194)

623

 

(92)

68

 

(171)

441

 

70

116

Income tax expense (benefit)

713

5,768

 

3,942

185

 

(226)

4

 

77

293

Effect of pension obligations

35

92

 

23

63

 

11

27

 

1

1

Other fines and penalties

632

505

 

275

271

 

117

332

 

90

(1,019)

Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term

(27)

(74)

 

(2)

(37)

 

(25)

(37)

 

-

-

EBITDA

12,690

9,361

 

6,461

5,921

 

4,534

2,261

 

921

671

EBITDA, margin

19%

14%

 

24%

21%

 

10%

5%

 

7%

5%

*** including inter-segment operations

                     
                       

Income tax, deferred tax related to the consolidated group of taxpayers are not allocated to segments as they are managed on the group basis.

 

Attachment B

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT (LOSS)
AND OTHER COMPREHENSIVE INCOME for the three months ended March 31, 2020

(All amounts are in millions of Russian rubles)

 

 

 

 

 

 

 

 

Three months ended March 31,

 

Three months ended March 31,

 

 

 

2020

 

2019

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

Revenue from contracts with customers

 

68,332

 

74,856

 

Cost of sales

 

(41,758)

 

(45,248)

 

Gross profit

 

26,574

 

29,608

 

 

 

 

 

 

 

Selling and distribution expenses

 

(13,099)

 

(13,574)

 

Impairment of goodwill and other non-current assets, net

 

(85)

 

-

 

Allowance for expected credit losses on financial assets

 

(375)

 

(120)

 

Taxes other than income taxes

 

(1,477)

 

(1,137)

 

Administrative and other operating expenses

 

(4,731)

 

(4,173)

 

Other operating income

 

209

 

233

 

Total selling, distribution and operating income and (expenses), net

 

(19,558)

 

(18,771)

 

Operating profit

 

7,016

 

10,837

 

 

 

 

 

 

 

Finance income

 

353

 

232

 

Finance costs including fines and penalties on overdue loans and borrowings and lease payments

 

(8,949)

 

(10,085)

 

Foreign exchange (loss) gain, net

 

(34,884)

 

11,979

 

Share of profit of associates, net

 

-

 

7

 

Other income

 

169

 

55

 

Other expenses

 

(64)

 

(180)

 

Total other income and (expense), net

 

(43,375)

 

2,008

 

(Loss) profit before tax

 

(36,359)

 

12,845

 

 

 

 

 

 

 

Income tax expense

 

(713)

 

(1,131)

 

(Loss) profit for the period

 

(37,072)

 

11,714

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Equity shareholders of Mechel PAO

 

(36,878)

 

11,336

 

Non-controlling interests

 

(194)

 

378

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

Other comprehensive income (loss) that may be reclassified to profit or loss in subsequent periods, net of income tax:

 

2,576

 

(387)

 

Exchange differences on translation of foreign operations

 

2,576

 

(387)

 

Other comprehensive income not to be reclassified to profit or loss in subsequent periods, net of income tax:

 

94

 

14

 

Re-measurement of defined benefit plans

 

94

 

14

 

Other comprehensive income (loss) for the period, net of tax

 

2,670

 

(373)

 

Total comprehensive (loss) income for the period, net of tax

 

(34,402)

 

11,341

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Equity shareholders of Mechel PAO

 

(34,211)

 

10,963

 

Non-controlling interests

 

(191)

 

378

 

 

 

 

 

 

 
           

 

 

INTERIM CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION as of March 31, 2020

(All amounts are in millions of Russian rubles)

 

 

March 31,

2020

 

December 31, 2019

 

 

(unaudited)

 

 

 

 

 

 

 

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

178,819

 

179,264

Right-of-use assets

 

15,796

 

17,728

Mineral licenses

 

30,847

 

31,075

Goodwill and other intangible assets

 

13,762

 

13,652

Investments in associates

 

323

 

321

Deferred tax assets

 

3,476

 

3,648

Other non-current assets

 

561

 

553

Non-current financial assets

 

192

 

232

Total non-current assets

 

243,776

 

246,473

 

 

 

 

 

Current assets

 

 

 

 

Inventories

 

42,714

 

39,773

Income tax receivables

 

64

 

65

Trade and other receivables

 

22,168

 

15,340

Other current assets

 

7,538

 

6,982

Other current financial assets

 

412

 

363

Cash and cash equivalents

 

6,816

 

3,509

Total current assets

 

79,712

 

66,032

Total assets

 

323,488

 

312,505

 

 

 

 

 

Equity and liabilities

 

 

 

 

Equity

 

 

 

 

Common shares

 

4,163

 

4,163

Preferred shares

 

840

 

840

Treasury shares

 

(63)

 

(63)

Additional paid-in capital

 

24,434

 

24,434

Accumulated other comprehensive income (loss)

 

1,819

 

(848)

Accumulated deficit

 

(310,632)

 

(273,754)

Equity attributable to equity shareholders of Mechel PAO

 

(279,439)

 

(245,228)

Non-controlling interests

 

11,441

 

11,631

Total equity

 

(267,998)

 

(233,597)

 

 

 

 

 

Non-current liabilities

 

 

 

 

Loans and borrowings

 

6,094

 

7,205

Lease liabilities

 

5,938

 

7,002

Other non-current financial liabilities

 

51,173

 

48,303

Other non-current liabilities

 

272

 

105

Pension obligations

 

5,076

 

4,933

Provisions

 

4,832

 

5,238

Deferred tax liabilities

 

13,799

 

13,877

Total non-current liabilities

 

87,184

 

86,663

 

 

 

 

 

Current liabilities

 

 

 

 

Loans and borrowings, including interest payable, fines and penalties on overdue amounts of RUB 14,069 million and RUB 11,111 million as of March 31, 2020 and December 31, 2019, respectively

 

412,343

 

381,317

Trade and other payables

 

42,156

 

38,244

Lease liabilities

 

10,143

 

10,353

Income tax payable

 

9,947

 

9,161

Taxes and similar charges payable other than income tax

 

12,442

 

9,228

Advances received and other current liabilities

 

11,058

 

5,816

Other current financial liabilities 

 

297

 

147

Pension obligations

 

613

 

615

Provisions

 

5,303

 

4,558

Total current liabilities

 

504,302

 

459,439

Total liabilities

 

591,486

 

546,102

Total equity and liabilities

 

323,488

 

312,505

 

 

 

 

 

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the three months ended March 31, 2020

(All amounts are in millions of Russian rubles)

 

 

Three months ended March 31,

 

Three months ended March 31,

 

 

2020

 

2019

 

 

(unaudited)

 

(unaudited)

Cash flows from operating activities

 

 

 

 

(Loss) profit for the period

 

(37,072)

 

11,714

Adjustments to reconcile (loss) profit to net cash provided by operating activities

 

 

 

 

Depreciation of property, plant and equipment and right-of-use assets, amortisation of mineral licenses and other intangible assets

 

3,992

 

3,658

Foreign exchange loss (gain), net

 

34,884

 

(11,979)

Deferred income tax benefit

 

-

 

(822)

Changes in allowance for expected credit losses and write-off of trade and other receivables and payables, net

 

346

 

65

Write-off of inventories to net realisable value

 

376

 

291

Impairment of goodwill and other non-current assets, net and loss on write-off of noncurrent assets

 

154

 

10

Finance income

 

(353)

 

(232)

Finance costs including fines and penalties on overdue loans and borrowings and lease payments

 

8,949

 

10,085

Provisions for legal claims, taxes and other provisions

 

387

 

1,485

Other

 

30

 

123

 

 

 

 

 

Changes in working capital items

 

 

 

 

Trade and other receivables

 

(4,188)

 

(3,323)

Inventories

 

(2,060)

 

(1,850)

Trade and other payables

 

2,329

 

2,300

Advances received

 

4,584

 

224

Taxes payable and other liabilities

 

3,830

 

1,935

Other assets

 

(101)

 

851

 

 

 

 

 

Income tax paid

 

(128)

 

(522)

Net cash provided by operating activities

 

15,959

 

14,013

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Interest received

 

11

 

49

Proceeds from loans issued and other investments

 

39

 

272

Proceeds from disposals of property, plant and equipment

 

4

 

145

Purchases of property, plant and equipment

 

(1,901)

 

(1,082)

Interest paid, capitalised

 

(41)

 

(30)

Net cash used in investing activities

 

(1,888)

 

(646)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Proceeds from loans and borrowings, including proceeds from factoring arrangement of RUB 98 million and RUB 132 million for the three months ended March 31, 2020 and 2019, respectively

 

5,098

 

840

Repayment of loans and borrowings, including payments from factoring arrangement of nil and RUB 1,694 million for the three months ended March 31, 2020 and 2019, respectively

 

(10,752)

 

(4,304)

Dividends paid to non-controlling interests

 

(2)

 

(6)

Interest paid, including fines and penalties

 

(6,584)

 

(7,632)

Repayment of lease liabilities

 

(479)

 

(515)

Effect of sale and leaseback transactions

 

(11)

 

-

Deferred payments for acquisition of assets

 

(205)

 

(39)

Deferred consideration paid for the acquisition of subsidiaries in prior periods

 

-

 

(361)

Net cash used in financing activities

 

(12,935)

 

(12,017)

 

 

 

 

 

Foreign exchange loss (gain) on cash and cash equivalents, net

 

645

 

(364)

Changes in allowance for expected credit losses on cash and cash equivalents

 

5

 

5

Net increase in cash and cash equivalents

 

1,786

 

991

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

3,509

 

1,803

Cash and cash equivalents, net of overdrafts at beginning of period

 

2,867

 

380

 

 

 

 

 

Cash and cash equivalents at end of period

 

6,816

 

2,745

Cash and cash equivalents, net of overdrafts at end of period

 

4,653

 

1,371

 

 

 

There were certain reclassifications to conform with the current period presentation. These interim condensed consolidated financial statements were prepared by Mechel PAO in accordance with IFRS and have not been audited by the independent auditor. If these interim condensed consolidated financial statements are audited in the future, the audit could reveal differences in our consolidated financial results and we cannot assure that any such differences would not be material.


[*]  EBITDA - Adjusted EBITDA. Please find the calculation of the Adjusted EBITDA and other non-IFRS measures used here and hereafter in Attachment A.

**[†]  Calculations of Net debt could be differ from indicators calculated in accordance with loan agreements upon dependence on definitions in such agreements.

 



26.05.2020 MSK Dissemination of a Corporate News, transmitted by EquityStory.RS, LLC - a company of EQS Group AG.
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Language: English
Company: PJSC Mechel
1 Krasnoarmeyskaya Street, Moscow, Russia
127006 Moscow
Russia
Phone: +7 (495) 221-88-88
Fax: +7 (495) 221-88-00
E-mail: press@mechel.com
Internet: www.mechel.ru/
ISIN: US5838406081, RU000A0DKXV5
WKN: A2AC1G
Listed: Foreign Exchange(s) Moscow, NYSE
EQS News ID: 1055333

 
End of News EquityStory.RS, LLC News Service

1055333  26.05.2020 MSK

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