Mechel Reports the FY2019 Financial Results

Consolidated revenue -296.6bln rubles(-5% compared toFY2018)

EBITDA[*]-53.4bln rubles(-29% compared to FY2018)

Profitattributable to equity shareholders of Mechel PAO -2.4bln rubles

MOSCOW, RUSSIA / ACCESSWIRE / March 19, 2020 / Mechel PAO (MOEX:MTLR)(NYSE:MTL), a leading Russian mining and steel group, announces financial results for the FY2019.

Mechel PAO’s Chief Executive Officer Oleg Korzhov commented:

“Consolidated EBITDA for 2019 went down by 29% as compared to 2018. The key factor in that was the decrease in the steel segment’s EBITDA due to steel product output and sales reduction as Chelyabinsk Metallurgical Plant implemented a large-scale facility upgrade. It should be noted that these measures on modernizationof our facilities on a short-term horizon will have an undisputedly positive effect on both the output volumes and profitability. For instance, the capacity of the upgraded blast furnace and converter that were put into operation last week will go up 15% following the re-equipment. Moreover, the ecological measures that were part of those repairs will allow to minimize these facilities’ impact on the environment. Further efforts in this direction, which will continue in 2020, will enable us to expand our product range, improve both its quality and environmental characteristics.

“The mining division’s financial results were primarily hit by the negative dynamics of the metallurgical coals market. The decrease in coal mining volumes in the first half of last year, following the overstocking at the end of 2018, also had its impact. At the same time, in 2019 we implemented the program of renewing and restoring our mining equipment and managed to attain high mining levels by the year’s end. The fourth quarter’s results are the highest since 2016. As the division maintains those high levels and continues to improve them, it will be able to yield good results even as the markets remain volatile.

“The cashflow generated by the company enables us to meet our obligations on debt servicing and partly repay our debts. Nevertheless, it will not be enough to keep up with the repayment schedule set by our current loan agreements. We are actively negotiating with our major lenders regarding repayment schedule changes and expect to sign restructuring agreements with banks in the next few months.”

Consolidated Results ForTheFull Year 2019

Mln rubles
  FY 2019     FY 2018     %     4Q’ 19     3Q’ 19     %  
Revenue
from contracts with external customers
    296,567       312,574       -5 %     68,376       74,865       -9 %
Operating profit
    31,498       49,780       -37 %     2,560       8,179       -69 %
EBITDA
    53,428       75,667       -29 %     9,361       13,720       -32 %
EBITDA, margin
    18 %     24 %             14 %     18 %        
Profit / (loss)
attributable to equity shareholders of Mechel PAO
    2,409       12,628       -81 %     (9,765 )     (571 )     1610 %

Mechel PAO’s Chief Financial Officer NelliGaleyeva commented:

“Consolidated EBITDA for 2019 totaled 53.4 billion rubles. Profit attributable to equity shareholders of Mechel PAO went down by 10.2 billion rubles year-on-year and reached 2.4 billion rubles in 2019. The dynamics of this indicator was largely due to the gross profit’s decrease by 26.1 billion rubles as revenue from sales to third parties decreased while cost of sales went up. The effect was offset by the growth of foreign exchange gains on foreign currency obligations due to the ruble strengthened against US dollar and euro in the reporting period.

“The operating cash flow in 2019 went down by 10.4 billion rubles to 57.7 billion rubles from 68.1 billion rubles as compared to 2018, and slightly decreased to 15.1 billion rubles in 4Q2019 as compared to 15.8 billion rubles in 3Q2019.

“In 2019, the Group’s finance costs went down by 3.2 billion rubles or 8% as compared to 2018, which was due to a lower Central Bank of the Russian Federation key interest rate and other floating rates, as well as the Group’s efforts on restructuring its debt leverage and decreasing borrowing costs. In 4Q2019, financecosts went down by 0.1 billion rubles to 9.4 billion rubles as compared to 9.5 billion rubles in 3Q2019, which also corresponds to the Central Bank of the Russian Federation key interest rate decrease.

“Interest paid in 4Q2019, including capitalized interest and lease interest, totaled 7.3 billion rubles, which corresponds to the average quarterly value of this indicator. Interest paid in 2019, including capitalized interest and lease interest, totaled 31.2 billion rubles, which is 2.5 billion or 8% less than in 2018 when it totaled 33.7 billion rubles.

“In November 2019, Sberbanktransferred to VTBBank its rights to debt payment on the loan granted to the Group’s subsidiaries- Chelyabinsk Metallurgical Plant, Southern Kuzbass Coal Company and Bratsk Ferroalloy Plant – for a total of 49 billion rubles, excluding the interest in arrears penalty of 552 million rubles, which may be called for in 2022 and which Sberbank remains entitled to.

“The Group’s net debt excluding fines and penalties on overdue loans and borrowings and optionswent down by 23 billion rubles as compared to December 31, 2018, and amounted to 400 billion rubles. This was due to the ruble strengthening against US dollar and euro, as well as the repayment of 20.8 billion rubles of debt, which was partly offset by new loans totaling 7.6 billion rubles, as well as increased lease obligations in accordance with IFRS 16 Leases.

“The Net Debt to EBITDA ratio amounted to 7.5 at the end of 2019 as compared to 5.6 at the end of 2018. This figure grew due to EBITDA decrease.”

Mining Segment

Revenue from contracts with external customers in 2019 went down by 4% as compared to 2018. This was due to a coal prices decrease at both domestic and international markets, which was partly offset by an increase in sales volumes. Revenue in 4Q2019 went down by 16% quarter-on-quarter both due to lower prices and a decrease in coking coal concentrate sales to third parties as some coal volumes were redirected to intra-group consumption. At the same time, coking coal concentrate sales grew year-on-year.

The division’s EBITDA in 2019 went down by 14% year-on-year as prices for coking coal and other metallurgical coals decreased, as well as due to growth of production costs as the volume of explosive and stripping works increased. EBITDA’s 44-percent decrease in 4Q2019 quarter-on-quarter was due to negative price dynamics for the division’s nearly entire product range, as well as the decrease in sales of coking coal concentrate, steam coal and coke to third parties.

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

“Last year we continued with large-scale effort to restore our mining volumes. If we compare the overall 2019 mining results with the previous year’s, the growth was minimal. At the same time, coal mining in 4Q2019 reached 5.4 million tonnes, which is the highest quarterly result over the last three years. Southern Kuzbass Coal Company was the key contributor here, as it reached a monthly mining level of 1 million tonnes in October and successfully maintains this level.

“Stripping works at our mining division’s coal facilities went up by 19% year-on-year. We managed to attain this due to implementing investment programs on upgrading our equipment and automobile pool, as well as bringing in contractors. Thanks to those stripping efforts, we expect a stable growth of coal output in mid-term.

“We also managed to dramatically improve results at Korshunov Mining Plant, where iron ore concentrate’s output in 2019 went up by 24% as compared to 2018.

“Despite our success in restoring output, this accounting period also included factors that had a negative impact on our financial dynamics. Last year was characterized by negative price trends on metallurgical coal markets that grew stronger by the year’s end. Considering the growth of costs as high levels of stripping works were conducted, this led to increased production costs of products sold, and that in its turn led to decreased profit margins. Moreover, in 4Q2019 coal sales came under pressure from limitations specific for the winter period and shipping conventions in the direction of Russia’s Far East ports.”

Mln rubles
  FY 2019     FY 2018     %     4Q’ 19     3Q’ 19     %  
Revenue
from contracts with external customers
    92,996       96,882       -4 %     19,768       23,425       -16 %
Revenue
inter-segment
    37,710       37,549       0 %     7,977       10,002       -20 %
EBITDA
    39,085       45,516       -14 %     5,921       10,590       -44 %
EBITDA, margin
    30 %     34 %             21 %     32 %        

Steel Segment

Revenue from contracts with external customers in 2019 went down by 7% year-on-year, and by 11% in 4Q2019 quarter-on-quarter. This was due to corrections of steel product output and sales as the division’s facilities conducted major repairs of their equipment. Chelyabinsk Metallurgical Plant’s revamping of blast furnace #4 and replacement of converter #1 was the key factor.

The division’s EBITDA in 2019 went down by 54% year-on-year. The key factors contributing to this were the decrease in steel output and sales as well as increased production costs as iron ore prices went up. EBITDA for 4Q2019 went down by 26% quarter-on-quarter due to a decrease in sales and the seasonal decline in prices for construction products.

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

“The division’s operations in 2019 were characterized by a significant volume of running and major repairs at our production facilities. This inevitably affected our operational results and steel product sales. At the same time, these measures will enable us in the future to improve our equipment’s reliability and product quality, bring down relative costs and our operations’ negative impact on the environment. Last week, Chelyabinsk Metallurgical Plant put into operation its blast furnace #4 and converter #1 after reconstruction.Furthermore,intheendofMarchatBratskFerroalloyPlantweplantolaunch ore thermal furnace # 3. Itsreconstructionwasperformedsimultaneouslywith steelmaking capacities repairs at Chelyabinsk Metallurgical Plant.

“The market situation had less impact on the division’s financial results than sales volumes. Average prices for rebar and hardware which make up half of our shipments, went down by 1-2% year-on-year. At the same time, average rail prices went up by more than 10%, partly due to increased rail export share. Average sale prices for stainless longand flatproducts, as well as stampings, also demonstrated positive dynamics.

“Despite an overall decrease in production volumes, last year we increased and maintained output of those products whose sales yielded high margins. Thus we more than tripled production of stainless flats year-on-year, increased rail sales by 15% and by 2% – other sections produced by Chelyabinsk Metallurgical Plant’s universal rolling mill.

“In order to maintain stable output on our facilities and to expand our product range, we plan a series of equipment repairs and upgrades for 2020. This includes an upgrade of mills in Chelyabinsk Metallurgical Plant’s rolling workshop #1 to launch production of heat-strengthened rebar of various diameters. We have acquired and are installing equipment for production and repairs of rolls used for output of sections and rails at Chelyabinsk Metallurgical Plant’s universal rolling mill. Izhstal has scheduled measures aimed at expanding the size range for its round-section rolls and increasing output of hot-rolled products with surface treatment. As part of the steel wire rope facility upgrade investment project, Beloretsk Metallurgical Plant intends to acquire and launch two beltgrindingequipment lines and four modern drawing mills.”

Mln rubles
  FY 2019     FY 2018     %     4Q’ 19     3Q’ 19     %  
Revenue
from contracts with external customers
    174,850       187,918       -7 %     40,559       45,479       -11 %
Revenue
inter-segment
    6,107       5,865       4 %     1,736       1,335       30 %
EBITDA
    12,956       27,990       -54 %     2,261       3,060       -26 %
EBITDA, margin
    7 %     14 %             5 %     7 %        

Power Segment

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

“The division’s 3% revenue growth in 2019 year-on-year was due to both increase in electricity sales on the bulk market and regulated contracts, and increase in electricity and capacity prices. At the same time, the growth in cost of sales, due to increased prices for raw materials, limited EBITDA’s dynamics, so this indicator remained unchanged year-on-year.

“Improved financial results in 4Q2019 quarter-on-quarter was due to seasonal factors as the heating season set in and electricity consumption increased in the winter period.”

Mln rubles
  FY 2019     FY 2018     %     4Q’ 19     3Q’ 19     %  
Revenue
from contracts with external customers
    28,721       27,774       3 %     8,050       5,960       35 %
Revenue
inter-segment
    15,606       15,471       1 %     4,192       3,349       25 %
EBITDA
    1,545       1,546       0 %     671       593       13 %
EBITDA, margin
    3 %     4 %             5 %     6 %        

***

Alexey Lukashov
Director of Investor Relations
Mechel PAO
Phone: 7-495-221-88-88
Fax: 7-495-221-88-00
[email protected]

***

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-IFRSfinancial measures. This press release includes financial information prepared in accordance withInternational 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 andamortisation, Foreign exchange(gain) loss, net, Finance costs including fines and penalties on overdue loans and borrowings andlease 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 tonon-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 termand 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 IFRSand should be considered in addition to, but not as a substitute for the information contained inourconsolidated 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. Whiledepreciation,amortisationand impairment of goodwill and other non-current assets are considered operating expenses underIFRS, 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:

Mlnrubles
    31.12.2019       31.12.2018  
Current loans and borrowings, excluding interest payable, fines and penalties on overdue amounts
    370,206       402,417  
Interestpayable
    9,014       7,749  
Non-current loans and borrowings
    7,205       6,538  
Other non-current financial liabilities
    48,303       44,510  
Othercurrentfinancialliabilities
    147        
less Cash and cash equivalents
    (3,509 )     (1,803 )
Net debt, excluding lease liabilities, fines and penalties on overdue amounts
    431,366       459,411  
 
               
Currentleaseliabilities
    10,353       5,880  
Non-currentleaseliabilities
    7,002       2,413  
Net debt, excluding fines and penalties on overdue amounts
    448,721       467,704  

EBITDA can be reconciled toourconsolidated statement of profit (loss) and other comprehensive income as follows:

 
 
Consolidated Results

   
Mining Segment ***

   
Steel Segment***

   
Power Segment***

 
Mlnrubles
    12m 2019       12m 2018       12m 2019       12m 2018       12m 2019       12m 2018       12m 2019       12m 2018  
Profit (loss) attributable to equity shareholders of Mechel PAO
    2,409       12,628       4,253       11,304       5,938       693       351       (2,631 )
Add:
                                                               
Depreciationandamortisation
    15,176       13,859       8,541       7,621       6,153       5,738       482       500  
Foreign exchange (gain) loss, net
    (19,241 )     25,775       (4,376 )     10,771       (14,841 )     14,969       (24 )     37  
Finance costs including fines and penalties on overdue loans and borrowings and lease payments
    38,830       42,052       24,131       29,153       14,839       13,825       653       581  
Financeincome
    (600 )     (34,056 )     (911 )     (24,458 )     (450 )     (9,874 )     (31 )     (1,231 )
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
    4,896       10,146       5,885       4,796       (1,006 )     1,846       18       3,504  
Net result on the disposal of subsidiaries
          (3 )           (3 )                        
Profit attributable to non-controlling interests
    1,876       908       701       183       996       637       180       87  
Incometaxexpense (benefit)
    7,987       2,681       93       5,940       503       (531 )     333       (83 )
Effectofpensionobligations
    235       548       184       515       47       30       4       4  
Otherfinesandpenalties
    2,027       1,554       667       (15 )     859       788       (419 )     781  
Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term
    (167 )     (425 )     (83 )     (291 )     (82 )     (131 )     (2 )     (3 )
EBITDA
    53,428       75,667       39,085       45,516       12,956       27,990       1,545       1,546  
EBITDA, margin
    18 %     24 %     30 %     34 %     7 %     14 %     3 %     4 %

 

 
 
Consolidated Results

   
Mining Segment ***

   
Steel Segment***

   
Power Segment***

 
Mlnrubles
    4q 2019       3q 2019       4q 2019       3q 2019       4q 2019       3q 2019       4q 2019       3q 2019  
(Loss) profit attributable to equity shareholders of Mechel PAO
    (9,765 )     (571 )     (5,232 )     (146 )     (96 )     (886 )     1,260       55  
Add:
                                                               
Depreciationandamortisation
    3,908       4,085       2,216       2,314       1,584       1,637       108       134  
Foreign exchange (gain) loss, net
    (3,352 )     (1,259 )     (1,366 )     545       (1,981 )     (1,805 )     (5 )     1  
Finance costs including fines and penalties on overdue loans and borrowings and lease payments
    9,391       9,450       5,833       5,793       3,588       3,699       164       158  
Financeincome
    (66 )     (44 )     (171 )     (129 )     (82 )     (106 )     (7 )     (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
    2,331       1,141       4,091       1,238       (1,519 )     53       (240 )     (150 )
Profit attributable to non-controlling interests
    623       564       68       248       441       188       116       128  
Incometaxexpense
    5,768       51       185       574       4       286       293       118  
Effectofpensionobligations
    92       41       63       34       27       6       1       1  
Otherfinesandpenalties
    505       285       271       123       332       6       (1,019 )     157  
Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term
    (74 )     (23 )     (37 )     (4 )     (37 )     (18 )           (1 )
EBITDA
    9,361       13,720       5,921       10,590       2,261       3,060       671       593  
EBITDA, margin
    14 %     18 %     21 %     32 %     5 %     7 %     5 %     6 %
*** includinginter-segmentoperations
                                                               

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

CONSOLIDATED STATEMENT OF PROFIT (LOSS)
AND OTHER COMPREHENSIVE INCOME
for the year ended December 31, 2019

(All amounts are in millions of Russian rubles, unless stated otherwise)

 
  Year ended December 31,     Year ended December 31,  
 
  2019     2018  
 
           
 
           
Revenue from contracts with customers
    296,567       312,574  
Costofsales
    (187,857 )     (177,756 )
Grossprofit
    108,710       134,818  
Sellinganddistributionexpenses
    (54,320 )     (54,988 )
Impairment of goodwill and other non-current assets, net
    (1,804 )     (7,222 )
Allowance for expected credit losses on financial assets
    (235 )     (940 )
Taxes other than income taxes
    (5,282 )     (4,834 )
Administrative and other operating expenses
    (16,316 )     (18,765 )
Otheroperatingincome
    745       1,711  
Total selling, distribution and operating income and (expenses), net
    (77,212 )     (85,038 )
Operating profit
    31,498       49,780  
 
               
Financeincome
    600       34,056  
Finance costs including fines and penalties on overdue loans and borrowings and lease payments
    (38,830 )     (42,052 )
Foreign exchange gain (loss), net
    19,241       (25,775 )
Share of profit of associates, net
    28       10  
Otherincome
    239       512  
Otherexpenses
    (504 )     (314 )
Total other income and (expense), net
    (19,226 )     (33,563 )
Profitbeforetax
    12,272       16,217  
 
               
Incometaxexpense
    (7,987 )     (2,681 )
Profitfortheperiod
    4,285       13,536  
 
               
Attributableto:
               
Equity shareholders of Mechel PAO
    2,409       12,628  
Non-controllinginterests
    1,876       908  
 
               
Othercomprehensiveincome
               
Other comprehensive (loss) income that may be reclassified to profit orloss in subsequent periods, net of income tax:
    (1,771 )     (9 )
Exchange differences on translation of foreign operations
    (1,771 )     (9 )
Other comprehensive income (loss) not to be reclassified to profit orloss in subsequent periods, net of income tax:
    (867 )     487  
Re-measurement of defined benefit plans
    (867 )     487  
Other comprehensive (loss) income for the period, net of tax
    (2,638 )     478  
Total comprehensive income for the period, net of tax
    1,647       14,014  
 
               
Attributableto:
               
Equity shareholders of Mechel PAO
    (210 )     13,096  
Non-controllinginterests
    1,857       918  
 
               
Earningspershare
               
Weighted average number of common shares
    416,256,510       416,270,745  
Earnings per share (Russian rubles per share) attributable to common equity shareholders, basic and diluted
    5.79       30.34  

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as of December 31, 2019
(All amounts are in millions of Russian rubles)

 
 
December 31, 2019
 
December 31, 2018
 
 
 
 
 
Assets
 
 
 
 
Non-currentassets
 
 
 
 
Property, plantandequipment
 
196,992
 
189,879
Minerallicenses
 
31,075
 
32,068
Goodwill and other intangible assets
 
13,652
 
16,883
Investmentsinassociates
 
321
 
293
Deferredtaxassets
 
3,648
 
5,488
Othernon-currentassets
 
553
 
630
Non-currentfinancialassets
 
232
 
244
Totalnon-currentassets
 
246,473
 
245,485
 
 
 
 
 
Currentassets
 
 
 
 
Inventories
 
39,773
 
43,423
Incometaxreceivables
 
65
 
121
Tradeandotherreceivables
 
15,340
 
17,612
Othercurrentassets
 
6,982
 
8,673
Othercurrentfinancialassets
 
363
 
508
Cashandcashequivalents
 
3,509
 
1,803
Totalcurrentassets
 
66,032
 
72,140
Totalassets
 
312,505
 
317,625
 
 
 
 
 
Equityandliabilities
 
 
 
 
Equity
 
 
 
 
Commonshares
 
4,163
 
4,163
Preferredshares
 
840
 
833
Treasuryshares
 
(63)
 
Additionalpaid-incapital
 
24,434
 
24,378
Accumulated other comprehensive (loss) income
 
(848)
 
1,771
Accumulateddeficit
 
(273,754)
 
(274,186)
Equity attributable to equity shareholders of Mechel PAO
 
(245,228)
 
(243,041)
Non-controllinginterests
 
11,631
 
9,846
Totalequity
 
(233,597)
 
(233,195)
 
 
 
 
 
Non-currentliabilities
 
 
 
 
Loansandborrowings
 
7,205
 
6,538
Leaseliabilities
 
7,002
 
2,413
Other non-current financial liabilities
 
48,303
 
44,510
Othernon-currentliabilities
 
105
 
120
Pensionobligations
 
4,933
 
3,819
Provisions
 
5,238
 
3,719
Deferredtaxliabilities
 
13,877
 
13,506
Totalnon-currentliabilities
 
86,663
 
74,625
 
 
 
 
 
Currentliabilities
 
 
 
 
Loans and borrowings, including interest payable, fines and penalties on overdue amounts of RUB 11,111 million and RUB 9,877 million as of December 31, 2019 and 2018, respectively
 
381,317
 
412,294
Tradeandotherpayables
 
38,391
 
34,800
Leaseliabilities
 
10,353
 
5,880
Incometaxpayable
 
9,161
 
6,425
Taxes and similar charges payable other than income tax
 
9,228
 
6,106
Advances received and other current liabilities
 
5,816
 
5,096
Pensionobligations
 
615
 
772
Provisions
 
4,558
 
4,822
Totalcurrentliabilities
 
459,439
 
476,195
Totalliabilities
 
546,102
 
550,820
Totalequityandliabilities
 
312,505
 
317,625

 

CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended December 31, 2019

(All amounts are in millions of Russian rubles)

 
 
Year ended December 31,
 
Year ended December 31,
 
 
2019
 
2018
Cash flows from operating activities
 
 
 
 
Profitfortheperiod
 
4,285
 
13,536
Adjustments to reconcile profit to net cash provided by operating activities
 
 
 
 
Depreciation of property, plant and equipment and amortisation of mineral licenses andother intangible assets
 
15,176
 
13,859
Foreign exchange (gain) loss, net
 
(19,241)
 
25,775
Deferred income tax expense (benefit)
 
2,288
 
(2,596)
Changes in allowance for expected credit losses and write-off of trade and other receivables and payables, net
 
73
 
517
Write-off of inventories to net realisable value
 
1,763
 
1,162
Impairment of goodwill and other non-current assets, net and loss on write-off of non‑current assets
 
2,880
 
7,953
Financeincome
 
(600)
 
(34,056)
Finance costs including fines and penalties on overdue loans and borrowings and leasepayments
 
38,830
 
42,052
Provisions for legal claims, taxes and other provisions
 
3,630
 
4,940
Other
 
198
 
575
 
 
 
 
 
Changes in working capital items
 
 
 
 
Tradeandotherreceivables
 
1,546
 
1,354
Inventories
 
(1,511)
 
(7,858)
Tradeandotherpayables
 
4,037
 
4,150
Advancesreceived
 
650
 
485
Taxes payable and other liabilities
 
5,151
 
683
Otherassets
 
1,238
 
(851)
 
 
 
 
 
Incometaxpaid
 
(2,735)
 
(3,562)
Net cash provided by operating activities
 
57,658
 
68,118
 
 
 
 
 
Cash flows from investing activities
 
 
 
 
Interestreceived
 
76
 
188
Royalty and other proceeds associated with disposal of subsidiaries
 
17
 
3
Proceeds from loans issued and other investments
 
313
 
9
Proceeds from disposals of property, plant and equipment
 
211
 
215
Purchases of property, plant and equipment
 
(6,282)
 
(5,472)
Purchasesofintangibleassets
 
 
(150)
Interestpaid, capitalised
 
(256)
 
(440)
Net cash used in investing activities
 
(5,921)
 
(5,647)
 
 
 
 
 
Cash flows from financing activities
 
 
 
 
Proceeds from loans and borrowings, including proceeds from factoring arrangement of RUB214million and RUB918 millionfor the periods ended December 31, 2019 and 2018, respectively
 
7,599
 
76,504
Repayment of loans and borrowings, including payments from factoring arrangement of RUB2,222million and RUB435 millionfor the periods ended December 31, 2019 and 2018, respectively
 
(20,772)
 
(97,269)
Repayment of other current financial liabilities
 
 
(442)
Dividends paid to shareholders of Mechel PAO
 
(1,515)
 
(1,386)
Dividends paid to non-controlling interests
 
(16)
 
(8)
Interest paid, including fines and penalties
 
(30,923)
 
(33,308)
Repaymentofleaseliabilities
 
(2,276)
 
(2,780)
Effect of sale and leaseback transactions
 
248
 
Deferred payments for acquisition of assets
 
(341)
 
(629)
Deferred consideration paid for the acquisition of subsidiaries in prior periods
 
(361)
 
(3,968)
Net cash used in financing activities
 
(48,357)
 
(63,286)
 
 
 
 
 
Foreign exchange (gain) loss on cash and cash equivalents, net
 
(891)
 
63
Changes in allowance for expected credit losses on cash and cash equivalents
 
(2)
 
(91)
Net increase (decrease) in cash and cash equivalents
 
2,487
 
(843)
 
 
 
 
 
Cash and cash equivalents at beginning of period
 
1,803
 
2,452
Cash and cash equivalents, net of overdrafts atbeginning of period
 
380
 
1,223
 
 
 
 
 
Cash and cash equivalents at end of period
 
3,509
 
1,803
Cash and cash equivalents, net of overdrafts at end of period
 
2,867
 
380

There were certain reclassifications to conform with the current period presentation.


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

**[†]CalculationsofNetdebtcould bedifferfromindicatorscalculatedin accordance with loan agreements upon dependence on definitionsin such agreements.

SOURCE: PJSC Mechel

View source version on accesswire.com:
https://www.accesswire.com/581580/Mechel-Reports-the-FY2019-Financial-Results

error: Content is protected !!