Page 182 - RusRPTSept21

Russian metals major Norilsk Nickel posted 33% year on year rise in revenues in 1H21 to $8.9bn under IFRS, with EBITDA soaring 210% y/y to $5.7bn and net income jumping 292% y/y to $4bn. The results have beaten consensus expectations by 4%-8%. However, the dynamics were weaker as compared to 2H20.
Previously this year the company that faced numerous ESG problems in the past two years has updated its 2030 strategy and ESG plans.
For 2H20, results were weak h/h, as expected, but slightly ahead of expectations and consensus, BCS Global Markets commented on August 6 seeing the results as mildly positive and affirming a Buy call on NorNickel shares.
In 2H21, the 15% export duties on nickel and copper should be partly offset by improved production and sales as operations at the flooded mines resume, BCS GM believes, referring to recent floods at Taimirsky mine.
The company now expects the Taimirsky mine only to return to full capacity by November, although it originally planned to get to full capacity by the end of June. Despite that, the company reiterated its 2021 production guidance.
NorNickel aims to produce 0.19mn-0.2mn tonnes of nickel, 0.335mn-0.355kmn tonnes of copper (Norilsk Division) and 65,000-70,000 tonnes at Bystrinsky GOK, 2.35mn-2.41mn ounces of palladium and 0.58mn-0.64mn ounces of platinum. The above guidance implies a 15-21% y/y decrease for base metal output (ex-Bystrinsky GOK) and an 8-17% y/y decrease for PGMs.
"We think it [the output guidance] remains achievable, with some upside risk to the PGMs [Platinum Group Metals] guidance," VTB Capital wrote. As followed by bne IntelliNews, the PGMs portfolio of the company is seen as supporting its investment case, given global trends toward cleaner transport and use of PGMs in electric vehicle (EV) batteries.
Commenting on the latest ESG pressure from Russian authorities, the company believes that the amount of damages claimed by the Federal Agency for Fishery at RUB58.7bn ($803mn) is overstated. After completing the analysis of the lawsuit, management plans to defend the company’s position in court and provide its calculation of damages.
At the same time NorNickel expects its capital expenditures to rise to $4bn annually to 2022-2025, up from $3bn in 2021. due to
182 RUSSIA Country Report September 2021 www.intellinews.com