Page 163 - RusRPTDec21

given the broadly flat volumes this would further contribute to the company's margin expansion.
Interim dividends possible for 9mo21. There was no word of a decision on whether to pay interim dividends for 9mo21, though management plans to discuss this with the BoD at the end of the month or in early December. Assuming a 100% FCF payout, we calculate that the dividend yield might total 6-7%, which corresponds to what NLMK has announced for 3Q21.
Evraz considers Moscow Exchange listing. Management stated during the call that it is considering listing Evraz shares on the Moscow Exchange. However, given Evraz is a UK company and is already included on the MSCI UK, we do not see the potential for material inflows from passive investors from such a move.
Mechel released 3Q21 IFRS results. The results were weak q/q, despite the favorable pricing environment.
Revenue was $1.4bn – down 5% q/q, but up 60% y/y
EBITDA was $434mn – down 4% q/q, but up 3.4x y/y
Adjusted Net Income rose 5.4x q/q to c$276mn vs negative $39mn in 3Q20
Profit attributable to Mechel’s equity shareholders in 3Q21 fell 11% q/q to $290mn (Rb21.3bn)
Net debt (excluding fines and penalties on overdue amounts) fell just 1% q/q and 4% y/y to $4bn
Annualized Net Debt to EBITDA was 2.3x in 3Q21
In 3Q21, CapEx was $21mn vs depreciation of $41mn, thus the company is still underinvested
Total coal sales fell 18% q/q and 27% y/y to 2.36mt
Total steel products sales declined 16% q/q and 11% y/y to 817kt.
Mechel released 3Q21 Operating Results. The company’s total coal and steel sales fell both q/q and y/y.
Total raw coal production was down 1% q/q and 31% y/y to 2.93mt Coking coal concentrate sales also plunged 30% q/q and 26% y/y to 1mt, as mining volumes at Neryungrinsky open pit fell due to tough geological conditions
PCI sales were flat q/q at 322kt – still 36% lower y/y
Anthracite sales fell by 1% q/q to 345kt (up 12% y/y)
Steam coal sales shrank by 10% q/q and 36% y/y to 643kt, as 2Q21 sales involved accumulated stocks, which were almost exhausted in the quarter
Iron ore sales were down 11% q/q and 39% y/y to 367kt, due to repairs at Korshunov mining plant’s washing facility, which accumulated major ore stockpiles to be processed in the next reporting periods
Crude steel production rose by 2% q/q and 5% y/y to 891kt in 3Q21 Steel product sales fell 16% q/q and 11% y/y to 817kt. 3Q21 saw lower prices for rolled steel, as demand from construction and other industries slumped and consumers formed sufficient inventories in 2Q21
Ferrosilicon sales also fell 14% q/q to 18kt due to planned repairs at
163 RUSSIA Country Report December 2021 www.intellinews.com