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MMC Norilsk Nickel's 2015 Audited Financial Results
March 20, 2016 22:28

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PJSC MMC Norilsk Nickel has demonstrated robust financial performance amidst weak commodity markets in 2015. The world’s largest refined nickel and palladium producer in the world published its IFRS report for the full year ended December 31, 2015.
“Nickel price started 2015 at approximately USD 14,900 per tonne with the market expecting a sustained price recovery as exemplified by Bloomberg analyst consensus forecast of 2015 average annual price of USD 17,850 per tonne. Contrary to consensus expectations, nickel price was in decline throughout most of the year and fell in December as low as USD 8,500 per tonne, the lowest level since 2003. The average LME nickel price in 2015 was down 30% y-o-y to USD 11,807 per tonne,” according to an official statement.
Below are the FY2015 highlights:
The world’s best portfolio of Tier 1 mining assets, management focus on stringent investment governance discipline, cost controls and efficiency improvements provided a solid base for robust financial performance amidst weak commodity markets.
· Consolidated revenue decreased 28% y-o-y to USD 8.5 billion, impacted by lower metal prices, divestiture of international assets and one-off logistical and operational preparations for the shutdown of the nickel plant in Norilsk planned for 2016.
· EBITDA was down 24% y-o-y to USD 4.3 billion, driven mainly by lower revenue.
· EBITDA margin expanded from 48% to an industry-leading 50% on the back of a 26% decrease in cash operating costs, a 40% decline in SG&A expenses and the Company’s exit from international mining assets.
· Net profit decreased 14% y-o-y to USD 1.7 billion, while net profit adjusted for non-cash items reached USD 3.2 billion.
· CAPEX increased 27% y-o-y to USD 1.7 billion driven by the execution of the downstream reconfiguration programme, accelerated development of the Skalisty underground mine, and the Bystrinsky (Chita) project having entered into an active construction phase. All major investment projects were on time and on budget.
In January 2016, the Group opened a 5-year fully unsecured syndicated USD 730 million revolving credit line with a consortium of Chinese banks and received a USD 100 million loan from ING Bank. In February 2016, the Group redeemed its rouble bonds in the amount of around USD 499 million and completed placement of a new 10-year rouble bond issue in the amount of USD 199 million.
“The 80th anniversary of Norilsk Nickel that we celebrated last year came against a strong back drop of weak commodity markets, with prices for some of our products reaching multi-year lows. This challenging year however reiterated our confidence that the strategic choice that we made 3 years ago was right,” said Vladimir Potanin, President of Norilsk Nickel.
“The focus on our world’s leading Tier-1 asset portfolio, capital investments discipline and cost controls, enabled us to withstand strong headwinds in commodity markets and generate industry leading profitability, which was importantly accompanied by an industry leading strong balance sheet,” he added.

Potanin also promised a major improvement for the residents of the city of Norilsk by completing the shutdown of the Nickel Plant by Q4 2016.  

Author: Mikhail Vesely


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