Raspadskaya reports 1H2010 IFRS financial results: Revenue increases by to US$466 m, Net Profit - US$228 m

Сентября 17, 2010

On 9 May 2010, an accident occurred at Raspadskaya mine resulting in deaths and injury to people and damage to property, plant and equipment. Raspadskaya mine has stopped its operations which severely cut its production capacity.

According to preliminary estimations, the total expenditure on the reconstruction of Raspadskaya mine will be about US$280m. This amount includes compensatory social payments, costs of fire extinguishing and pumping the water out, project works, purchase and repairs of property, plant and equipment, and preparation of coal faces.
As at 30 June 2010, the loss on disposal of property, plant and equipment damaged in the Raspadskaya mine accident was US$41m. Expenses associated with the liquidation of the consequences of the accident amounted to US$20 m.
The significant YoY growth in the Company’s revenue and Adjusted Net Profit was mainly due to efficient production and sales operations of the Company, and beneficial sales prices.
In 1H2010, cash cost of coal concentrate production was US$23.9 per tonne. The dynamics of the cost were affected mainly by a return of production expenses to pre-crisis levels and, starting May 2010, by a drop in production volumes.
Net Debt of the Company dropped from US$122 m at 31 December 2009 to US$6 m at 30 June 2010.
Raspadskaya’s CEO, Gennady Kozovoy, commented on 1H2010 results:
“A big human tragedy occurred. We commiserate with the families and loved ones of our deceased colleagues and rescuers and continue moving toward our main goal – finding the missing miners.
Till the end of the year, we have a large amount of work to do at Raspadskaya mine. We continue to pump the water out of the flooded areas of the mine. Since 18 August, the pumping has followed an established schedule. By the middle of September a project for the extinguishing of the fire has been prepared. The project is passing authorization from MChS and RosTechNadzor.
While the work on liquidation of the consequences of the accident and the reconstruction process progress, we have prepared a project to recommence the operation of the longwall ‘4-9-21bis’ in 4Q2010 and handed it to RosGlavExpertise to obtain an approval.
After getting an approval of all the projects for a step-by-step recommencement of Raspadskaya mine operation by RosGlavExpertise and RosTechNadzor, we will be ready to announce future production plans for all our mines.
In 1H2010, we significantly increased volumes of sales to the Asian market (China, Republic of Korea) – their share in our total sales volumes was 23%. However, after the accident, we have focused on sales to Russian customers only – at present, we sell to eight Russian plants.
In addition, we started selling coking coals of the K and KO (hard coking) grades from Koksovaya mine acquired in April 2010.
Based on 1H2010 results, the Company maintains a level of liquidity sufficient to continue both its operation and reconstruction of the Raspadskaya mine.”