MMC Norilsk Nickel | 17 October 2011 г. | 11:52

MMC Norilsk Nickel announced financial results for the 1H 2011

MMC Norilsk Nickel announced financial results for the 1H 2011

MMC Norilsk Nickel, JSC and its subsidiaries hereby presents unaudited financial results for the 1H 2011, prepared in accordance with International Financial Reporting Standards.

SALES REVENUE

In the first six months of 2011 revenue of the Group increased by 24% as compared to six months of 2010, and amounted to USD 7 355 million.

Revenue from metal sales increased by 24% as compared to six months of 2010, and amounted to USD 6956 million. The key reason for this growth was the increase in market prices for precious and base metals produced by the Group. In the reporting period revenue from metal sales increased (nickel and copper) by 20% to USD 867 million and amounted to USD 5 180 million. Precious metal sales (Palladium, Platinum and Gold) increased by USD 485 million (or 38%) and amounted to USD 1 776 million.

COST OF SALES

Cost of metals sold increased by 22%, from USD 2 224 million in the first six months of 2010 to USD 2 715 million in the reporting period. The main factor which contributed to the growth was the increase in expenses on acquisition of refined metal, PGM scrap and other semi-products.

The key reasons for the growth in cash operating costs of USD 485 million in the 1H of 2011 were:
•13% increase, relates to growing expenses on acquisition of refined metal, PGM scrap and other semi-products; purchasing of metals is attributed to expanded production facilities of the Group, including facilities in Finland with a goal to receive additional net income;
• 7% increase, relates to expenditures not including expenses on acquisition of refined metal, PGM scrap and other semi-products;
• 4% increase, relates to effect of translation to presentation currency;
• Decrease of USD 19 million (or 1%), due to growth in sales of by-product metals.

Incorporating measures aimed at efficient cost management, the Company contained the growth of costs within 7% compared to the costs for the first six months of 2010, which in absolute figures is USD 158 million.

In the first half of 2011 labor costs amounted to USD 729 million and increased by 23%, compared to the first half of 2010.

Staff growth in Russian Group companies associated mainly with an increase in mining and processing in the Polar Division and Kola MMC, as well as with the increase in own production of goods and services. The staff growth contributed to reduction in costs of third-party services. In the first half of 2011 expenditures on services from third parties decreased by USD 1 million and amounted to USD 272 million.

Revenue from sales of by-product metals in the first half of2011 increased by USD 19 million as compared to the first half of 2010 and amounted to USD 230 million.

Profit from continuing operations for the first half of 2011 increased by USD 49 million (or 2%) and amounted to USD 2,378 million, as compared to USD 2,329 million for the similar period in 2010.

Net profit for the first six months of 2011 decreased by USD 527 million (or 22%) and amounted to USD 1 818 million, as compared to USD 2 345 million for the first half of 2010. The net profit reduction was caused by a loss on discontinued operations related to disposal of OGK-3 shares, amounting to USD 560 million.

Source: metal supply & sales
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