News and events

23 May 2016

Kuzbasskaya Toplivnaya CompanyPJSC Reports First Quarter2016Financial Results

Title

KEMEROVO, Russian Federation—May23, 20161:00 PM(UTC +8:00)—Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK), one of the largest producers and exporters of thermal coal in Russia, today announced unaudited interim consolidated financial results under IFRS for the first quarter ended March31,2015.

Financial highlights

in millions of RUB Q1 2016 Q4 2015 Chg. Q1 2015 Chg.1
Revenue 6 343 7 318 -13% 6 013 5,5%
Cost of sales 5 417 6 197 -13% 4 685 16%
Gross profit 926 1 121 -17,4% 1 328 -30%
Gross profit margin 14,6% 15,3% -0,7 п.п. 22,1% -7,5 п.п.
Selling, general and administrative expenses 619 683 -9% 616 -0,5%
Operating profit 307 438 -30% 712 -57%
Operating profit margin 4,8% 6,0% -1,2 п.п. 11,8% -7,0 п.п.

EBITDA2

649 702 -7,5% 952 -32%
EBITDA margin 10,2% 9,6% 0,6 п.п. 15,8% -5,6 п.п.
EBITDA per tonne, RUB 233 233 - 331 -29,6%
Net profit 148 -97 - 258 -43%
Net profit margin 2,3% - - 4,3% -2,0 п.п.

Revenue

Revenue for the first quarter of 2016grew by 5.5% compared to the year-ago quarter, toRUB6, 343 million, 13% lower than in the fourth quarter of 2015.

Cost of sales and expenses

The cost of sales has dropped by 13% to the level of the fourth quarter and increased by 16% compared with the figure for the same period last year.

Selling, general and administrative expenses remained approximately at the level of the first quarter and decreased by 9% compared to the fourth quarter of last year.

Operating profit and EBITDA

In the first quarter of 2016 the company showed an operating profit of RUB 307 million,30% lower than in the fourth quarter of 2015 and 57% less than in the first quarter of 2015.Gross profit fell by 17% over the fourth-quarter result, to RUB 926 million, a decrease of 30% compared to the year-ago quarter

EBITDA reached RUB 649 million, showing a7.5%quarterly decrease and falling by 32% compared to the first quarter of 2015.

Net profit

The Company shows a net profit of RUB 148 million in the first quarter of 2016 compared to a net loss of RUB 97 million in the fourth quarter of 2015and a profit of RUB 258 million a year ago.

Debt portfolio management

in millions of RUB 31.03.16 %
of total
31.12.15 Chg. 31.03.15 Chg.
Long-term loans 8 481 85% 7 379 15% 8 698 -2,5%
Short-term loans 1 443 15% 41 653 -13% 3 113 -53,6%
Total debt, incl.: 9 924   9 032 10% 11 811 -15,98%
RUB loans 3 941 40% 2 651 49% 4 366 -9,7%
Average interest rate for RUB loans 10,99%   9,25% 1,74 п.п. 9,77% 1,22 п.п.
USD loans 5 983 60% 6 071 -1,4% 6 760 -11,5%
Average interest for USD loans 4,13%   4,13% 0 п.п. 4,33% -0,2 п.п.
PLN loans - - 310 - 685 -
Average interest for PLN loans - - 2,87% - 3,09% -
Cash and cash equivalents 4 150   3 390 22% 5 326 -22%
Net debt 5 774   5 642 2% 6 485 -11%
Net debt / 12M EBITDA 2,41   2,09 15% 2,27 6%

Net debt at March 31, 2016stood at RUB 5,774 million, increasing insignificantly by 2% compared to December 31, 2015and down 11% year over year.

The net debt to 12-month EBITDA ratioshowed a 15% quarterly rise and stood at 2.41.

The loan portfolio is distributed among 10 Russian and foreign banks.

Cash flow and investments

in millions of RUB Q12016 Q42015 Chg. Q1 2015 Chg.
Operating cash flow 365 1 203 -70% -395 н.п.
Investment cash flow -591 -360 64% -399 48%
Acquisition of property, plant and
equipment
-595 -470 27% -163 265%
Financial cash flow 1 364 -4 428 н.п -1 438 н.п
Net increase / (decrease) in cash and cash
equivalents
1 138 -2 955 н.п -2 232 н.п

In first quarter of 2016 operating cash flow amounted to RUB 365 million.

Investment cash flow was RUB (591) million. Acquisition of property, plant and equipment stood at RUB 595 million.

Net cash flow from financial activities for the quarter was RUB 1,364 million.

Net increase in cash and cash equivalents stood at RUB 1,138 million.

Key events after the reporting date

  • In April 2016, a meeting of KTK’s Board of Directors was held, which examined issues related to the preparation for the Annual General Meeting of shareholders, as well as questions of the company’s current activities. The AGM will be held at 2 pm on May 30, 2016 at 50 let Oktyabrya, 4, in the meeting room, in Kemerovo. The Board of Directors recommended the AGM not to pay dividend for 2015.

Contacts for analysts, investors, and press:

Elena Sarycheva, head of public affairs department

+7 (3842) 36-47-62
es@oaoktk.ru

KTK at a glance:

Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK) is one of the largest manufacturers and exporters of thermal coal in Russia. Production assets of the Company include three current plots and one projected plot at the Vinogradovsky mine in Kemerovo region, as well as two washing plants and own railroad infrastructure located in the same industrial cluster with the production assets. The Company operates retail networks in four regions of Siberia and a wholesale network in Poland. The company employs over 4,400 people. KTK’s shares are traded on MICEX, the free float is 33.15%.

News and announcements (Russian only) www.facebook.com/oaoktk

Presentations www.slideshare.net/oaoktk

Video www.youtube.com/oaoktkru

Financial highlights under IFRS:

 in millions of RUB
2015
2014
2013

Revenue

24 994
22 250
22 490

Cost of sales

20 932
18 925
19 523
Production cash costs per tonne, RUB
 
577
611

EBITDA

2 697
2 518
2 422
EBITDA margin
10,8%
11%
11%
EBITDA per tonne, RUB
245
237
239

Net profit

37
7
640
Net profit margin
-
-
3%

Net debt

5 642
6 101
3 917
Net debt / EBITDA
2,09
2,42
1,62

Rounding and errors:

Certain numerical figures included in this press release have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that preceded them. Calculations of change in % are made after rounding of figures.

We make every effort to check and verify the materials, but if you find any errors or inaccuracies please report it to pr@oaoktk.ru.

Appendix

Production

0,25 25% 0,24 4,2% 0,25 -
  Q1
2016
Share Q4 2015
2015
Chg. Q1 2015 Chg.
Coal production3, in millions of
tonnes, incl.:
2,79   3,01 -7,3% 2,88 -3,1%
Karakansky South 1,07 38% 1,19 -10,1% 1,18 -9,3%
Vinogradovsky 1,20 43% 1,07 12,1% 1,19 0,8%
Cheremshansky 0,53 19% 0,76 -30,3% 0,51 3,9%
Commercial products4 , in millions
of tonnes
2,41   2,66 -9,4% 2,54 -5,1%
Coal processing5, in millions of
tonnes, incl.:
2,19   2,16 1,4% 2,09 4,8%
Sorted coal 1,19 54% 1,23 -3,3% 1,21 -1,7%
Washed coal 1,00 46% 0,93 7,5% 0,88 13,6%
Kaskad 1 washingplant 0,96 0,96 - 2,80 2,32 21%
Kaskad2 washing plant 0,75 75% 0,69 8,7% 0,63 19%
Stripping, in millions ofcbm, incl.: 15,29   14,28 7,1% 14,96 2,2%
Blasted rock mass6 , in millions of cbm 8,39   9,60 -12,6% 8,92 -6%
Average stripping ratio 7 5,50   4,70 17% 5,20 6%
Average stripping transportation
distance, km
2,40   2,60 -7,7% 2,70 -11,1%

Sales

  Q3
2015
Q2
2015
Chg.
2015
9M 2015 9M 2014 Chg.
Sales volume8 ,
in millions oftonnes, incl.:
2,56   3,14 -18,5% 2,56 -
Export sales volume 1,84 72% 1,78 3,4% 1,60 15,0%
Domestic sales volume 0,72 28% 1,36 -47,1% 0,95 -24,2%
Own coal 2,45 96% 2,65 -7,5% 2,37 3,4%
Coal resale 0,11 4% 0,49 -77,6% 0,19 -42,1%
Average selling price, RUB/tonne9 1316   1352 -2,7% 1 350 -2,5%
1 Change Q1 2016/Q1 2015
2 EBITDA for each period is defined as results from operating activities, adjusted for amortization and depreciation, impairment loss and profit or loss on disposal of property, plant and equipment. EBITDA is not a measurement of Company’s operating performance under IFRS and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities or as measure of the Company’s liquidity.
3Including Kaskad1 washing plant
4 Commercial product volume after sorting and washing
5Sorted and washedcoal
6Includedinstripping
7Share of coal produced in stripping
8Sales for the group of companies, including third parties coal resale
9Excluding railroad tariff and VAT