News and events

KEMEROVO, Russian Federation—November 14, 2019 2:00 PM (UTC +7:00)—Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK), one of the largest producers and exporters of thermal coal in Russia, today announced operating and audited interim consolidated financial results under IFRS for the third quarter and nine months ended September 30, 2019.
 
Third Quarter 2019 Key Production Results
 

	Q3 2019	% of total	Q2 2019	Chg.	Q3 2018	Chg.
Coal production[1], in millions of tonnes, incl.:	4.16		3.73	12%	3.88	7%
Karakansky South open-pit mine	0.70	17%	0.42	67%	0.80	(13%)
Vinogradovsky open-pit mine	1.66	40%	1.50	11%	1.37	21%
Cheremshansky open-pit mine	0.95	23%	0.82	16%	0.97	(2%)
Bryansky open-pit mine	0.85	20%	0.99	(14%)	0.74	15%
Commercial products[2], in millions of tonnes	3.48		3.08	13%	3.33	5%
Coal processing[3], in millions of tonnes, incl.:	2.85		2.85	0%	2.76	3%
Sorted coal	1.54	54%	1.62	(5%)	1.81	(15%)
Washed coal	1.32	46%	1.23	7%	0.95	39%
Kaskad 1 washing plant	0.38	30%	0.40	(5%)	0.16	138%
Kaskad 2 washing plant	0.93	70%	0.84	11%	0.79	18%
Blasted rock mass[4], in millions of cbm	13.33		13.44	(1%)	12.20	9%
Average stripping transportation distance, km	2.69		3.01	(11%)	2.81	(4%)

 

• In the third quarter of 2019 the Company produced 4.16 million tonnes of coal, raising this indicator by 7% versus the year-ago quarter and by 12% compared to the second quarter of 2019.
• The volume of commercial products also went up, to 3.48 million tonnes, by 5% to the year-ago quarter and by 13% compared to the second quarter.
• Coal processing amounted to 2.85 million tonnes, 3% higher than in the third quarter of 2018 and at the same level with the second quarter of 2019.
• Total coal washing in the third quarter rose by 39% to the level of this indicator of the year-ago quarter, and amounted to 1.32 million tonnes, of which 70% were processed at the Kaskad 2 washing plant and 30% at Kaskad 1.
• Coal sorting at mobile sorting plants fell by 15% compared to the third quarter of 2018 and by 5% compared to the second quarter of 2019.
• The volume of blasted rock mass in the third quarter of 2019 went up by 9% over the year-ago quarter and slightly down, by 1%, quarter-over-quarter, to 13.33 million cubic metres.

 
Third Quarter 2019 Key Commercial Results
 

	Q3 2019	% of total	Q2 2019	Chg. 1	Q3 2018	Chg. 2
Sales volume[5], in millions of tonnes, incl.:	3.26		3.25	0.6%	3.93	(17%)
Export sales volume	2.44	75%	2.89	(15%)	2.99	(18%)
Domestic sales volume	0.82	25%	0.36	130%	0.94	(12%)
Own coal	3.07	94%	3.08	0	3.13	(1.6%)
Coal resale	0.19	06%	0.17	12%	0.80	(76%)

 

• In the third quarter sales dropped by 17% versus the volume of the year-ago quarter, standing at 3.26 million tonnes of coal. Compared to the previous quarter there is an insignificant growth.
• The main decrease in sales volumes was due to a fall in domestic sales by 12% compared to the level of the third quarter of 2018 and a decline in export sales by 18% compared to the same period last year.
• In the third quarter export sales amounted to 2.44 million tonnes, the share of exports in total sales of coal amounted to 75%.
• Domestic sales stood at 0.82 million tonnes, 25% of all sales. Compared with the results of the second quarter of 2019 they showed an increase of 130%, due to the seasonal growth in demand for coal.

 
Key production results for the nine months to September 30, 2019
 

	9M 2019	% of total	9M 2018	Chg.
Coal production[6], in millions of tonnes, incl.:	11.56		11.41	1%
Karakansky South open-pit mine	1.64	14%	1.98	(17%)
Vinogradovsky open-pit mine	4.56	39%	4.17	9%
Cheremshansky open-pit mine	2.52	22%	2.73	(8%)
Bryansky open-pit mine	2.85	25%	2.53	13%
Commercial products[7], in millions of tonnes	9.77		10.01	(2%)
Coal processing[8], in millions of tonnes, incl.:	8.64		8.31	4%
Sorted coal	4.91	57%	5.02	(2%)
Washed coal	3.73	43%	3.29	13%
Kaskad 1 washing plant	1.15	31%	0.85	35%
Kaskad 2 washing plant	2.58	69%	2.44	6%
Blasted rock mass[9], in millions of cbm	39.16		36.38	8%
Average stripping transportation distance, km	2.97		2.82	5%

 

• For the nine months of 2019 the Company produced 11.56 million tonnes of coal, 14% more than in the same period a year ago. Bryansky and Vinogradovsky mines were the ones to see production growth.
• Commercial product volume for the nine months stood at 9.77 million tonnes, an insignificant decrease by 2% over the year-ago corresponding period indicator.
• Coal processing amounted to 8.64 million tonnes, a yearly growth of 4%. Total coal washing for the nine months went up by 13%, to 3.73 million tonnes.
• The share of coal processed at Kaskad 2, was 69%.

 
Key commercial results for the nine months to September 30, 2019
 

	9M 2019	% of total	9M 2018	Chg.
Sales volume[10], in millions of tonnes, incl.:	10.14		11.51	(12%)
Export sales volume	8.15	80%	9.09	(10%)
Domestic sales volume	1.99	20%	2.42	(18%)
Own coal	9.48	93%	9.47
Coal resale	0.66	7%	2.04	(67%)

 

• In the nine months of 2019 sales stood at 10.14 million tonnes, 1.37 million tonnes or 12% less than in the previous corresponding period.
• In the reporting period, there was a general decline in sales compared to the same period last year.
• Domestic-market coal sales fell by 18%, to 1.99 million tonnes.
• At the end of the nine months of the year coal resale went down by 67%, amounting to 0.66 million tonnes.
• As for sales of own coal, the indicator slightly grew over the year-ago period and stood at 9.48 million tonnes.

 
Financial highlights for the third quarter and nine months 2019
 

in millions of RUB	Q3 2019	Q2 2019	Chg.	9M 2019	9M 2018	Chg.
Revenue	12,350	12,145	2%	40,528	47,906	(15%)
Cost of sales	11,151	13,048	-15%	38,154	39,272	(3%)
Gross profit	1,199	(903)	n/a	2,374	8,634	(73%)
Gross profit margin	10%	-	-	6%	18%	(12 ppts)
Selling, general and administrative expenses	1,003	808	24%	2,757	2,594	6%
Operating profit	196	(1,711)	n/a	383	6,040	n/a
Operating profit margin	2%	-	-	-	13%	-
EBITDA	798	(1,098)	n/a	1,447	7,644	(81%)
EBITDA margin	6%	-	-	4%	16%	(12 ppts)
EBITDA per tonne, RUB	192	-	-	125	670	(81%)
Net,profit	9	(1,740)	n/a	(1,275)	4,413	n/a
Net profit margin	0%	-	-	-	9%	-

 
 












 

• In the nine months of 2019 all major financial indicators showed a decline compared to the first nine months of 2018.
• Revenue stood at RUB 40,528 milion, down by 15% to the year-ago period. The main reason for the decrease in revenue was a significant decline in prices in export markets.
• Cost of sales for the nine months was RUB 38,154 milion, 3% less than in the previous-year period.
• Gross profit amounted to RUB 2,374 million.
• Operating profit shrank to RUB 383 million.
• EBITDA reaching a value of RUB 1,447 million.

 
Debt portfolio management
 

in millions of RUB	30.09.19	% of total	30.06.19	Chg. 1	30.09.18	Chg. 2
Long-term loans	3,515	32%	15,742	(78%)	12,261	(71%)
Short-term loans	7,437	68%	5,218	43%	3,897	91%
Total debt, incl.:	10,952	100%	20,960	(47.75%)	16,158	(32%)
RUB loans	8,560	78%	11,090	(23%)	7,803	10%
Average interest rate for RUB loans	9.61%		9.21%	0.4 ppts	9,03%	0.58 ppts
USD loans	0	0 %	2,940	(100%)	2,776	(100%)
Average interest for USD loans	0.00%		4.73%	(4.73 ppts)	4.73%	(4.73 ppts)
EUR loans	2,392	22%	6,930	(65%)	5,579	(57%)
Average interest for EUR loans	1.99%		1.93%	0.07 ppts	1.89%	0.11 ppts
Cash and cash equivalents	4,837		16,823	(71%)	12,083	(60%)
Net debt	6,115	100%	4,137	48%	4,075	50%
Net debt / 12M EBITDA	1.38		0.39	255%	0.39	252%
EBITDA (12months)	4,430		10,627	(58%)	10,384	(57%)

 

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• Net debt at September 30, 2019 stood at RUB 6,115 million.
• The net debt/12-month EBITDA ratio stood at 1.38.
• Most of the loans in the Company’s portfolio, 78%, are denominated in RUB, while 22% are denominated in EUR.
• As of September 30, 2019, the average effective rate was 9.61% for loans denominated in RUB, and 1.99% for loans denominated in EUR.

 




Cash flow and investments
 

in millions of RUB	Q3 2019	Q2 2019	Chg.	9M 2019	9M 2018	Chg.
Operating cash flow	(19)	(1,040)	(98%)	717	3,724	(81%)
Investment cash flow	(833)	(1,038)	(20%)	(2,431)	(2,427)	0%
Acquisition of property, plant and equipment	(847)	(1,055)	(20%)	(2,475)	(2,453)	1%
Financial cash flow	(10,308)	2,418	n/a	(9,168)	4,687	n/a
Net increase / (decrease) in cash and cash equivalents	(11,160)	340	n/a	(10,882)	5,984	n/a

 




 

Contacts for analysts, investors, and media:   Elena Sarycheva, head of strategic communications department es@ktk.company

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 Western 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%.
 

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Financial highlights under IFRS:

in millions of RUB	2018	2017	2016
Revenue	68,479	38,662	26,863
Cost of sales	56,525	32,570	23,220
EBITDA	10,627	5,080	2,628
EBITDA margin	15.5%	13.1%	9.8%
EBITDA per tonne, RUB	679	384	225
Net profit	6,023	2,104	647
Net profit margin	8.8%	5.4%	2.4%
Net debt	4,137	4,288	5,487
Net debt / EBITDA	0.39	0.84	2.09

 












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.
 
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