KEMEROVO, Russian Federation—May 20, 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 unaudited interim consolidated financial results under IFRS for the first quarter ended March 31, 2019.
First Quarter 2019 Key Production Results
| |
Q1 2019 |
% of total |
Q4 2018 |
Chg. |
Q1 2018 |
Chg. |
| Coal production[1], in millions of tonnes, incl.: |
3.68 |
|
4.25 |
(13%) |
3.85 |
(4%) |
| Karakansky South open-pit mine |
0.52 |
14% |
0.66 |
(21%) |
0.59 |
(12%) |
| Vinogradovsky open-pit mine |
1.40 |
38% |
1.43 |
(2%) |
1.49 |
(6%) |
| Cheremshansky open-pit mine |
0.75 |
20% |
1.18 |
(36%) |
0.87 |
(14%) |
| Bryansky open-pit mine |
1.01 |
27% |
0.98 |
3% |
0.89 |
13% |
| Commercial products[2], in millions of tonnes |
3.20 |
|
3.86 |
(17%) |
3.35 |
(4%) |
| Coal processing[3], in millions of tonnes, incl.: |
2.93 |
|
2.74 |
7% |
2.74 |
7% |
| Sorted coal |
1.75 |
60% |
1.60 |
9% |
1.58 |
11% |
| Washed coal |
1.18 |
40% |
1.14 |
4% |
1.16 |
2% |
| Kaskad 1 washing plant |
0.37 |
31% |
0.35 |
6% |
0.35 |
6% |
| Kaskad 2 washing plant |
0.81 |
69% |
0.79 |
3% |
0.81 |
0% |
| Blasted rock mass[4], in millions of cbm |
12.40 |
|
13.15 |
(6%) |
10.94 |
13% |
| Average stripping transportation distance, km |
3.18 |
|
2.79 |
14% |
2.78 |
14% |
- In the first quarter of 2019 the Company produced 3.68 million tonnes of coal, lowering the indicator for the same period of 2018 by 4%.
- The volume of commercial products went down by 4% compared to the year-ago quarter, to 3.20 million tonnes, and by 17% compared to the fourth quarter of last year.
- Coal processing amounted to 2.93 million tonnes, which is 7% more than in the first quarter of 2018 and 7% more than in the previous quarter.
- First-quarter total coal washing grew by 2% year-over-year, to 1.18 million tonnes, of which 69% belongs to the Kaskad 2 washing plant, the other 31% being done at Kaskad 1.
- Coal-sorting volume went down by 9% compared to the fourth quarter of 2018 and by 11% compared to the year-ago corresponding period.
- The volume of blasted rock mass was 12.40 million cbm, a 13% increase for the year and a 6% decrease for the quarter.
First Quarter 2019 Key Commercial Results
| |
Q1 2019 |
% of total |
Q4 2018 |
Chg. 1 |
Q1 2018 |
Chg. 2 |
| Sales volume[5], in millions of tonnes, incl.: |
3.91 |
|
3.59 |
9% |
4.76 |
18% |
| Export sales volume |
3.10 |
79% |
2.62 |
18% |
3.34 |
(7%) |
| Domestic sales volume |
0.81 |
21% |
0.97 |
(16%) |
1.42 |
(43%) |
| Own coal |
3.32 |
85% |
3.11 |
7% |
3.76 |
(12%) |
| Coal resale |
0.59 |
15% |
0.48 |
23% |
1.00 |
(41%) |
- In the first quarter sales stood at 3.91 million tonnes of coal, a growth of 18% in yearly terms and 9% in quarterly terms.
- First-quarter export sales went up by 18% compared to the year-ago quarter, and down by 7% compared to the previous quarter.
- For the quarter, exports stood at 3.10 million tonnes, while the share of exports in total sales was 79%.
- Domestic sales amounted to 0.81 million tonnes, 21% of total sales. They fell by 43% versus the volume of the previous quarter which is explained by the seasonal decrease in demand for coal.
First Quarter 2019 Financial highlights
| in millions of RUB |
Q1 2019 |
Q4 2018 |
Chg. |
Q1 2018 |
Chg. |
| Revenue |
17,189 |
20,573 |
(16%) |
13,497 |
27% |
| Cost of sales |
15,220 |
17,253 |
(12%) |
10,734 |
42% |
| Gross profit |
1,969 |
3,320 |
(41%) |
2,763 |
(29%) |
| Gross profit margin |
11% |
16% |
(4.6 ppts) |
20% |
(9.0 ppts) |
| Selling, general and administrative expenses |
954 |
1,003 |
(5%) |
815 |
17% |
| Operating profit |
1,015 |
2,317 |
(56%) |
1,948 |
(48%) |
| Operating profit margin |
6% |
11% |
(5.4 ppts) |
14.4% |
(8.5 ppts) |
| EBITDA[1] |
1,699 |
2,983 |
(43%) |
2,489 |
(32%) |
| EBITDA margin |
10% |
14% |
(4.6 ppts) |
18% |
(8.5 ppts) |
| EBITDA per tonne, RUB |
462 |
702 |
(34%) |
647 |
(29%) |
| Net profit |
302 |
1,610 |
(81%) |
1,402 |
(78%) |
| Net profit margin |
2% |
8% |
(6.0 ppts) |
10% |
(8.6 ppts) |
- In the first quarter of 2019 revenue amounted to RUB 17,189 million, up by 27% compared to the results of the first quarter of last year. The main driver of revenue growth was the growth of prices in export markets.
- Cost of sales in the first quarter stood at RUB 15,220 million. The main increase in cost of sales compared to the same period last year was due to the growth of production volumes, as well as rising prices for fuels and lubricants, spare parts, and railway tariff.
- Quarterly gross profit amounted to RUB 1,969 million. Compared to the first quarter of 2018, it fell by 29%.
- Selling, general and administrative expenses amounted to RUB 954 million, up by 17% year-over-year.
- In the first quarter of 2019 the Company showed an operating income of RUB 1,015 million, two times lower than in the first quarter of 2018.
- Quarterly EBITDA reached RUB 1,699 million, showing a 32% fall in yearly terms.
- The Company shows a net profit of RUB 302 million in the first quarter of 2019.
As for the main financial indicators of the first quarter compared to the previous period, they showed the following dynamics relative to the fourth quarter of 2018:
- Revenue decreased by 16% to RUB 17,189 million.
- Gross profit went down by 41% to RUB 1,969 million.
- Quarterly EBITDA fell by 43 % to RUB 1,699 million.
- Net profit dropped by 81 % to RUB 302 million.
[1] 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.
Debt portfolio management
| in millions of RUB |
31.03.19 |
% of total |
31.12.18 |
Chg. |
31.03.18 |
Chg. |
| Long-term loans |
11,695 |
62% |
15,742 |
(26%) |
5,874 |
99%
|
| Short-term loans |
7,237 |
38% |
5,218 |
39% |
4,789 |
51%
|
| Total debt, incl.: |
18,933 |
100% |
20,960 |
(10%) |
10,663 |
78%
|
| RUB loans |
9,470 |
50% |
11,090 |
(15%) |
4,192 |
126%
|
| Average interest rate for RUB loans |
9% |
|
9% |
0.24 ppts |
9% |
(0.09 ppts)
|
| USD loans |
2,625 |
14% |
2,940 |
(11%) |
3,134 |
(16%)
|
| Average interest for USD loans |
5% |
|
5% |
0 ppts |
4% |
0.51 ppts
|
| EUR loans |
6,837 |
36% |
6,930 |
(1.34%) |
3,187 |
115%
|
| Average interest for USD loans |
2% |
|
2% |
0.02 ppts |
2% |
(0.31 ppts)
|
| Cash and cash equivalents |
15,654 |
|
16,823 |
(7%) |
6,596 |
137%
|
| Net debt |
3,279 |
100% |
4,137 |
(21%) |
4,067 |
(19%)
|
| Net debt / 12M EBITDA |
0.33 |
|
0.39 |
(14%) |
0.62 |
(46%)
|
| EBITDA (12months) |
|
|
|
(7%) |
|
|
- Net debt at March 31, 2019 stood at RUB 3.279 million, decreasing by 19% year-over-year and up by 100% compared to December 31, 2018.
- The net debt to 12-month EBITDA ratio stood at 0.33 and showed a 46% yearly decline. This is the lowest figure in the Company’s history. The loan portfolio is distributed among 12 Russian and foreign banks.
- Most of the loans in the Company's loan portfolio are denominated in RUB, they amount to 50%, 36 % are denominated in EUR and 14 % in USD.
- As of March 31, 2019, the average effective rate was 9% for loans denominated in RUB, 2% for EUR-denominated loans, and 5% for loans denominated in USD.
Cash flow and investments
| in millions of RUB |
Q1 2019 |
Q4 2018 |
Chg |
Q1 2018 |
Chg |
| Operating cash flow |
1,776 |
882 |
101% |
1,069 |
66% |
| Investment cash flow |
(560) |
(1,301) |
(57%) |
(677) |
(17%) |
| Acquisition of property, plant and equipment |
(573) |
(1,385) |
(59%) |
(684) |
(16%) |
| Financial cash flow |
(1,278) |
4,328 |
n/a |
729 |
n/a |
| Net increase / (decrease) in cash and cash equivalents |
(62) |
3,909 |
n/a |
1,121 |
n/a |
- In the first quarter of 2019 operating cash flow went up by 66% compared to the year-ago period and amounted to RUB 1.776 million.
- Investment cash flow fell by 17% and stood at RUB (560) million.
- Net cash flow from financial activities was RUB (1.278) million.
- Net increase in cash and cash equivalents stood at RUB (62) million.
Outlook for the second quarter of 2019
In accordance with the production plan, in the second quarter of 2019 it is expected that:
- the volume of coal production will amount to 4.0 million tonnes
- the volume of commercial products will amount to 3.4 million tonnes
Contacts for analysts, investors, and media:
Elena Sarycheva
Head of strategic communications department
+7 (495) 787 68 04
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 two projected plots 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 |
Additional information about the Company and investor calendar:
www.oaoktk.ru/en/investors
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.
