Kemerovo, Russian Federation – OJSC "Kuzbasskaya Toplivnaya Company" (RTS/MICEX: "KBTK"), one of the fastest-growing thermal coal producers in Russia, is pleased to announce the audited consolidated IFRS financial results for the year ended December 31, 2011.
Financial highlights
| RUB mln. | Q41 2011 |
Q31 2011 |
Ch. | 2011 | 2010 | Ch. |
| Revenue | 7,551 | 6,207 | 21.7% | 23,939 | 14,160 | 69.1% |
|
EBITDA2 |
1,360 | 1,078 | 26.2% | 3,911 | 2,134 | 83.3% |
| EBITDA margin, % | 18.0% | 17.4% | - | 16.3% | 15.1% | - |
| Net profit | 776 | 449 | 72.8% | 2,018 | 823 | 145.2% |
| Net profit margin, % | 10.3% | 7.2% | - | 8.4% | 5.8% | - |
| Net Debt3 | 2,663 | 2,268 | 17.4% | 2,663 | 1,754 | 51.8% |
| Net Debt / EBITDA4 | 0.68 | 0.66 | 3.9% | 0.68 | 0.82 | -17.1% |
Operational highlights
| mln. tonnes | Q4 2011 |
Q3 2011 |
Ch. | 2011 | 2010 | Ch. |
| Coal production, incl.: | 2.57 | 2.44 | 5.3% | 8.74 | 6.80 | 28.5% |
|
Coal sorting |
1.51 | 1.50 | 0.7% | 5.56 | 4.10 | 35.6% |
| Coal enrichment | 0.19 | 0.20 | -5.0% | 0.74 | 0.20 | 270.0% |
| Coal sales | 3.34 | 2.81 | 18.9% | 10.66 | 8.54 | 24.8% |
| Average price, RUB per tonne (руб./т.)6 | 1,285 | 1,229 | 4.6% | 1,228 | 977 | 25.7% |
4th Quarter 2011 overview
Igor Prokudin, CEO of the Company, commented:
“Summarizing the results of 2011, I should note a significant increase in coal production – 8.74 mln. tonnes (an increase of 1.94 mln. Tonnes to 2010). These dynamics allowed KTK to become one of the top-10 largest Russian companies by volume of thermal coal production, and enter the 5th place among the Russian exporters of coal, shipping 6.45 mln. tonnes for export. This is the highest level of sales of coal for export in the Company’s history.
At the end of December 2011 the Company won an auction for a license to mine Bryansk-1, getting an additional 250 mln. tonnes of coal reserves in close proximity to existing infrastructure. We have already started geological investigations explored the area and plan to start developing the fourth section in the future. The new field will subsequently increase the production of the Company. A significant event in 2011 for the KTK was also the start of construction of the second enrichment plant, which is expected to be finished in Q4 2012. The plant will be a unique innovative project for the Russian and possibly international practice. The investment program, which was announced to the participants of IPO in 2010, included the construction of an enrichment plant with capacity of 2 mln. tonnes. As a result the capacity of the second enrichment plant was increased to 4 mln. tonnes.
In addition, we have conducted a large reconstruction of our sorting station Uba: we have built 5 additional railway tracks with contact network, an administrative building, which housed employees of TEK "Meret" and OJSC ”RZD”. This allowed us to meet the technical conditions of OJSC ”RZD” and increase the capacity to 16.7 mln. tonnes of coal per year through this transport corridor. An important strategic direction of the Company's development is to ensure the transportation independence of KTK. Therefore, to purchase additional railroad cars for KTK, “Kuzbasskaya Transportation Company”, an associate of KTK opened a credit line with Gazprombank amounting to RUR 10 bln. for a period of 10 years.
At the beginning of 2012 “Kuzbasskaya Transportation Company”7 had 2,628 high-sided railroad cars at its disposal. Earlier this year additional 500 high-sided rail cars were purchased. It is planned that the needs of KTK in the railroad cars for transportation of coal will be fully met with this additional credit facility.
Reviewing the results of 2011, I believe that management has successfully fulfilled al the tasks. Based on the financial results for 2011 under IFRS, the company's revenue has grown in the rouble equivalent by 69.1%, net profit increased by 145.2% and earnings per share – at 122.2%. EBITDA amounted to USD 133 mln., which meets our internal forecasts. Net debt to EBITDA remains at a low level of 0.68. We met and even exceeded all financial and operational targets of the 2011 plan.
We believe that the execution of commitments, which we made to the investors during the IPO, financial transparency, high standards of corporate governance and systematic work to improve business efficiency, will lead to long-term increase in shareholder value of the Company. Management thanks all KTK’s staff for their united work and support of the management’s initiatives which ensured sustainable development of the Company during the past year.“
Conference-call
KTK’s management will host a conference call for investors and analysts followed by a Q&A session on the day of the results.
The Company will be represented by:
Eduard Alexeenko – First deputy CEO
Vasily Rumyantsev – Investor relations manager
The dial-in details are:
Date: Wednesday, 4 April 2012
Time: 09.00 New York / 14.00 London / 17.00 Moscow8
Title: 2011 IFRS Statements Conference Call of OJSC “Kuzbasskaya Toplivnaya Company”
You can join the conference call by dial-in:
Russia: +7 (495) 213 0977
International/UK: +44 (0) 20 3140 8286
USA: +1646 254 3364
Conference ID: 1042317
A live webcast or downloading of the presentation will be available at:
www.slideshare.net/oaoktk
The conference call replay will be available through April 11 2012:
Russia Replay Number: 810 (800) 2870 1012
International/UK Replay Number: +44 (0) 20 7111 1244
USA Replay Number: +1646 254 3364
Replay Access Code: 1042317 (press # after entering Access Code)
For more information please contact:
OJSC "Kuzbasskaya Toplivnaya Company" (Kemerovo)
Elena Sarycheva
Head of public relations department
T: +7 (3842) 36-47-62
E: es@oaoktk.ru
For investor and analyst enquiries please contact:
OJSC "Kuzbasskaya Toplivnaya Company" (Moscow)
Vasily Rumyantsev
Investor relations manager
T: +7 (495) 787-68-05
E: vkr@oaoktk.ru
IMPORTANT: 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 converted to USD.
We make every effort to check and verify the materials, but if you find any errors or inaccuracies please report it to vkr@oaoktk.ru and we will provide you with the correct data and publish any correction notes on the website www.oaoktk.ru.
Financial overview
| RUB mln. | Q49 2011 |
Q39 2011 |
Ch. | 2011 | 2010 | Ch. |
| Revenue | 7,551 | 6,207 | 21.7% | 23,939 | 14,160 | 69.1% |
|
Cost of sales |
-6,042 | -4,942 | 22.3% | -19,404 | -11,457 | 69.4% |
| Gross profit | 1,507 | 1,265 | 19.3% | 4,535 | 2,703 | 67.8% |
| Commercial, administrative and other costs | -440 | -429 | 2.6% | -1,640 | -1,350 | 21.5% |
| Operating profit | 1,067 | 836 | 27.9% | 2,895 | 1,353 | 114.0% |
| EBITDA10 | 1,360 | 1,078 | 26.2% | 3,911 | 2,134 | 83.3% |
| Net profit (loss) | 776 | 449 | 72.8% | 2,018 | 823 | 145.2% |
Revenue
In Q4 2011 the Company’s consolidated revenue reached RUB 7,551 mln., having increased from the previous quarter by 21.7% (Q3 2011: RUB 6,207 mln.) due to the growth of sales volume by 18.9% associated with the seasonal increase in demand for coal, an increase in average sales prices by 4.6% quarter-on-quarter and an increase in the RUB/USD exchange rate, which positively affected the segment of export sales. Total revenue net of VAT and railroad tariffs increased by 24.2%
In the last quarter the revenue in export coal sales segment increased by 20.3% quarter-on-quarter to RUB 5.087 mln. (Q3 2011: RUB 4,227 mln.) as a result a 9.9% growth in export shipment volumes and a 4.6% increase of average sales prices11. Revenue in export coal sales net of VAT and railroad tariffs increased by 25.8%.
In Q4 revenue from the domestic sales of coal produced amounted to RUB 1,423 mln., increasing by 18.3% compared to Q3 (RUB 1,203 mln.). Revenue growth in coal resale segment was 25.7%, increasing from RUB 682 mln. in Q3 to RUB 857 mln. in Q4 2011. Revenue net of VAT and railroad tariffs increased by 22.3%.
In Q4 revenue from other activities amounted to RUB 184 mln., almost doubling compared to Q3 2011 (RUB 95 mln.). This increase was caused by a seasonal growth of heat and electric power sales by Anzhero-Sudzhensk power plant, owned by KTK, and growth in third party coal storage services provided at the facilities of the Company’s retail chain.
During 2011, consolidated revenue increased by 69.1% to RUB 23,939 mln. (2010: RUB 14,160 mln.). Revenue from domestic sales of own coal produced increased by 28.1% whereas export revenue increased by 109.4% year-over-year. The growth of the consolidated revenue was influenced by growth in sales of own coal, related to an increased production, as well as maintaining the volume of resale of coal from third parties and a near two-fold increase in exports.
Cost of sales
| RUB mln. | Q411 2011 |
Q312 2011 |
Ch. | 2011 | 2010 | Ch. |
| Rail road tariff and transportation | 3,197 | 2,765 | 15.6% | 10,623 | 5,437 | 95.4% |
| Purchased coal | 796 | 529 | 50.5% | 2,189 | 1,595 | 37.2% |
| Employee costs and social payments | 374 | 301 | 24.3% | 1,262 | 924 | 36.6% |
| Extraction, processing and sorting of coal | 652 | 519 | 25.6% | 1,790 | 723 | 147.6% |
| Fuel | 442 | 284 | 55.6% | 1,348 | 804 | 67.7% |
| Depreciation | 284 | 234 | 21.4% | 965 | 755 | 27.8% |
| Spare parts | 130 | 150 | -13.3% | 557 | 499 | 11.6% |
| Extraction tax and environment payments | 80 | 63 | 27.0% | 280 | 248 | 12.9% |
| Repair and maintenance | 91 | 117 | -22.2% | 375 | 228 | 64.5% |
| Other costs | 159 | 84 | 89.3% | 475 | 409 | 16.1% |
| Change in coal stock | -162 | -104 | 55.8% | -460 | -165 | 178.8% |
| Cost of sales | 6,042 | 4,942 | 22.3% | 19,404 | 11,457 | 69.4% |
In Q4 the cost of sales increased by 22.3% and amounted to RUB 6,042 mln. (Q3 2011: RUR 4,942 mln.). The main drivers of the quarterly growth in the cost of sales were transportation expenses and the cost of coal purchased for resale, and an increase in production costs13 driven by growth in production volumes.
In Q4 transportation costs increased by 15.6% to RUB 3,197 mln. (Q3 2011: RUB 2,765 mln.) due to a 18.9% growth in sales volumes. During the quarter the cost of purchased coal for resale increased by 50.5% - from RUB 529 mln. to RUB 796 mln. This was driven by increased coal resale volumes.
In the past quarter production costs12 increased by 24.6% to RUB 1,794 mln. (Q3 2011: RUB 1,440 mln.), and their share in the cost of sales increased from 29.1% to 29.7%. The key indicators, which affect the Company’s production costs, are presented in the table below:
Key coal production indicators
| Q4 2011 |
Q3 2011 |
Ch. | 2011 | 2010 | Ch. | |
| Coal production, mln. Tonnes | 2.57 | 2.44 | 5.3% | 8.74 | 6.80 | 28.5% |
| Stripping, mln. cub. M | 18.85 | 17.99 | 4.8% | 68.1 | 49.48 | 37.7% |
| Exploded rock, mln. cub. m14 | 10.72 | 7.53 | 42.4% | 32.79 | 25.43 | 28.9% |
| Stripping ratio15 (т. / куб. м.) | 7.35 | 7.38 | -0.4% | 7.80 | 7.27 | 7.3% |
| Average stripping transportation distance, km. | 2.95 | 3.08 | -4.2% | 2.88 | 2.72 | 5.9% |
During Q4 2011 the main categories of production costs16 have changed as follows:
In Q4 production cash costs16 per 1 tonne of coal increased by 18.3% to RUR 698 (Q3 2011: RUR 590), primarily due to increases in payroll and fuel prices.
In Q4 depreciation included in the cost of sales increased by 21.4% quarter-on-quarter to RUB 284 mln. Extraction tax and environment payments increased by 27.0% to RUR 80 mln because of production growth and increase in sales prices increase. All other costs, including operating leases, electric power and others, increased by 89.3 % to RUR 159 mln. The main drivers of their growth were: an increase of electric power consumption due to the winter season and use of power by the enrichment plant.
Increase the balance of coal stock amounted to RUB 162 mln. compared to an increase of RUB 104 mln. in Q3 2011 compared to Q2. This increase was due to increased purchases of coal to create a coal reserve in 2012, as well as due to less-than-planned volume of retail coal sales in December 201 caused by a relatively warm weather.
As a result of the above factors, the quarterly gross profit increased by 19.1% and amounted to RUB 1,507 mln. (Q3 2011: RUB 1,265 mln.).
The full 2011 cost of sales increases by 69.4% year-on-year to RUB 19,404 mln. (2010: RUB 11,457 mln.). The cost of coal transportation increased by 95.4% to RUB 10,623 mln. (2010: RUB 5,437 mln.). This item was influenced by the 24.8% growth of sales volumes and an increase of the export share in the total sales volume from 43.8% in 2011 to 60.5% in 2010, as well as by an increase of railroad tariffs. Cost of purchases of coal from third parties during 2011 increased by 37.2% from RUB 1,595 mln. to RUB 2,189 mln., before changes in coal stock.
The last year was also characterized by a growth of production cash costs17, that increased by 28.1% to RUB 652 per tonne (2010: RUB 509). Cash costs increased due to growth of personnel costs, an increase in the volume of stripping services performed by contractors by more than three times and a rise of their costs due to increase in diesel fuel prices. In addition, the increase in cash costs was influenced by the growth of coal sorting by 35.6% and change in mining and geological conditions, which pushed up rock mass explosion and coal transportation costs, as well as expenses for rock transporting and equipment repair and maintenance. Gross profit for 2011 increased by 67.8% year-on-year and amounted to RUB 4,535 mln. (2010: RUB 2,703 mln).
Distribution, administrative and other operation costs
Distribution, administrative and other costs in Q4 increased by 2.6% to RUB 440 mln. (Q3 2011: RUB 429 mln.) due to growth of personnel costs and other expenses. The growth of distribution and administrative personnel costs, which accounted for 61.5% quarter-on-quarter, was caused by a by a general wage increase in October 2011 and bonus payment for long service in December 2011. Property tax contributions remained stable at the level of Q3 2011 and amounted to RUB 37 mln. Cost of materials in Q4 2011 reached RUB 23 mln., an increase by 91.7% (Q3 2011: RUB 12 mln.) and was driven by growth in sales during Q4.
As for the full 2011 results, distribution, administrative and other costs have increased by 21.5% year-on-year from RUB 1,350 mln. to RUB 1,640 mln. Costs of distribution and administrative personnel increased by 32.2% to RUB 812 mln. (2010: RUB 614 mln.) due to 10.0% salary indexation in the first half and 5.0% in the second half of 2011, and also due to increase of personnel numbers caused by the growth of production and sales, and an unplanned rise in salaries for certain categories of employees. Expenses on services increased by 3.0% to RUB 413 mln. Property tax contributions and other taxes increased by 18.7% and reached RUB 146 mln. The growth of distribution and administrative expenses relates to an increase in sales volumes. While there is a direct relationship in respect of distribution costs, there is a correlation in respect of administrative expenses, too albeit on a smaller scale.
Operating profit, EBITDA and net profit
In Q4 operating profit increased by 27.6% quarter-on-quarter, from RUB 836 mln. to RUB 1,067 mln. EBITDA increased by 26.2% to RUB 1,360 mln. (Q3 2011: RUB 1,078 mln.), whereas EBITDA margin increased from 17.4% to 18.0%. Notably Q4 EBITDA margin net of transportation costs, included in the price for customers amounted to 31.7%. The results of the quarter demonstrated an increase in net profit by 72.8% to RUB 776 mln. (Q3 2011: RUB 449 mln.), while its margin increased from 7.2% to 10.3%.
Operation profit for 2011 increased by 114.0% year-on-year to RUB 2,895 mln. (2010: RUB 1,353 mln.). EBITDA for the year amounted to RUB 3,911 mln., being 83.3% higher than the result of 2010 (RUB 2,134 mln.). The USD equivalent of 2011 EBITDA is 90.0% higher than the level of 2010 and reached USD 133 mln18. The company managed to increase net profit by 145.2% to RUB 2,018 mln. (2010: RUB 823 mln.) due to higher sales volumes and an increase in the average price of coal net of VAT and railroad tariffs.
Indebtedness
| RUB mln. | Dec 31 2011 |
Sep 3019 2011 |
Ch. | Dec 31 2010 |
Ch.20 |
| Long term loans and credits | 2,794 | 2,358 | 18.5% | 1,676 | 66.7% |
| Short term loans and credits | 1,753 | 1,722 | 1.8% | 535 | 227.7% |
| Total debt, including: | 4,547 | 4,080 | 11.4% | 2,211 | 105.7% |
| Ruble-denominated | 647 | 1,898 | -65.9% | 228 | 183.8% |
| Foreign currency-denominated | 3,900 | 2,182 | 78.7% | 1,983 | 96.7% |
| Cash and cash equivalents | 1,884 | 1,812 | 4.0% | 457 | 312.3% |
| Net debt | 2,663 | 2,268 | 17.4% | 1,754 | 51.8% |
During Q4 the Company increased its debt level – the net debt increased by 17.4% to RUB 2,663, and the net debt to EBITDA ratio amounted to 0.68. The share of long term debt increased from 57.8% to 61.4% and the share of short term debt decreased from 42.2% to 38.6% of the total credit portfolio. As of December 31, 2011 only 14.2% of the Company’s loans were denominated in roubles, whereas the remaining 85.8% were denominated in US dollars. The Q4 interest expense decreased by 71.4% quarter-on-quarter to RUB 36 mln. (Q3 2011: RUB 126 mln.).
During 2011 the total net debt increased by 51.8% year-on-year compared to 2010. Interest paid decreased by 24.7%, from RUB 275 mln. to RUB 207 mln. During the last year net debt to EBITDA ratio decreased from 0.82 to 0.68.
Cash flow
| RUB mln.21 | Q4 2011 |
Q3 2011 |
Ch. | 2011 | 2010 | Ch. |
| Cash flows from operations before income tax and interest paid |
1,074 | 759 | 41.5% | 2,844 | 2,321 | 22.5% |
| Cash flows from operating activities | 787 | 577 | 36.4% | 2,074 | 2,031 | 2.1% |
| Cash flows used in investing activities | -1,087 | -562 | 93.4% | -2,540 | -2,435 | 4.3% |
| Cash flows from financing activities | 381 | 1,565 | -75.7% | 1,906 | 840 | 126.9% |
| Net increase / (decrease) in cash and cash equivalents |
81 | 1,580 | н.п. | 1,440 | 436 | н.п. |
During Q4 2011 operating cash flow before tax and interest increased by 41.5% quarter-on-quarter to RUB 1,074 mln (Q3 2011: RUB 759 mln.). It was mainly driven by an increase in EBITDA of 26.2% compared to Q3 and less significant cash outflow to maintain working capital compared to Q3. Total operating cash flow for Q4 also increased by 36.4% and reached RUB 787 mln., compared to RUB 577 mln. of cash inflow in the previous quarter.
Operating cash flow before tax and interest for 2011 increased by 22.5% to RUB 2.844 mln., whereas total cash flow from operations increased by 2.1%, from RUB 2,031 mln. to RUB 2,074 mln.
Capital expenditures
In the last quarter the level of investments in fixed assets increased by 93.4% compared to Q3 and amounted to RUB 1,087 mln. (Q3 2011: RUB 562 mln.) During the quarter the Company continued to purchase various mining and transport equipment including four open-pit BelAZ trucks.
For 2011, the volume of investments in fixed and intangible assets amounted to RUB 2,581 mln., increasing by 3.3% compared to the previous year (2010: RUB 2,499 mln). All funds have been spent in accordance with the long-term investment program of the Company, which in 2011 included the construction of the second enrichment plant, acquisition of large mining and transport equipment, including 22 open-pit BelAZ mining trucks, loaders, dozers, shovels, a drilling rig, and others.
Current trading and outlook for Q1 2012 and FY 2012
In Q1 2012 the Company plans to decrease production volumes by 12.0-13.0% quarter-on-quarter due to seasonal factors, however they will still be 20.0-25.0% higher compared to the level of Q1 2011. The decrease in production will lead to an increase of stripping ratio by 19.0-20.0% which can negatively impact production cash costs per 1 tonne of coal. At the same time, management expects a growth in export coal prices.
Management positively views the Company’s development perspectives in Q1 2012 and its outlook for the entire 2012. Based on concluded contracts for coal shipments to domestic and export markets, and planed increases in coal extraction and enrichment, management expects an increase of 2012 revenue, EBITDA and net profit compared to the results of 2011.
Forward–Looking Statements
This press release might contain forward-looking statements that refer to future events or forecast financial indicators for OJSC “Kuzbasskaya Toplivnaya Company”. Such statements do not guarantee that these are actions to be taken by OJSC “Kuzbasskaya Toplivnaya Company” in the future, and estimates can be inaccurate and uncertain. Actual final indicators and results can considerably differ from those declared in any forward-looking statements. “OJSC “Kuzbasskaya Toplivnaya Company” does not intend to change these statements to reflect actual results.
APPENDIX
1. Calculation of EBITDA22
| RUB mln. |
Q423 2011 |
Q323 2011 |
2011 | 2010 |
| Operating prifit | 1,067 | 836 | 2,895 | 1,353 |
| Depreciation | 305 | 249 | 1,039 | 820 |
| Impairment loss (recovery) | 0 | -1 | -1 | 7 |
| Profit from disposals of property, plant and equipment |
-12 | -6 | -22 | -46 |
| EBITDA | 1,360 | 1,078 | 3,911 | 2,134 |
2. Calculation of production cash costs
| RUB mln. | Q423 2011 |
Q323 2011 |
2011 | 2010 |
| Consolidated cost of sales | 6,042 | 4,942 | 19,404 | 11,457 |
| Excluding cost of sales of subsidiaries | -877 | -613 | -2,198 | -2,261 |
| OJSC KTK cost of sales | 5,165 | 4,329 | 17,206 | 9,196 |
| Excluding: | ||||
| Depreciation (in cost of sales) | -279 | -216 | -907 | -687 |
| Purchased coal | -133 | -31 | -549 | -595 |
| Change of inventory balances | 33 | -35 | 132 | 181 |
| Railroad tariffs and transportation costs | -2,992 | -2,607 | -10,180 | -4,633 |
| Total cash costs | 1,794 | 1,440 | 5,702 | 3,462 |
| Coal production, mln tonnes | 2.57 | 2.44 | 8.74 | 6.80 |
| Total cash costs per 1 tonne of coal, RUB | 698 | 590 | 652 | 509 |
3. Segment reporting
Domestic sales of coal produced
| RUB mln. | Q424 2011 |
Q324 2011 |
2011 | 2010 |
| Revenue | 1,423 | 1,203 | 4,026 | 3,144 |
| Cost of sales | -1,071 | -827 | -2,948 | -2,373 |
| Gross profit | 352 | 376 | 1,078 | 771 |
| Gross margin | 24.7% | 31.3% | 26.8% | 24.5% |
Export sales of coal produced
| RUB mln. | Q424 2011 |
Q324 2011 |
2011 | 2010 |
| Revenue | 5,087 | 4,227 | 17,127 | 8,178 |
| Cost of sales | -4,106 | -3,457 | -14,200 | -6,907 |
| Gross profit | 981 | 770 | 2,927 | 1,271 |
| Gross margin | 19.3% | 18.2% | 17.1% | 15.5% |
Resale of coal purchased25
| RUB mln. | Q424 2011 |
Q324 2011 |
2011 | 2010 |
| Revenue | 857 | 682 | 2,227 | 2,273 |
| Cost of sales | -739 | -569 | -1,853 | -1,786 |
| Gross profit | 118 | 113 | 374 | 487 |
| Gross margin | 13.8% | 16.6% | 16.8% | 21.4% |
Other operations
| RUB mln. | Q424 2011 |
Q324 2011 |
2011 | 2010 |
| Revenue | 183 | 95 | 559 | 565 |
| Cost of sales | -126 | -89 | -403 | -391 |
| Gross profit | 57 | 6 | 156 | 174 |
| Gross margin | 31.1% | 6.3% | 27.9% | 30.8% |
4. Financial highlights converted to USD
Comprehensive income statement highlights
| USD mln.26 | Q427 2011 |
Q327 2011 |
Ch.28 | 2011 | 2010 | Ch.28 |
| Revenue | 242 | 213 | 13.6% | 814 | 466 | 74.7% |
| Cost of sales | -193 | -170 | 13.5% | -660 | -377 | 75.1% |
| Gross profit | 48 | 44 | 9.1% | 154 | 89 | 73.0% |
| Distribution, administrative and other costs | -14 | -15 | -6.7% | -56 | -44 | 27.3% |
| Operating profit | 34 | 29 | 17.2% | 98 | 45 | 117.8% |
| EBITDA29 | 44 | 37 | 18.9% | 133 | 70 | 90.0% |
| Net profit (loss) | 25 | 15 | 66.7% | 69 | 27 | 155.6% |
Cost of sales
| USD mln.25 | Q427 2011 |
Q327 2011 |
Ch.28 | 2011 | 2010 | Ch.28 |
| Railroad tariff and transportation | 102 | 95 | 7.4% | 361 | 179 | 101.7% |
| Purchased coal | 25 | 18 | 38.9% | 74 | 53 | 39.6% |
| Employee costs and social payments |
12 | 10 | 20.0% | 43 | 30 | 43.3% |
| Extraction, processing and sorting of coal | 21 | 18 | 16.7% | 61 | 24 | 154.2% |
| Fuel | 14 | 10 | 40.0% | 46 | 26 | 76.9% |
| Depreciation | 9 | 8 | 12.5% | 33 | 25 | 32.0% |
| Spare parts | 4 | 5 | -20.0% | 19 | 16 | 18.8% |
| Extraction tax and environment payments | 3 | 2 | 50.0% | 10 | 8 | 25.0% |
| Repair and maintenance | 3 | 4 | -25.0% | 13 | 8 | 62.5% |
| Other costs | 5 | 3 | 66.7% | 16 | 13 | 23.1% |
| Change in coal stock | -5 | -4 | 25.0% | -16 | -5 | 220.0% |
| Cost of sales | 193 | 169 | 14.2% | 660 | 377 | 75.1% |
| Production cash costs per tonne, USD | 22 | 20 | 10.4% | 22 | 17 | 32.9% |
Cash flows
| USD mln.30 | Q431 2011 |
Q331 2011 |
Ch.32 | 2011 | 2010 | Ch.32 |
| Cash flows from operations before income tax and interest paid |
34 | 26 | 30.8% | 97 | 76 | 27.6% |
| Cash flows from operating activities | 25 | 20 | 25.0% | 71 | 67 | 6.0% |
| Cash flows used in investing activities | -35 | -19 | 84.2% | -86 | -81 | 6.2% |
| Cash flows from financing activities | 12 | 54 | -77.8% | 65 | 28 | 132.1% |
| Net increase/(decrease) in cash and cash equivalents |
2 | 55 | -96.4% | 50 | 14 | 257.1% |
Indebtedness
| USD mln.33 | Dec 31 2011 |
Sep 3031 2011 |
Ch.32 % |
Dec 31 2010 |
Ch.3234 |
| Long term loans and credits | 87 | 74 | 17.6%% | 55 | 58.2% |
| Short term loans and credits | 54 | 54 | 0.0% | 18 | 200.0% |
| Total debt, including: | 141 | 128 | 10.2% | 73 | 93.2% |
| Rouble-denominated | 20 | 60 | -66.7% | 7 | 185.7% |
| Foreign currency-denominated | 121 | 68 | 77.9% | 65 | 86.2% |
| Cash and cash equivalents | 59 | 57 | 3.5% | 15 | 293.3% |
| Net debt | 82 | 71 | 15.5% | 58 | 41.4% |
1 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited
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 the 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 a measure of the Company’s liquidity
3 Net debt calculated on page 11.
4 For the purpose of the Q4 2011 ratio calculation the aggregate of EBITDA for 12M 2011 was used. For the purpose of the Q3 2011 ratio calculation the aggregate of EBITDA for 9M 2011 and Q4 2010 was used.
5 Figures were converted to USD using the average exchange rates of the Central Bank of the Russian Federation for each period (2011: 29.39 RUB/USD; 2010: 30.38 RUB/USD). Calculations of change in % are made after rounding of figures converted to USD
6 Net of VAT and rail road tariffs.
7 OJSC "Kuzbasskaya Transportation Company" is an associate of KTK and does not form part of KTK group (as there is no control over this entity). OJSC "Kuzbasskaya Toplivnaya Company" does not invest in the acquisition of rail cars but acts as a guarantor under the credit line.
8 We recommend that participants start dialing in 15 minutes before the indicated time to ensure a timely start to the conference call.
9 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited
10 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 the 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 a measure of the Company’s liquidity.
11 Net of VAT and railroad tariffs.
12 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited.
13 Production costs include production personnel salaries, fuel, extraction and sorting costs, spare parts purchasing costs, repair and maintenance costs
14 Included in stripping volume.
15 Ratio of a volume of coal produced to a volume stripping volume processed
16 Production cash costs calculated in Appendix, Table 2
17 Production cash costs calculated in Appendix, Table 2
18 Figures were converted to USD using the average exchange rates of the Central Bank of the Russian Federation for each period (2011: 29.39 RUB/USD; 2010: 30.38 RUB/USD)
19 Hereinafter amounts for 9M 2011 are presented as unaudited
20 Change of figures as at December 31, 2011 compared to December 31, 2010.
21 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited.
22 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 the 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 a measure of the Company’s liquidity.
23 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited
24 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited
25 The cost of, and related revenue from sale of, coal purchased from third parties at EX-works terms for further processing and sorting is alocated between “Domestic sales of coal produced” and “Export sales of coal produced” segments.
26 Figures were converted to USD using the average exchange rates of the Central Bank of the Russian Federation for each period (Q4 2011: 31.24 RUB/USD; Q3 2011: 29.08 RUB/USD; 2011: 29.39 RUB/USD; 2010: 30.38 RUB/USD).
27 Hereinafter figures for Q3 and Q4 2011 are presented as unaudited
28 Calculations of change in % are made after rounding of figures converted to USD
29 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 the 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 a measure of the Company’s liquidity.
30 Figures were converted to USD using the average exchange rates of the Central Bank of the Russian Federation for each period (Q4 2011: 31.24 RUB/USD; Q3 2011: 29.08 RUB/USD; 2011: 29.39 RUB/USD; 2010: 30.38 RUB/USD).
31 Hereinafter figures for Q3, 9M and Q4 2011 are presented as unaudited
32 Calculations of change in % are made after rounding of figures converted to USD
33 Figures were converted to USD using the average exchange rates of the Central Bank of the Russian Federation for each date (Dec 31, 2011: 32.20 RUB/USD; Sep 30, 2011: 31.88 RUB/USD; Dec 31, 2010: 30.48 RUB/USD).
34 Change of figures as at December 31, 2011 compared to December 31, 2010
