On May 15 2014, Kuzbasskaya Toplivnaya Company OJSC (KTK, MICEX: KBTK), one of the largest producers and exporters of thermal coal in Russia, is pleased to announce operational results for the 1 quarter 2014.
Key production results for the Q1 2014
| | Q1 2014 | % of total | Q4 2013 | Chg | Q1 2013 | Chg1 |
| Coal production 2, | 2,31 | | 2,76 | (16%) | 2,39 | (3%) |
| Karakansky South open-pit mine | 0,71 | 30% | 0,90 | (21%) | 0,77 | (8%) |
| Vinogradovsky open-pit mine | 0,80 | 35% | 0,93 | (14%) | 0,69 | 16% |
| Cheremshansky open-pit mine | 0,80 | 35% | 0,92 | (13%) | 0,93 | (14%) |
| Commercial products3, | 2,02 | | 2,41 | (16%) | 2,39 | (15%) |
| Coal processing4, | 1,71 | 85% | 2,19 | (22%) | 1,77 | (3%) |
| Sorted coal | 0,98 | 49% | 1,39 | (29%) | 1,41 | (30%) |
| Washed coal | 0,73 | 36% | 0,80 | (9%) | 0,36 | 103% |
| Washing plant Kaskad 1 | 0,24 | 33% | 0,24 | - | 0,26 | (8%) |
| Washing plant Kaskad 2 | 0,49 | 67% | 0,56 | (13%) | 0,10 | 410% |
| Stripping, mln cbm, incl.: | 15,14 | | 15,11 | - | 14,70 | 3% |
| Blasted rock mass5, mln cbm | 8,78 | 58% | 8,41 | 4% | 6,37 | 38% |
| Average stripping ratio6 | 6,50 | | 5,50 | 18% | 6,10 | 7% |
| Average stripping transportation distance, km | 2,60 | | 2,80 | (7%) | 2,60 | - |
In Q1 2013 the Company has produced 2.31 mln tonnes of coal, which is 5% lower than the previously published production plan. The production plan was reduced because of the seasonal decrease in demand for sorted products from households. Coal production decreased by 16%, comparing with the level of Q4 2013 and by 3% comparing with Q1 2013. The volume of commercial products reduced by 4% to 2.02 mln tonnes. Compared with the level of same period of 2013, the volume of the company's commercial products is 15% lower. Coal processing amounted 1.71 mln tonnes which is 22% lower than in Q4 2013. That was 3% lower than in Q1 2013. The share of processed coal in the commercial products amounted to 85%. The total coal washing in the Q1 2014 decreased by 9% to 0.73 mln tonnes of which 67% relates to the washing plant Kaskad 2. The volume of coal sorting decreased by 29% compared to the Q4 2013 and amounted to 0.98 mln tonnes.
The volume of stripping remains at the level of Q4 2014 and amounted 15.14 mln cbm. The volume of blasted rock mass was 8.78 mln cbm, an increase for the quarter by 4%. The share of blasted rock in the stripping was 58%. Average stripping transportation distance in the Q1 2014 decreased by 7% to 2.60 km. The average stripping ratio in Q1 2014 increased by 18% and reached 6.50. Stripping ratio increased because of the 5% lower production plan in Q1 2014. Growth of stripping ratio in Q1 2014 was 4% above the expectations of management.
Key commercial results for Q4 2013
| | Q1 2014 | % of total | Q4 2013 | Chg | Q1 2013 | Chg 7 |
| Sales volume 8 , | 2,12 | | 3,08 | (31%) | 2,38 | (11%) |
| Export sales volume | 1,47 | 69% | 1,83 | (20%) | 1,40 | 5% |
| Domestic sales volume | 0,64 | 31% | 1,25 | (49%) | 0,98 | (35%) |
| | | | | | | |
| Own coal | 1,96 | 92% | 2,29 | (14%) | 2,12 | (8%) |
| Coal resale | 0,15 | 7% | 0,79 | (81%) | 0,26 | (42%) |
| Average selling price, RUB/tonne9 | 1 146 | | 1 165 | (2%) | 1 028 | 11% |
In Q1 sales decreased by 31% versus the volume of Q4 2014, reaching 2.12 mln tonnes of coal. Year-on-year, this figure shows a decrease by 11%. In Q1 export sales decreased by 20% to 1.47 mln tonnes. For the quarter, the share of export in total sales increased from 59% to 69%. Coal sales in the domestic market decreased by 49% due to ended heating season and reached 0.64 mln tonnes. The volume of coal purchased for resale decreased by 7% to 0.15 mln tonnes.
In Q1 2014, the average selling price of coal has decreased by 2% compared to Q4 2013 figure, amounting to RUB 1,146 per tonne. Compared to Q1 2013, the average price increased by 11%. More information about average selling prices available to investors and analysts on request.
On May 22, 2014 at 10:00 the Company plans to release its unaudited IFRS financial statements for the Q1 2014. Instead of traditional conference call we plan a special event for sell side. You can ask all your questions about operational and financial results via the phone: +7 (905) 526-41-71.
On May 22, 2014 at 13:00 the management of KTK invites sell side to a lunch in Moscow to discuss the results and strategy updates. Company will be presented by Eduard Alekseenko (First deputy CEO) and Vasily Rumyantsev (Head of Moscow office, IRO). To join this event please send your request to: vkr@oaoktk.ru/
Contacts for analysts and investors in Moscow:
Vasily Rumyantsev
Head of Moscow office, IRO
+7 (905) 526-41-71
vkr@oaoktk.ru
Contacts for media in Kemerovo:
Elena Sarycheva
Head of public affairs department
+7 (3842) 36-47-62
es@oaoktk.ru
Company at a glance:
KTK is one of the leading producers5 and exporters of thermal coal in Russia. Production assets of the Company include three current and two projected opent-pit mines in Kemerovo region, two washing plants and own rail infrostructure located in the Company’s industrial cluster. The Company operates a retail network in 4 regions of Western Siberia, supplying over 400,000 households and over 1,000 of industrial and municipal customers. The Company employs over 4,400 people. Shares of KTK are traded on MICEX, the free float is 34.39%.
Additional information about the Company and investor calendar: www.oaoktk.ru/en/investors
News and announcements (Russian only) www.facebook.com/oaoktk
Presentations: www.slideshare.net/oaoktk
Video: www.youtube.com/oaoktkru
Financial highlights under IFRS:
| RUB mln
| 2013 | 2012 | 2011 |
| Revenue | 22 490 | 23 104 | 23 939 |
| Cost of sales | 19 523 | 18 982 | 19 404 |
|
Production cash costs per tonne, RUB | 611 | 690 | 653 |
| EBITDA | 2 422 | 3 479 | 3 911 |
| EBITDA margin | 11% | 15% | 16% |
| EBITDA per tonne, RUB | 239 | 399 | 448 |
| Net profit | 640 | 1 810 | 2 018 |
| Net profit margin | 3% | 8% | 8% |
| Net debt | 3 917 | 4 681 | 2 663 |
| Net debt / EBITDA | 1,62 | 1,35 | 0,68 |
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 vkr@oaoktk.ru.
1 Change, Q1 2014/Q1 2013
2 Including washing plant Kaskad 1
3 Volume of salable output after sorting and washing of produced coal
4 Coal washing and sorting
5 Included in stripping
6 Share of coal produced in stripping
7 Change, Q1 2014/Q1 2013
8 Sales for the group of companies, including third parties coal resale
9 Excluding rail tariffs and VAT
10 Metal Expert, January 2013
