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KEMEROVO, Russian Federation—January31, 20172:00 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 results for the fourth quarter and full year ended December 31,2016.

 

Fourth Quarter 2016 Key Production Results

	Q4 2016	% of total	Q3 2016	Chg.	Q4 2015	Chg.
Coal production[1], in millions of tonnes, incl.:	3.12		3.04	3%	3.01	4%
Karakansky South open-pit mine	0.50	16%	1.13	(56%)	1.19	(58%)
Vinogradovsky open-pit mine	1.13	36%	1.20	(6%)	1.07	6%
Cheremshansky open-pit mine	0.66	21%	0.63	5%	0.76	(13%)
Bryansky open-pit mine	0.83	27%	0.08	937%	0.00	-
Commercial products[2], in millions of tonnes	2.70		2.65	2%	2.66	1%
Coal processing[3], in millions of tonnes, incl.:	2.11		2.41	(12%)	2.16	(2%)
Sorted coal	1.09	52%	1.38	(21%)	1.23	(11%)
Washed coal	1.02	48%	1.03	(1%)	0.93	10%
Kaskad 1 washing plant	0.25	25%	0.24	4%	0.24	4%
Kaskad 2 washing plant	0.76	75%	0.79	(4%)	0.69	10%
Blasted rock mass[4], in millions of cbm	8.87		8.84	0.3%	9.60	(8%)
Average stripping transportation distance, km	2.53		2.80	(10%)	2.60	(2%)

 

• In the fourth quarter of 2016 the Company produced 3.12 million tonnes of coal, an insignificant increase both quarter-over-quarter and over the year-ago period.
• The volume of commercial products remained at the level of previous periods, reaching 2.7 million tonnes.
• Coal processing remained just about at the year-ago level, falling by a mere 2%, and amounted to 2.11 million tonnes, which is 12% less than in the third quarter of 2016.
• Total coal washing rose by 3% compared to the 2015 indicator, to 1.02million tonnes, of which 75% belongs to the Kaskad2 washing plant.
• Coal sorting volume fell by 21% compared to the third quarter of 2016 and by 11% to the year-ago level, and amounted to 1.09million tonnes.
• The volume of blasted rock mass was 8.87 million cbm, a slight decrease for the quarter and 8% less compared to the year-ago period.

 

Fourth Quarter 2016 Key Commercial Results

	Q4 2016	% of total	Q3 2016	Chg.	Q4 2015	Chg.[5]
Sales volume[6], in millions of tonnes, incl.:	3.27	-	2.94	11%	3.15	4%
Export sales volume	1.93	59%	1.94	(0.5%)	1.78	8%
Domestic sales volume	1.34	41%	0.99	35%	1.36	(1%)
Own coal	2.91	89%	2.49	17%	2.65	10%
Coal resale	0.36	11%	0.45	(20%)	0.49	(26%)
Average selling price, RUB/tonne[7]	1,465	-	1,326	10%	1,352	7%

 

• In the fourth quarter sales grew by 11% versus the volume of the previous quarter, reaching 3.27 million tonnes of coal. Year-over-year this figure shows a contraction by 4%. Fourth-quarter export sales insignificantly fell by 0.5% to the third-quarter level, to 1.93 million tonnes, while compared to the year-ago period, the share of export in total sales grew by 8%.
• For the quarter, the share of export in total sales was 59%.
• Domestic sales in the fourth quarter demonstrate a seasonal growth of 35% to 1.34 million tonnes.
• The share of domestic sales was 89%, while coal resale declined by 20% and 26%, respectively.
• Average coal selling price slightly rose compared to the third-quarter level by 10% and by 7% compared to the fourth quarter of the last year.
•  

Full Year 2015Key Production Results

	FY 2016	% of total	FY 2015	Chg.
Coal production[8], in millions of tonnes, incl.:	11.68		11.00	6%
Karakansky South open-pit mine	3.37	29%	3.96	(15%)
Vinogradovsky open-pit mine	4.65	40%	4.47	4%
Cheremshansky open-pit mine	2.38	20%	2.57	(7%)
Bryansky open-pit mine	1.28	11%	0.00	-
Commercial products[9], in millions of tonnes	10.12		9.60	5%
Coal processing[10], in millions of tonnes, incl.:	8.83		8.32	6%
Sorted coal	4.71	53%	4.59	3%
Washed coal	4.11	47%	3.73	10%
Kaskad 1 washing plant	1.01	25%	1.02	(1%)
Kaskad 2 washing plant	3.11	76%	2.71	15%
Blasted rock mass[11], in millions of cbm	33.56		35.45	(5%)
Average stripping transportation distance, km	2.55		2.60	(2%)

 

For the full year 2016 the Company produced 11.68 million tonnes of coal, which is 6% more than in 2015.

Commercial product volume in 2016 stood at 10.12 million tonnes, an increase of 5% in yearly terms. Coal processing amounted to 8.83 million tonnes, 6% more than in 2015.

The share of processed coal in the commercial products was 87%.

Total coal washing grew by 10% to 4.11 million tonnes.

Coal sorting volume increased slightly, by 3%, to 4.71 million tonnes.

The volume of blasted rock mass was 33.56 million cbm, a decline by 5%.

The average stripping transportation distance in the period dropped by 2% year-over-year and reached 2.55 km.

 

Full Year 2016Key Commercial Results

	FY2016	% of total	FY2015	Chg.
Sales volume[12], in millions of tonnes, incl.:	11.11	-	10.69	4%
Export sales volume
Domestic sales volume	7.47	67%	6.90	8%
	3.63	33%	3.78	(4%)
Own coal
Coal resale	10.13	91%	9.48	7%
	0.98	9%	1.20	(18%)
Average selling price. RUB/tonne[13]	1 278	-	1 330	(4%)

 

In 2016 sales increased by 4% versus the volume of the previous year, reaching 11.11 million tonnes of coal.

Export sales amountedto7.47 million tonnes, representing 67% of total sales. Domestic-market coal sales fell by 8% compared to 2015, to 3.63 million tonnes.

Own-coal sales share was 91%.

Coal resale share declined by 18% compared to the year-ago level. Average selling price decreased by 4% compared to the level of year 2016.

 

On April 6, 2017 the Company is planning to release its consolidated audited IFRS financial statements for the full year2016.

Contacts for media in Kemerovo: Elena Sarycheva Head of public affairs department +7 (3842) 36-47-62 es@oaoktk.ru www.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. The Company’s production assets include four current plots and one projected plot at the Vinogradovsky mine in Kemerovo region, two washing plants and own railroad infrastructure located in the same industrial cluster. The Company operates retail networks in four regions of Western Siberia and in Poland, and 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	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

 

Additional information about the Company and investor calendar: www.oaoktk.ru/en/investors