KEMEROVO, Russian Federation—November 26, 2015 2:00 PM (UTC +8:00)—Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK), one of the largest producers and exporters of thermal coal in Russia, today announced unaudited interim consolidated financial results under IFRS for the third quarter and nine months ended September 30, 2015.
Financialhighlights
| in millions of RUB | Q31 2015 |
Q21 2015 |
Chg | 9M1 2015 |
9M1 2014 |
Chg |
| Revenue | 6 369 | 5 294 | 20% | 17 676 | 14 520 | 22% |
| Cost of sales | 5 491 | 4 559 | 20% | 14 735 | 12 898 | 14% |
| Gross profit | 878 | 735 | 19% | 2 941 | 1 622 | 81% |
| Gross profit margin | 13,8% | 13,9% | -0,1 ppts | 16,6% | 11,2% | 5,4 ppts |
| Distribution, administrative and other costs |
724 | 485 | 49% | 1 825 | 1 296 | 41% |
| Operating profit | 154 | 250 | -38% | 1 116 | 326 | 242% |
| Operating profit margin | 2,4% | 4,7% | -2.3 ppts | 6,3% | 2,2% | 4,1 ppts |
EBITDA2 |
494 | 549 | -10% | 1 995 | 1 167 | 71% |
| EBITDA margin | 7,8% | 10,4% | -2,6 ppts | 11,3% | 8,0% | 3,3% |
| EBITDA per tonne, RUB | 189 | 220 | -14% | 250 | 154 | 62% |
| Net profit | -169 | 45 | n.a. | 134 | -469 | n.a. |
| Net profit margin | - | 0,9% | - | 0,8% | - | - |
Revenue
Revenue for the nine months of 2015 was RUB 17,676 million, 22% higher than for the nine months of 2014. In the third quarter of 2015 revenue went up by 20% to RUB 6,369 million. The revenue growth was due to the segments of domestic market own coal sales and export sales. The strengthening of the US dollar contributed to revenue growth as 73% of the Company’s total revenue is denominated in foreign currency.
Operating profit and EBITDA
For the nine months operating profit rose significantly, by 242%, compared to results for the same period of 2014, and amounted to RUB 1,116 million. Gross profit in the nine months of 2015 grew by 81% to RUB 2,941 million. EBITDA showed a 71% increase compared to the nine months of 2014, reaching RUB 1,995 million. Cost of sales for the nine months of 2015 increased by 14% to RUB 14,735 million. Commercial, administrative and other expenses were up by 41% to RUB 1,825 million. In the third quarter of 2015 the Company showed an operating income of RUB 154 million, 38% lower than in the previous quarter. Gross profit grew by 19% to RUB 878 million. Quarterly EBITDA reached RUB 494 million, showing a quarterly decline by 10%. Cost of sales in the third quarter rose by 20% to RUB 5,491 million. Commercial, administrative and other expenses went up by 49% to RUB 724 million. A significant increase in commercial expenses was due to higher volume of sales in Poland and a concomitant increase in the volume of services consumed. The strengthening of the Polish zloty influenced this item of expense.
Net profit
The Company shows a net profit of RUB 134 million in the first nine months of 2015. Net loss for the same period of 2014 was RUB 469 million. In the third quarter of 2015, the Company incurred a loss in the amount of RUB 169 million. In comparison with the result of the third quarter of 2014, the Company reduced the quarterly losses by 57%.
Debt portfolio management
| in millions of RUB | 30.09.15 | % of total |
30.06.15 | Chg | 30.09.14 | Chg3 |
| Long-term loans | 8 754 | 75% | 8 340 | 5% | 7 199 | 22% |
| Short-term loans | 2 854 | 25% | 617 | 363% | 3 729 | -23% |
| Total debt, incl.: | 11 608 | 8 957 | 30% | 10 928 | 6% | |
| RUB loans | 4 008 | 35% | 2 702 | 48% | 4 591 | -13% |
| Average interest rate for RUB loans | 12,86% | 10,36% | 2,5 ppts | 10,96% | 1,9 ppts | |
| USD loans | 7 601 | 65% | 6 255 | 22% | 6 338 | 20% |
| Average interest for USD loans | 4,27% | -0,08 п.п. | 4,35% | 4,35% | -0,08 п.п. | |
| Cash and cash equivalents | 5 922 | 3 314 | 79% | 4 886 | 21% | |
| Net debt | 5 686 | 5 643 | 1% | 6 042 | -6% | |
| Net debt / 12M EBITDA | 1,70 | 1,74 | -3% | 3,29 | -48% |
Net debt at September 30, 2015 stood at RUB 5,686 million, increasing by 1% compared to June 30, 2015, down 6% year over year. The net debt to 12-month EBITDA ratio showed a 3% quarterly drop and stood at 1.70. Compared to June 30, 2014, this indicator fell by 48%. Cash and cash equivalents increased in the third quarter by 79%, to RUB 5,922 million. The management is planning to make payments on loans that were previously scheduled for 2016, as early as in the fourth quarter of 2015. The Company is one of the most reliable and efficient borrowers in the sector, which is reflected by the current interest rates for loans and credits. As of September 30, 2015, the average effective rate was 12.86% for loans denominated in RUB and 4.27% for foreign currency-denominated loans. The loan portfolio is distributed among 11 Russian and foreign banks.
Cash flow and investments
| in millions of RUB | Q3 2015 |
Q2 2015 |
Chg | 9M 2015 |
9M 2014 |
Chg |
| Operating cash flow | 1 104 | 406 | 172% | 1 115 | -607 | n.a. |
| Investment cash flow | -214 | 124 | n.a. | -489 | -454 | 8% |
| Acquisition of property, plant and equipment |
-196 | -142 | 38% | -501 | -568 | -12% |
| Financial cash flow | -2 455 | 535 | n.a. | -2 708 | 2 866 | n.a. |
| Net increase / (decrease) in cash and cash equivalents |
2 075 | -1 925 | н.п. | -2 082 | 1 805 | n.a. |
In the nine months of 2015 operating cash flow amounted to RUB 1,115 million. Investment cash flow went up by 8% to RUB (489) million. Acquisition of property, plant and equipment amounted to RUB 501 million, a decrease of 12% year on year. Net cash outflow from financial activities for the nine months was RUB 2,708 million. Net decrease in cash and cash equivalents stood at RUB 2,082 million.
In the third quarter of 2015 operating cash flow stood at RUB 1,104 million. Investment cash flow reached RUB 214 million, while RUB 196 million were invested in property, plant and equipment. Net cash flow from financial activities for the quarter was RUB 1,185 million. Net increase in cash and cash equivalents amounted to RUB 2,075 million.
Key events in the third quarter and after the reporting date
Outlook for the fourth quarter of 2015
9M 2015 Financial Results Conference Call Details
KTK’s management will host a conference call for investors and analysts followed by a Q&A session.
The Company will be represented by:
Eduard
Alekseenko – First deputy CEO
Vasily Rumyantsev – Head of Moscow office, IRO
Thursday, November
26, 2015
1:00 p.m. Moscow time (UTC +3:00)
We recommend that participants start dialing in 10 minutes before the indicated time to ensure a timely start to the conference call.
You can join the conference call by dial-in:
Russia:
Great Britain:
USA:
Contacts for analysts and investors in Moscow:
Vasily Rumyantsev
Head of Moscow office,
IRO
+7 (495) 787-68-05
vkr@oaoktk.ru
Contacts for press in
Kemerovo:
Elena Sarycheva
Head of public affairs department
+7 (3842) 36-47-62
es@oaoktk.ru
Company at a glance:
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 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%.
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
|
2014
|
2013
|
2012
|
Revenue |
22 250
|
22 490
|
23 104
|
Cost of sales |
18 925
|
19 523
|
18 982
|
|
Production cash costs per tonne, RUB
|
577
|
611
|
690
|
EBITDA |
2 518
|
2 422
|
3 479
|
|
EBITDA margin
|
11%
|
11%
|
15%
|
|
EBITDA per tonne, RUB
|
237
|
239
|
399
|
Net profit |
7
|
640
|
1 810
|
|
Net profit margin
|
-
|
3%
|
8%
|
Net debt |
6 101
|
3 917
|
4 681
|
|
Net debt / EBITDA
|
2,42
|
1,62
|
1,35
|
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.
Appendix
Production
| Q3 2015 |
Q2 2015 |
Ch. | 9M 2015 |
9M 2015 |
Ch. | |
| Coal production, mln. tonnes, incl.: | 2,62 | 2,49 | 5% | 7,99 | 7,59 | 5% |
| Karakansky South | 0,92 | 0,68 | 35% | 2,78 | 2,36 | 18% |
| Vinogradovsky | 1,03 | 1,18 | -13% | 3,40 | 2,90 | 17% |
| Cheremshansky5 | 0,67 | 0,63 | 6% | 1,81 | 2,34 | -23% |
| Coal processing6,mln. tonnes, incl.: | 2,05 | 2,01 | 2% | 6,16 | 6,29 | -2% |
| Sorted coal | 1,09 | 1,05 | 4% | 3,36 | 3,97 | -15% |
| Washed coal | 0,96 | 0,96 | - | 2,80 | 2,32 | 21% |
| Stripping, mln. cbm., incl.: | 14,55 | 15,20 | -4% | 44,74 | 45,04 | -1% |
| Blasted rock mass7 ,mln cbm. | 8,07 | 8,91 | -9% | 25,89 | 26,81 | -3% |
| Average stripping ratio 8 | 5,60 | 6,10 | -8% | 5,60 | 5,90 | -5% |
Sales
| Q3 2014 |
Q2 2014 |
Ch. | 9M 2014 |
9M 2013 |
Ch. | |
|
Sales volume9 , mln. tonnes, incl.: |
2,58 | 2,40 | 8% | 7,54 | 6,89 | 9% |
| Export sales volume | 1,70 | 1,82 | -7% | 5,12 | 5,08 | 1% |
| Domestic sales volume | 0,88 | 0,59 | 49% | 2,42 | 1,81 | 34% |
