KEMEROVO, Russian Federation—May23, 20161:00 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 first quarter ended March31,2015.
Financial highlights
| in millions of RUB | Q1 2016 | Q4 2015 | Chg. | Q1 2015 | Chg.1 |
| Revenue | 6 343 | 7 318 | -13% | 6 013 | 5,5% |
| Cost of sales | 5 417 | 6 197 | -13% | 4 685 | 16% |
| Gross profit | 926 | 1 121 | -17,4% | 1 328 | -30% |
| Gross profit margin | 14,6% | 15,3% | -0,7 п.п. | 22,1% | -7,5 п.п. |
| Selling, general and administrative expenses | 619 | 683 | -9% | 616 | -0,5% |
| Operating profit | 307 | 438 | -30% | 712 | -57% |
| Operating profit margin | 4,8% | 6,0% | -1,2 п.п. | 11,8% | -7,0 п.п. |
EBITDA2 |
649 | 702 | -7,5% | 952 | -32% |
| EBITDA margin | 10,2% | 9,6% | 0,6 п.п. | 15,8% | -5,6 п.п. |
| EBITDA per tonne, RUB | 233 | 233 | - | 331 | -29,6% |
| Net profit | 148 | -97 | - | 258 | -43% |
| Net profit margin | 2,3% | - | - | 4,3% | -2,0 п.п. |
Revenue
Revenue for the first quarter of 2016grew by 5.5% compared to the year-ago quarter, toRUB6, 343 million, 13% lower than in the fourth quarter of 2015.
Cost of sales and expenses
The cost of sales has dropped by 13% to the level of the fourth quarter and increased by 16% compared with the figure for the same period last year.
Selling, general and administrative expenses remained approximately at the level of the first quarter and decreased by 9% compared to the fourth quarter of last year.
Operating profit and EBITDA
In the first quarter of 2016 the company showed an operating profit of RUB 307 million,30% lower than in the fourth quarter of 2015 and 57% less than in the first quarter of 2015.Gross profit fell by 17% over the fourth-quarter result, to RUB 926 million, a decrease of 30% compared to the year-ago quarter
EBITDA reached RUB 649 million, showing a7.5%quarterly decrease and falling by 32% compared to the first quarter of 2015.
Net profit
The Company shows a net profit of RUB 148 million in the first quarter of 2016 compared to a net loss of RUB 97 million in the fourth quarter of 2015and a profit of RUB 258 million a year ago.
Debt portfolio management
| in millions of RUB | 31.03.16 | % of total | 31.12.15 | Chg. | 31.03.15 | Chg. |
| Long-term loans | 8 481 | 85% | 7 379 | 15% | 8 698 | -2,5% |
| Short-term loans | 1 443 | 15% | 41 653 | -13% | 3 113 | -53,6% |
| Total debt, incl.: | 9 924 | 9 032 | 10% | 11 811 | -15,98% | |
| RUB loans | 3 941 | 40% | 2 651 | 49% | 4 366 | -9,7% |
| Average interest rate for RUB loans | 10,99% | 9,25% | 1,74 п.п. | 9,77% | 1,22 п.п. | |
| USD loans | 5 983 | 60% | 6 071 | -1,4% | 6 760 | -11,5% |
| Average interest for USD loans | 4,13% | 4,13% | 0 п.п. | 4,33% | -0,2 п.п. | |
| PLN loans | - | - | 310 | - | 685 | - |
| Average interest for PLN loans | - | - | 2,87% | - | 3,09% | - |
| Cash and cash equivalents | 4 150 | 3 390 | 22% | 5 326 | -22% | |
| Net debt | 5 774 | 5 642 | 2% | 6 485 | -11% | |
| Net debt / 12M EBITDA | 2,41 | 2,09 | 15% | 2,27 | 6% |
Net debt at March 31, 2016stood at RUB 5,774 million, increasing insignificantly by 2% compared to December 31, 2015and down 11% year over year.
The net debt to 12-month EBITDA ratioshowed a 15% quarterly rise and stood at 2.41.
The loan portfolio is distributed among 10 Russian and foreign banks.
Cash flow and investments
| in millions of RUB | Q12016 | Q42015 | Chg. | Q1 2015 | Chg. |
| Operating cash flow | 365 | 1 203 | -70% | -395 | н.п. |
| Investment cash flow | -591 | -360 | 64% | -399 | 48% |
| Acquisition of property, plant and equipment | -595 | -470 | 27% | -163 | 265% |
| Financial cash flow | 1 364 | -4 428 | н.п | -1 438 | н.п |
| Net increase / (decrease) in cash and cash equivalents | 1 138 | -2 955 | н.п | -2 232 | н.п |
In first quarter of 2016 operating cash flow amounted to RUB 365 million.
Investment cash flow was RUB (591) million. Acquisition of property, plant and equipment stood at RUB 595 million.
Net cash flow from financial activities for the quarter was RUB 1,364 million.
Net increase in cash and cash equivalents stood at RUB 1,138 million.
Key events after the reporting date
Contacts for analysts, investors, and press:
Elena Sarycheva, head of public affairs department
+7 (3842) 36-47-62
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 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
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Video www.youtube.com/oaoktkru
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 |
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.
Appendix
Production
| Q1 2016 | Share | Q4 2015 2015 | Chg. | Q1 2015 | Chg. | |
| Coal production3, in millions of tonnes, incl.: | 2,79 | 3,01 | -7,3% | 2,88 | -3,1% | |
| Karakansky South | 1,07 | 38% | 1,19 | -10,1% | 1,18 | -9,3% |
| Vinogradovsky | 1,20 | 43% | 1,07 | 12,1% | 1,19 | 0,8% |
| Cheremshansky | 0,53 | 19% | 0,76 | -30,3% | 0,51 | 3,9% |
| Commercial products4 , in millions of tonnes | 2,41 | 2,66 | -9,4% | 2,54 | -5,1% | |
| Coal processing5, in millions of tonnes, incl.: | 2,19 | 2,16 | 1,4% | 2,09 | 4,8% | |
| Sorted coal | 1,19 | 54% | 1,23 | -3,3% | 1,21 | -1,7% |
| Washed coal | 1,00 | 46% | 0,93 | 7,5% | 0,88 | 13,6% |
| Kaskad 1 washingplant | 0,96 | 0,96 | - | 2,80 | 2,32 | 21% |
| Kaskad2 washing plant | 0,75 | 75% | 0,69 | 8,7% | 0,63 | 19% |
| Stripping, in millions ofcbm, incl.: | 15,29 | 14,28 | 7,1% | 14,96 | 2,2% | |
| Blasted rock mass6 , in millions of cbm | 8,39 | 9,60 | -12,6% | 8,92 | -6% | |
| Average stripping ratio 7 | 5,50 | 4,70 | 17% | 5,20 | 6% | |
| Average stripping transportation distance, km | 2,40 | 2,60 | -7,7% | 2,70 | -11,1% |
Sales
| Q3 2015 | Q2 2015 | Chg. 2015 | 9M 2015 | 9M 2014 | Chg. | |
| Sales volume8 , in millions oftonnes, incl.: | 2,56 | 3,14 | -18,5% | 2,56 | - | |
| Export sales volume | 1,84 | 72% | 1,78 | 3,4% | 1,60 | 15,0% |
| Domestic sales volume | 0,72 | 28% | 1,36 | -47,1% | 0,95 | -24,2% |
| Own coal | 2,45 | 96% | 2,65 | -7,5% | 2,37 | 3,4% |
| Coal resale | 0,11 | 4% | 0,49 | -77,6% | 0,19 | -42,1% |
| Average selling price, RUB/tonne9 | 1316 | 1352 | -2,7% | 1 350 | -2,5% |
