KTK

News and events

24 April 2017

Kuzbasskaya Toplivnaya Company PJSC Reports First Quarter 2017 Operating and Financial Results

KEMEROVO, Russian Federation—April24, 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 and unaudited interim consolidated financial results under IFRS for the first quarter ended March 31,2017.

 

First Quarter 2017 Key Production Results

 

Q1 2017

% of total

Q4 2016

Chg.

Q1 2016

Chg.

Coal production[1], in millions of tonnes, incl.:

3.32

 

3.12

6%

2.79

19%

Karakansky South open-pit mine

0.96

29%

0.50

92%

1.07

(10%)

Vinogradovsky open-pit mine

1.14

34%

1.13

0.9%

1.20

(5%)

Cheremshansky open-pit mine

0.89

27%

0.66

35%

0.53

68%

Bryansky open-pit mine

0.33

10%

0.83

(60%)

0.00

 -

Commercial products[2], in millions of tonnes

2.91

 

2.70

8%

2.41

21%

Coal processing[3], in millions of tonnes, incl.:

2.45

 

2.11

16%

2.19

12%

Sorted coal

1.33

54%

1.09

22%

1.19

12%

Washed coal

1.12

46%

1.02

10%

1.00

12%

Kaskad 1 washing plant

0.28

25%

0.25

12%

0.25

12%

Kaskad 2 washing plant

0.84

75%

0.76

10%

0.75

12%

Blasted rock mass[4], in millions of cbm

8.60

 

8.87

(3%)

8.39

2%

Average stripping transportation distance, km

2.71

 

2.53

7%

2.40

13%

 

  • In the first quarter of 2017 the Company produced 3.32 million tonnes of coal, equivalent to the annual production plan.
  • Coal production rose by 6% quarter-over-quarter and by 19% in yearly terms.
  • The volume of commercial products went up by 8%, to 2.91 million tonnes, compared to the fourth quarter of last year, and by 21% compared to the year-ago quarter.
  • Coal processing amounted to 2.45 million tonnes, which is 16% more than in the previous quarter and 12% more than in the first quarter of 2016.
  • First-quarter total coal washing grew by 10%, to 1.12million tonnes, of which 75% belongs to the Kaskad2 washing plant.
  • Coal sorting volume increased by 22% compared to the fourth quarter of 2016 and by 12% compared to the year-ago corresponding period.
  • The volume of blasted rock mass was 8.6 million cbm, a3% decrease for the quarter and a 2% increase for the year.
  • First-quarter average stripping transportation distance stood at 2.71 km, 7% more than in the previous quarter and 13% more that in the first quarter a year ago.

 

First Quarter 2017 Key Commercial Results

 

Q1 2017

% of total

Q4 2016

Chg.

Q1 2016

Chg.

Sales volume[5], in millions of tonnes, incl.:

3.06

 

3.27

(6%)

2.56

19%

Export sales volume

2.22

73%

1.93

15%

1.84

21%

Domestic sales volume

0.84

27%

1.34

(37%)

0.72

17%

Own coal

2.92

95%

2.91

0.3%

2.45

19%

Coal resale

0.14

5%

0.36

(61%)

0.11

27%

Average selling price, RUB/tonne[6]

1,426

 

1,465

(3%)

1,316

8%

 

  • In the first quarter sales fell by 6% versus the volume of the previous quarter, standing at 3.06 million tonnes of coal. Year-over-year, this figure shows a growth of 19%. The main increase occurred due to the exports to the Asia-Pacific region.
  • First-quarter export sales went up by 15%, to 2.22 million tonnes. Compared to the year-ago quarter, exports rose by 21%.
  • For the quarter, the share of exports in total sales was 73%.
  • First-quarter average coal selling price fell insignificantly by 3% compared to the fourth-quarter figure, amounting to RUB 1,426 per tonne. Compared to the first quarter of 2016, the average price rose by 8%.

 

First Quarter 2017Financial highlights

in millions of RUB

Q1 2017

Q4 2016

Chg

Q1 2016

Chg

Revenue

8,586

8,594

(0.1%)

6,343

35%

Cost of sales

7,355

6,785

8%

5,417

36%

Gross profit

1,231

1,809

(32%)

926

33%

Gross profit margin

14.3%

21.0%

(6.7 ppts)

14.6%

(0.3 ppts)

Selling, general and administrative expenses

608

659

(8%)

619

(2%)

Operating profit

623

1,150

(46%)

307

103%

Operating profit margin

7.3%

13.4%

(6.1 ppts)

4.8%

2.5 ppts

EBITDA[7]

1,027

1,490

(31%)

649

58%

EBITDA margin

12.0%

17.3%

(5.3 ppts)

10.2%

1.8 ppts

EBITDA per tonne, RUB

309

478

(35%)

233

33.%

Net profit

613

798

(23%)

148

314%

Net profit margin

7.1%

9.3%

(2.2 ppts)

2.3%

4.8 ppts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • In the first quarter of 2017 revenue went down slightly by 0.1% compared to the year-end level, to RUB 8,586 million, and up by 35% compared to the results of the first quarter of last year.
  • Cost of sales in the first quarter showed an 8% growth to RUB 7,355 million, while in yearly terms this was a 36% increase.
  • Selling, general and administrative expenses were down by 8% quarter-over-quarter and by 2% year-over-year.
  • In the first quarter of 2017 the Company showed an operating income of RUB 623 million, 46% lower than in the previous quarter. Compared to the year-ago results, the indicator grew by 103%.
  • Quarterly gross profit fell by 32% compared to the fourth quarter of 2016, to RUB 1,231 million. Compared to the first quarter of 2016, it grew by 33%.
  • Quarterly EBITDA reached RUB 1,027 million, showing a quarterly decline by 31% and a 58% growth in yearly terms.
  • The Company shows a net profit of RUB 613 million in the first quarter of 2017, 314% more than a year ago and 23% lower than in the fourth quarter of 2016.

 

Debt portfolio management

in millions of RUB

31.03.17

% of total

31.12.16

Chg

31.03.16

Chg

Long-term loans

5,660

68%

5,946

(5%)

8,481

(33%)

Short-term loans

2,710

32%

3,378

(20%)

1,443

88%

Total debt, incl.:

8,370

-

9,325

(10%)

9,924

(16%)

RUB loans

3,113

37%

2,304

35%

3,941

(21%)

Average interest rate for RUB loans

11.79%

  

11%

0.44 ppts

11%

0.8 ppts

USD loans

4,789

57%

6,527

(27%)

5,983

(20%)

Average interest for USD loans

4.73%

  

4.72%

0.01 ppts

4%

0.6 ppts

EUR loans

469

6%

493

(5%)

-

-

Average interest for USD loans

2.32%

-

2.32%

-

-

-

PLN loans

-

-

-

-

-

-

Average interest for USD loans

-

-

-

-

-

-

Cash and cash equivalents

3,515

-

3,837

(8%)

4,150

(15%)

Net debt

4,855

-

5,488

(11%)

5,774

(16%)

Net debt / 12M EBITDA

1.62

-

2.09

(22%)

2.41

(33%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  • Net debt at March 31, 2017 stood at RUB 4,855 million, decreasing by 11% compared to December 31, 2016. Year-over-year it went down by 16%.
  • The net debt to 12-month EBITDA ratio showed a 22% quarterly decline and stood at 1.62. To the level of the first quarter of last year, this figure dropped by 33%.
  • As of March 31, 2017, the average effective rate was 11.79% for loans denominated in RUB and 4.73% for loans denominated in USD. The loan portfolio is distributed among nine Russian and foreign banks.

 

Cash flow and investments

in millions of RUB

Q12017

Q42016

Chg

Q1 2016

Chg

Operating cash flow

1,149

506

127%

365

215%

Investment cash flow

(777)

(222)

250%

(591)

31%

Acquisition of property, plant and equipment

(797)

(262)

204%

(595)

34%

Financial cash flow

(505)

(209)

142%

1,364

n/a

Net increase / (decrease) in cash and cash equivalents

(133)

75

n/a

1,138

n/a

 

 

 

 

 

 

 

  • In the first quarter of 2017 operating cash flow amounted to RUB 1,149 million.
  • Investment cash flow stood at RUB (777) million.
  • Investment in property, plant and equipment amounted to RUB (797)million, three times more than in the previous quarter.
  • Net cash outflow from financial activities was RUB 505 million, more than double the previous quarter indicator.
  • Net decrease in cash and cash equivalents stood at RUB 133 million.

Outlook for the second quarter of 2017

  • In accordance with the production plan, the volume of coal production in the second quarter of 2017 will traditionally decrease compared to the first quarter and amount to 3 million tonnes.

Contacts for analysts, investors, and media:

Elena Sarycheva, head of strategic communications 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 two projected plots 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 Western 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%.

 

 

 

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Financial highlights under IFRS:

in millions of RUB

2016

2015

2014

Revenue

26,863

24,994

22,250

Cost of sales

23,220

20,932

18,925

Production cash costs per tonne, RUB

612

 

577

EBITDA

2,628

2,697

2,518

EBITDA margin

9.8%

10.8%

11%

EBITDA per tonne, RUB

225

245

237

Net profit

647

37

7

Net profit margin

2.4%

-

-

Net debt

5,487

5,642

6,101

Net debt / EBITDA

2.09

2.09

2.42

 

 

 

 

 

 

 

 

 

 

 

 

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

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

 

Q4 2016

Q3 2016

Chg.

FY 2016

FY 2015

Chg.

Coal production[8], in millions of tonnes, incl.:

3.12

3.04

3%

11.68

11.00

6%

Karakansky South open-pit mine

0.50

1.13

(56%)

3.37

3.96

(15%)

Vinogradovsky open-pit mine

1.13

1.20

(6%)

4.65

4.47

4%

Cheremshansky open-pit mine

0.66

0.63

5%

2.38

2.57

(7%)

Bryansky open-pit mine

0.83

0.08

937%

1.28

0.00

-

Coal processing[9], in millions of tonnes, incl.:

2.11

2.41

(12%)

8.83

8.32

6%

Sorted coal

1.09

1.38

(21%)

4.71

4.59

3%

Washed coal

1.02

1.03

(1%)

4.11

3.73

10%

Stripping, in millions ofcbm, incl.:

-

-

-

-

59.02

-

Blasted rock mass[10], in millions of cbm

8.87

8.84

0.3%

33.56

35.45

(5%)

Average stripping ratio[11]

-

-

-

-

5.40

-

[1]IncludingKaskad1washingplant

[2]Volume of salableoutputaftersorting and washing of produced coal

[3] Coal washing and sorting

[4]Includedinstripping

[5]Sales for the group of companies, including third parties coal resale

[6] Excluding rail tariffs and VAT

[7] 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 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 measure of the Company’s liquidity.

[8]Including Kaskad1 washing plant

[9]Sorted and washedcoal

[10]Includedinstripping

[11]Share of coal produced in stripping

[12]Sales for the group of companies, including third parties coal resale

[13]Excluding rail road tariff and VAT