KEMEROVO, Russian Federation—November 12, 2015 2:00 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 third quarter and nine months ended September 30, 2015.
Third Quarter 2015 Key Production Results
| Q3 2015 | % of total | Q2 2015 | Chg. | Q3 2014 | Chg.1 | |
| Coal production2, in millions of tonnes, incl.: | 2,62 | - | 2,49 | 5% | 2,79 | -6% |
| Karakansky South open-pit mine | 0,92 | 35% | 0,68 | 35% | 0,88 | 5% |
| Vinogradovsky open-pit mine | 1,03 | 39% | 1,18 | -13% | 1,19 | -13% |
| Cheremshansky open-pit mine | 0,67 | 26% | 0,63 | 6% | 0,72 | -7% |
|
Commercial products3 in millions, of tonnes | 2,28 | - | 2,11 | 8% | 2,47 | -8% |
| Coal processing4, in millions of tonnes, incl.: | 2,05 | 90% | 2,01 | 2% | 2,51 | -18% |
| Sorted coal | 1,09 | 53% | 1,05 | 4% | 1,72 | -37% |
| Washed coal | 0,96 | 47% | 0,96 | - | 0,79 | 22% |
| Kaskad 1 washing plant | 0,26 | 27% | 0,27 | -4% | 0,20 | 30% |
| Kaskad 2 washing plant | 0,70 | 73% | 0,69 | 1% | 0,59 | 19% |
| Stripping, in millions of cbm, incl.: | 14,55 | - | 15,20 | -4% | 14,54 | - |
| Blasted rock mass5 in millions of cbm | 8,07 | 55% | 8,91 | -9% | 9,15 | -12% |
| Average stripping ratio6 | 5,60 | - | 6,10 | -8% | 5,20 | 8% |
In the third quarter of 2015 the Company produced 2.62 million tonnes of coal, which is 3% less than forecast in the previously published production plan. Coal production increased by 5% quarter-over- quarter. The volume of commercial products grew by 8%, to 2.28 million tonnes. Compared to the third quarter of 2014, the volume of the Company's commercial products declined by 8%.
Coal processing amounted to 2.05 million tonnes, which is 2% more than in the previous quarter and 18% less than in the third quarter of 2014. Third quarter total coal washing remained at the second quarter of 2015 level, at 0.96 million tonnes, of which 73% belongs to the Kaskad 2 washing plant. Coal sorting volume grew by 4% compared to the second quarter of 2015 and amounted to 1.09 million tonnes.
Stripping volume in the third quarter of 2015 was 14.55 million cbm and fell by 4% quarter-over-quarter. The volume of blasted rock mass was 8.07 million cbm, a fall of 9% for the quarter. The share of blasted rock in the stripping was 55%. Third-quarter average stripping ratio saw a decrease by 8% quarter-over- quarter and reached 5.60 which is 1% below what was planned.
Third Quarter 2015 Key Commercial Results
| Q3 2015 | % of total | Q2 2015 | Chg. | Q3 2014 | Chg. | |
| Sales volume8, in millions of tonnes, incl.: | 2,58 | - | 2,40 | 8% | 2,89 | -11% |
| Export sales volume | 1,70 | 66% | 1,82 | -7% | 2,00 | -15% |
| Domestic sales volume | 0,88 | 34% | 0,59 | 49% | 0,89 | - |
In the third quarter sales grew by 8% versus the volume of the previous quarter, reaching 2.58 million tonnes of coal. Year-over-year, this figure shows a contraction of 15%. Third-quarter export sales fell by 7%, to 1.70 million tonnes. For the quarter, the share of export in total sales was 66%.
Key Production Results for the Nine Months to September 30, 2015
| 9M 2015 | % of total | 9M 2014 | Chg. | |
| Coal production10, in millions of tonnes, incl.: | 7,99 | - | 7,59 | 5% |
| Karakansky South open-pit mine | 2,78 | 35% | 2,36 | 18% |
| Vinogradovsky open-pit mine | 3,40 | 43% | 2,90 | 17% |
| Cheremshansky open-pit mine | 1,81 | 23% | 2,34 | -23% |
|
Commercial products11 in millions, of tonnes | 6,93 | - | 6,69 | 4% |
| Coal processing12, in millions of tonnes, incl.: | 6,16 | 89% | 6,29 | -2% |
| Sorted coal | 3,36 | 55% | 3,97 | -15% |
| Washed coal | 2,80 | 45% | 2,32 | 21% |
| Kaskad 1 washing plant | 0,78 | 28% | 0,69 | 13% |
| Kaskad 2 washing plant | 2,02 | 72% | 1,62 | 25% |
| Stripping, in millions of cbm, incl.: | 44,74 | - | 45,04 | -1% |
| Blasted rock mass13 in millions of cbm | 25,89 | 58% | 26,81 | -3% |
| Average stripping ratio14 | 5,60 | - | 5,90 | -5% |
For the nine months of 2015 the Company produced 7.99 million tonnes of coal, which is 5% more than in the previous corresponding period. Commercial product volume for the nine months stood at 6.93 million tonnes, a growth of 4% in yearly terms. Coal processing amounted to 6.16 million tonnes, which is 2% lower than in the nine months of 2014. The share of processed coal in the commercial products was 89%. Total coal washing in the nine months grew by 21% to 2.80 million tonnes. Coal sorting volume fell by 15% year-over-year and stood at 3.36 million tonnes.
During the nine months of 2015 stripping volume remained at the year-ago level and amounted to 44.74 million cbm. The volume of blasted rock mass was 25.89 million cbm, a decrease by 3%. The average stripping ratio in the period dropped by 5% year-over-year and stood at 5.60.
Key Commercial Results for the Nine Months to September 30, 2015
| 9M 2015 | % of total | 9M 2014 | Chg. | |
| Sales volume15, in millions of tonnes, incl.: | 7,54 | - | 6,89 | 9% |
| Export sales volume | 5,12 | 69% | 5,08 | 1% |
| Domestic sales volume | 2,42 | 31% | 1,81 | 34% |
In the nine months of 2015 sales increased by 9% versus the volume of the previous corresponding period, reaching 7.54 million tonnes of coal. Export sales stood at 5.12 million tonnes, representing 69% of total sales. Domestic market coal sales grew by 34%, to 2.42 million tonnes.
On November 26, 2015 the Company is planning to release its unaudited IFRS financial statements for the nine months of 2015. A conference call to discuss the financial results and answer questions will be held on the same day.
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
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. 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
| 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 |
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 vkr@oaoktk.ru.
