Kemerovo, Russian Federation
OJSC “Kuzbasskaya Toplivnaya Company” (RTS/MICEX: “KBTK”), one of the fastest-growing thermal coal producers in Russia, is pleased to announce its operational results for the first quarter ended 31 March 2010.
| Q1 2010 | Q1 2009 | Change, % | |
| Coal production (mln. tonnes) | 1,50 | 1,39 | 8% |
| Sorted coal (mln. tonnes) | 0,91 | 0,57 | 60% |
| Sales volume (mln. tonnes) | 1,80 | 1,75 | 3% |
| Export sales volume (mln. tonnes) | 0,74 | 0,65 | 14% |
| Domestic sales volume (mln. tonnes) | 1,05 | 1,10 | -4% |
During the first quarter of 2010 the Company has increased coal production volume by 8% to 1.50 mln. tonnes (Q1 2009: 1.39 mln. tonnes), while volume of coal sorted by coal-crushing and screening units increased 60% year-on-year to 0.91 mln. tonnes (Q1 2009: 0.57 mln. tonnes).
In Q1 2010 coal sales volume increased by 3% to 1.80 mln. tonnes (Q1 2009: 1.75 mln tonnes), including 1.37 mln. tonnes of own coal and 0.38 of third-parties coal. Export sales volume increased by 14% year-on-year and amounted to 0.74 mln. tonnes (Q1 2009: 0.65 mln. tonnes) or 41.1% (Q1 2009: 37.2%) of Company’s total sales of coal by volume. In Q1 2010 KTK has expanded the geography of its export sales with largest markets being South Korea – 53% of Company’s total export sales (Q1 2009: 42%), Poland – 31% (Q1 2009: 57.9%), Ukraine – 10% (Q1 2009: n/a), Spain – 4% (Q1 2009: n/a), Turkey – 1% (Q1 2009: n/a).
In Q1 2010 the price for thermal coal has started to grow as a result average domestic coal prices net of VAT and railroad tariffs increased 20% compared to Q4 2009 and export prices net of railroad tariffs increased 9% quarter-on-quarter.
Compared to the same period last year average domestic coal prices net of VAT and railroad tariffs increased by 16% year-on-year to RUB 977 per tonne (Q1 2009: RUB 841 per tonne, mostly as a result of growth in sorted coal volume sales growth. Export prices net of railroad tariffs decreased year-on-year by 32% to RUB 882 per tonne (Q1 2009: RUB 1,297 per tonne). The significant decrease in export prices year-on-year is related to the base effect as in Q1 2009 the company sold coal by the contracts signed in 2008 when the prices were record high, and in Q1 2010 the company sold coal by the contracts signed in Q4 2009 when the prices were affected by the crisis and decrease in coal consumption.
For more information please contact:
Financial Dynamics Moscow
Tatiana Kosheleva
Leonid Solovyev
+7 495 795 06 23
Company Overview
OJSC Kuzbasskaya Toplivnaya Company (“KTK” or the “Company”), is one of the fastest-growing thermal coal producers in Russia. In terms of the 2009 production volume, it was ranked 7th among the largest thermal coal producers in the country. In the ten years since its establishment in 2000, the Company has commissioned and launched three open-pit mines, achieving annual production volume of 6.15 million tonnes of coal in 2009. The Company expects to continue to grow its production volume, in particular, following the launch of the Cheremshansky mine in 2008 and ongoing investments into its high performance modern mining technology, aimed at achieving the aggregate structural capacity 1 of existing mines of 11 million tonnes of coal per year.
According to IMC, the Company’s JORC coal resources totalled 409.3 million tonnes of ROM coal as of January 1, 2010, of which 191.6 million tonnes were proven and probable reserves, recoverable during the period of 2010-2029. The Company produces exclusively high quality thermal coal, classified as grade “D” under the Russian classification system, with a naturally low sulphur and phosphorus content, as well as a relatively high calorific value.
The Company conducts mining operations at three open-pit mines, located in the Kuzbass area, Russia’s largest coal producing region. The Company’s mining operations are supported by an extensive production and logistics infrastructure, including its own railway network and facilities, which enable the Company to transport 100% of produced coal from the open-pit mines to the main railway hub at the long-distance railway network, operated by the Russian Railways. Furthermore, as the Company’s mines are compactly located within 5 km of each other, a number of operations are conducted centrally, thereby minimising overhead costs and expenses.
In 2009, the Company’s total coal sales amounted to 7.4 million tonnes of coal, of which 6.0 million tonnes were extracted by the Company and 1.4 million tonnes were retailed after purchasing from other coal producers. The Company maintains a diversified sales structure balanced between export and domestic sales with approximately 64% of the coal sold to domestic consumers and approximately 36% exported, primarily to Poland, South Korea and China, in 2009.
The Company’s strong regional presence is supported by an extensive retail distribution network, located throughout the Kemerovo, Novosibirsk, Omsk and Altay regions of Western Siberia. As of 31 December 2009, the Company’s distribution network included 60 owned and operated points of sale and delivered 2.8 million tonnes of coal in 2009, positioning KTK as one of the principal suppliers of coal to retail customers in Western Siberia.
FY 2009 Financial Highlights
For more information please contact:
Financial Dynamics Moscow
Oleg Leonov
Leonid Solovyev
+7 495 795 06 23
1 The maximum production capacity that the Company believes could be achieved (taking into account projected stoppages for planned repair and maintenance) in an annual period if the Company were able to process all the coal that could be mined using the Company’s existing mine facilities after acquisition of certain mining and transportation equipment in accordance with its current capital expenditure program
2 EBITDA for each period is defined as results from operating activities, adjusted for amortisation and depreciation, impairment loss and loss on disposal of property, plant and equipment. EBITDA is not a measurement of the 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 a measure of the Company’s liquidity.
