Against this background, the company optimizes production and investments. "We have seen that every ton that we extract and sell brings additional losses, delays cash flow. Therefore, after long discussions, we decided to reduce production volumes."
In particular, the group has "seriously reduced production volumes" of unprofitable grades of coal at Yuzhny Kuzbass. Production at Yakutugl also had to be significantly reduced as a result of the fire at the enrichment plant that occurred in May, although initially, according to Korzhov, it was planned to reduce production by no more than 10-15%. The company expects to restart the factory in October. According to Korzhov, the enrichment of ordinary coal from Yakutia is temporarily carried out at the Yuzhny Kuzbass factory.
In 2025, Mechel predicts a 25% decrease in coal shipments compared to last year.
Mechel's capital expenditures in 2025 will amount to 9.4 billion rubles. Of these, 7.8 billion rubles were allocated to maintain core operations, and the remainder was allocated to complete previously initiated investment projects, including the construction of an air separation plant at the Chelyabinsk Metallurgical Combine.
Korzhov said that Mechel is considering the possibility of selling a number of assets, the withdrawal of which outside the group's perimeter will not affect its cash flow and operating activities. First of all, we are talking about Kuzbassenergosbyt and Yuzhno-Kuzbass GRES. Other assets that are potentially being considered for sale include the Vyartsilsky Hardware Plant, the South Ural Nickel Plant and Moskoks.
At the end of last year, Mechel agreed with creditors to postpone the repayment of 35 billion rubles of the principal debt from 2025-2026 to 2027-2030. A credit limit of 28 billion rubles was also opened in one of the Russian banks. to replenish working capital until 2030. At the end of 2024, the group's total debt amounted to 230.8 billion rubles, while 221.7 billion rubles were recorded as short-term. Mechel's main creditors are Gazprombank and VTB.
89% of Mechel's debt is denominated in rubles at a floating rate linked to the Central Bank's key rate. Foreign currency debt (11%) is mainly denominated in yuan, and its value is more than twice as low.
