Mechel 9M 2014 Financial Results

Mechel OAO, Russia's leading mining and metallurgical company that unites producers of iron ore and coal, steel, rolled products and ferroalloys, as well as electricity and heat, has announced its financial results for 9M 2014.

Oleg Korzhov, General Director of Mechel OAO, said that this year the company worked in an environment where the situation has changed dynamically, both in the economy as a whole and in the markets for products that the company produces and sells. A significant drop in prices for iron ore and coal, changes in ruble exchange rates and other factors led to uneven dynamics of the company's financial results from quarter to quarter.

In the third quarter of 2014, the steel segment of Mechel OAO demonstrated stronger results, achieving an increase in EBITDA margin to 14 percent, and in the first nine months of this year, the share in consolidated EBITDA increased to almost 45 percent. For 9 months of 2014, revenue amounted to $ 5.0 billion, EBITDA (a) - $ 470 million, net loss - $ 1.2 billion, net debt - $ 7, 836 billion. At the same time, net debt fell by 14 percent on an annualized level, which is associated with the redemption of bonds under put options, as well as the devaluation of the ruble.

For nine months, the Group has increased profit and EBITDA every quarter, reducing its net loss by almost half compared to the same period last year. This proves that the company's development strategy, approved in May 2012, which is aimed at developing the main business segments and increasing the productivity of the Group's key enterprises, along with the disposal of non-core assets, was correct. The results achieved reflect the effectiveness of the measures taken in the implementation of this strategy.