Russian thermal coal producer, Kuzbasskaya Fuel, has posted a 2Q 2011 net profit of $200 million
The net profit declined 66% quarter on quarter from $593 million posted for the 1Q 2011 with EBITDA also down 45% quarter on quarter to $525 million on the back of a 6% slide in revenues to $4.937 billion.
The 2Q figures made for a 1H net profit of $793 million compared with $4 million posted for the same period in 2010, with EBITDA jumping 173% year on year to $1.473 billion on the back of an 80% year on year increase in revenues to $10.182 billion.
The company attributed the results to a seasonal decrease in coal sales volumes on the domestic market and an increase in cost of sales. CEO, Igor Prokudin, said production growth and a focus on costs would improve future results. Prokudin noted the advantages that exports provided in terms of overcoming domestic seasonal factors, and that stripping work completed during 1H 2011 would underpin future profitability improvements.
“The increase in the volume of export sales, which are distributed more or less equally throughout the year, allowed us to avoid the reduction of production volumes and supported the Company’s margins. During the quarter we made a large volume of stripping work, part of which was made to extract coal only in the second half of the year, because we plan to increase production and sales volumes. In this context the quarterly stripping ratio increased from 8 to 8.7, and the total Q2 production cash cost per 1 tonne of coal increased by 9% to 688 roubles having reached an annual maximum. We expect a decrease in this cost during Q3-Q4, which, together with growth of production volumes, may positively impact on the Company’s basic profitability indicators.”