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ChelyabinskZincPlant: 2014 Financial Results

NEWS RELEASE                                  

                                         For Immediate Release - April 28, 2015

            Chelyabinsk Zinc Plant Announces 2014 Financial Results            

Chelyabinsk, Russia - April 28, 2015 - Chelyabinsk Zinc Plant (LSE, MICEX-RTS:
CHZN), Russia's largest producer of zinc and zinc alloys, is pleased to
announce its audited consolidated IFRS financial results for year ended
December 31, 2014.

2014 HIGHLIGHTS

  * Chelyabinsk Zinc Plant's (CZP) revenue totaled RUB 16,508 mln. 
   
  * EBITDA amounted to RUB 3,825 mln or 23% of revenue.
   
  * Net profit was RUB 2,353 mln or 14% of revenue.
   
Consolidated financial results

(in millions of Russian Roubles)         2014        2013      Change, % 
                                                                         
Revenue                                 16,508      13,062        26%    
                                                                         
Gross profit                            4,715        1,985       138%    
                                                                         
                     Gross margin, %          29%         15%            
                                                                         
EBITDA (1)                              3,825        1,077       255%    
                                                                         
                    EBITDA margin, %          23%          8%            
                                                                         
Profit / (Loss) before income tax       2,955        (214)        n/a    
                                                                         
Net profit / (Net loss)                 2,353        (208)        n/a    
                                                                         
                       Net margin, %          14%         n/a            

(1) EBITDA, for any relevant period, represents operating profit before
interest, income tax, depreciation and amortization.

EBITDA is not a measurement of CZP's operating performance presented in the
financial information, prepared in accordance with IFRS, and should not be
considered as an alternative to operating profit or any other performance
measure derived in accordance with IFRS or other relevant financial framework.

Revenue

2014 consolidated revenue amounted to RUB 16,508 mln, 26% higher than revenue
in 2013.

The average LME zinc price in 2014 increased by 13% as compared to 2013 and
amounted to US$ 2,164/tonne. The average LME lead quotes decreased by 2% to
US$ 2,096/tonne. The revenue increase was supported by the growth of exchange
rates (US Dollar, Pound Sterling, Kazakhstan Tenge) against the Russian Rouble.

Revenue structure

(in millions of Russian Roubles)         2014        2013      Change, % 
                                                                         
Zinc and zinc alloys                    11,869       9,468        25%    
                                                                         
                                 CZP        8,611       7,572         14%
                                                                         
                         Brock Metal        3,258       1,896         72%
                                                                         
Zinc tolling                            1,974        1,502        31%    
                                                                         
Lead concentrate                         540          549        (2%)    
                                                                         
                                 CZP          104          84         24%
                                                                         
                           Nova Zinc          436         465        (6%)
                                                                         
Other products                          2,125        1,543        38%    
                                                                         
Total revenue                           16,508      13,062        26%    

In 2014, CZP's revenue from sale of zinc and zinc alloys increased by 14% as
compared to 2013 and amounted to RUB 8,611 mln. The growth of revenue was due
to increase of US dollar/Russian Rouble exchange rate (2014: RUB 38.6; 2013:
RUB 31.9) and increase of average LME zinc price while reducing the sales on
the domestic markets by 17% (2014: 91.7 thousand tonnes; 2013: 110.0 thousand
tonnes).

Revenue of The Brock Metal Company Limited for 2014 amounted to RUB 3,258 mln,
72% higher than in 2013. This increase was due to 28% growth of zinc alloys
sales (2014: 32.5 thousand tonnes; 2013: 25.4 thousand tonnes), growth of Pound
Sterling/Russian Rouble exchange rate (2014: RUB 63.4; 2013: RUB 49.9) and
average LME zinc price.

CZP received revenue of RUB 1,974 mln under tolling agreement in 2014, which is
31% higher compared to 2013. The increase of tolling's volume (2014: 73.1
thousand tonnes; 2013: 55.6 thousand tonnes) was due to decrease of zinc and
zinc alloys demand on the domestic market. Fixed processing fee amounted to RUB
27,000/tonne.

Revenue from lead concentrate sales for 2014 amounted to RUB 540 mln (2013: RUB
549 mln). The decline of Nova Zinc's lead concentrate sales (2014: 5.7 thousand
dmt; 2013: 7.0 thousand dmt) was compensated by the increase of CZP's revenue
growth due to pricing factor.

In 2014, revenue from CZP's other products increased by 38% to RUB 2,125 mln as
compared to 2013. The main reasons of revenue increase were sales of
accumulated balance of precious metals and also the growth of sulphate zinc
price due to increase of average LME zinc price and US dollar/Russian Rouble
exchange rate.

Cost of Sales

(in millions of Russian Roubles)         2014        2013      Change, % 
                                                                         
Raw materials and consumables used      6,684        5,818        15%    
in production                                                            
                                                                         
Utilities and fuel                      1,594        2,326       (31%)   
                                                                         
Staff cost                              1,038         901         15%    
                                                                         
Depreciation and amortization            861          909        (5%)    
                                                                         
Repairs and maintenance                  736          768        (4%)    
                                                                         
Mineral extraction tax                   254          197         29%    
                                                                         
Other taxes                              166          130         28%    
                                                                         
Production overheads                     106          96          11%    
                                                                         
Inventory provision                       2          (21)         n/a    
                                                                         
Other costs                              162          173        (6%)    
                                                                         
Change in finished goods                 273         (287)        n/a    
                                                                         
Change in work-in-progress               (83)         67          n/a    
                                                                         
Cost of sales                           11,793      11,077        6%     

Cost of materials and consumables used primarily comprises of the cost of zinc
concentrate, zinc containing raw materials, materials for alloys production and
auxiliary materials used in the production process. The main reasons of changes
were the growth of raw materials price due to increase of average LME zinc
price and exchange rates against the Rouble that were partly compensated by the
volume decline of purchased raw materials (due to structure changes of zinc and
zinc alloys sales related to JSC «CZP»).

In 2014, costs of utilities and fuel decreased by 31% to RUB 1,594 mln mainly
due to decrease of expenses on electricity transmission services. In 2014,
expenses on electricity transmission services were accrued applying tariffs of
JSC "FGC UES" while during 2013 - applying tariffs of OJSC "IDGC of Urals". As
the result the electricity tariff for CZP in 2014 was RUB 1.82 per kWh (2013:
RUB 2.38 per kWh). Furthermore, cost of sales for 2014 includes adjustment for
the expenses for electricity transmission services accrued for the period from
1 May 2013 till 31 December 2013 for the amount of RUB 359 mln due to entry
into force of judicial decision in the action against JSC "FGC UES".

Staff costs increased by 15% as compared to 2013, to RUB 1,038 mln. The
increase was mainly due to the growth of average salaries and also the growth
of exchange rates (Pound Sterling, Kazakhstan Tenge) against Russian Rouble.

Distribution, General and Administrative Expenses

In 2014, distribution costs increased by 11% and amounted to RUB 797 mln. The
main reasons were the cost increase of sulphuric acid transportation due to
market expansion and also the cost growth of zinc alloys delivery (produced by
Brock Metal Company Limited) due to increase of sales and export share.

General and administrative expenses amounted to RUB 1,017 mln, 3% higher than
in 2013 (RUB 984 mln).

Other operating income and expenses

In 2014, other operating income totaled RUB 393 mln (2013: RUB 67 mln). The
main reason was the reversal of previously accrued impairment loss related to
LLP "Nova Zinc". Due to a change of forecast market data, such as the
Kazakhstan Tenge exchange rate to the US dollar and LME zinc and lead prices,
there were indicators that previously recognized impairment loss should be
reversed. The reversal of previously accrued loss amounted to RUB 318 mln.

In 2014, other operating expenses totaled RUB 99 mln against RUB 635 mln in
2013. In 2013, was recognized the loss from the impairment of fixed assets of
Nova Zinc at the amount of RUB 387 mln and also there were expenses for
rectification of the consequences from meteorite explosion at the amount of RUB
51 mln.

Net profit

Net profit for 2014 totalled RUB 2,353 mln compared to net loss of RUB 208 mln
for 2013. The main factors of net income growth were the increase of US dollar/
Russian Rouble exchange rate and the average LME zinc price, the decrease of
electricity tariff, the adjustment for the expenses for electricity
transmission services accrued for 2013, the reversal of previously accrued
impairment loss related to LLP "Nova Zinc".

About Chelyabinsk Zinc Plant

Chelyabinsk Zinc Plant is the leading Russian zinc producer. In 2014 the plant
produced 168,601 tonnes of saleable SHG zinc.

According to consolidated IFRS accounts, revenue in 2014 was RUB 16,508 mln and
EBITDA was RUB 3,825 mln.

Ordinary shares of CZP are traded on the Moscow exchange MICEX-RTS under ticker
CHZN and Global Depository Receipts (GDR) are traded on the London Stock
Exchange under ticker CHZN.

                                                   Investor and Media Contacts:

                                             Natalya Vasilieva, PR, ngv@zinc.ru

                                                        Tel: +7 (351) 799-01-52

                                              Evgeny Ponomarev, IR, eyp@zinc.ru

                                                          Tel: +7 963 998-55-58

This announcement may include forward-looking statements. CZP's actual results
may differ materially from those made in or suggested by the forward-looking
statements contained in this announcement. By their nature, forwarding-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. Even if
the actual results are consistent with the forward-looking statements contained
in this announcement, those results may not be indicative of results or
developments in future periods. CZP does not undertake any obligation to update
any forward-looking statements to reflect events that occur or circumstances
that arise after the date of this announcement. 



END



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