Chelyabinskiy Tsinkovyi Zavod PAO logo

CHZN - Chelyabinskiy Tsinkovyi Zavod PAO News Story

RUB414 -4.0  -1.0%

Last Trade - 25/04/16

Sector
Size
Market Cap £n/a
Enterprise Value £n/a
Revenue £n/a
Position in Universe th / 0

ChelyabinskZincPlant: 9M 2014 Financial Results

NEWS RELEASE                                  

                                      For Immediate Release - November 28, 2014

    Chelyabinsk Zinc Plant Announces 9M 2014 Consolidated Financial Results    

Chelyabinsk, Russia - November 28, 2014 - Chelyabinsk Zinc Plant (LSE, MICEX:
CHZN), Russia's largest producer of zinc and zinc alloys, is pleased to
announce its consolidated financial results for the nine months ended September
30, 2014 based on consistent accounting policy (Unaudited).

9M 2014 HIGHLIGHTS

  * Chelyabinsk Zinc Plant's (CZP) revenue totalled RUB 11,064 mln. 
   
  * EBITDA amounted to RUB 2,385 mln or 22% of revenue.
   
  * Net profit was RUB 1,637 mln or 15% of revenue.
   
Consolidated financial results

(in millions of Russian Roubles)          9M          9M       Change, % 
                                                                         
                                         2014        2013                
                                                                         
Revenue                                 11,064       9,773        13%    
                                                                         
Gross profit                            3,180        1,435       123%    
                                                                         
                     Gross margin, %          29%         15%            
                                                                         
EBITDA (1)                              2,385         864        176%    
                                                                         
                    EBITDA margin, %          22%          9%            
                                                                         
Profit before income tax                2,102         177       >1000%   
                                                                         
Net profit                              1,637         114       >1000%   
                                                                         
                       Net margin, %          15%          1%            

(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

In 9M 2014, consolidated revenue increased by 13% to RUB 11,064 mln as compared
to 9M 2013.

The average LME zinc price in 9M 2014 increased by 12% as compared to the
relevant period of the previous year and amounted to US$ 2,140/tonne. The
average LME lead quotes remained at the level of 9M 2013 (US$ 2,128/tonne). US
Dollar/Russian Rouble average exchange rate increased by 12% to RUB 35.39/US
Dollar.

Revenue structure

(in millions of Russian Roubles)          9M          9M       Change, % 
                                                                         
                                         2014        2013                
                                                                         
Zinc and zinc alloys                    7,957        7,006        14%    
                                                                         
                                 CZP        5,748       5,624          2%
                                                                         
                         Brock Metal        2,209       1,382         60%
                                                                         
Zinc tolling                            1,627        1,125        45%    
                                                                         
Lead concentrate                         385          421        (8%)    
                                                                         
                                 CZP           73          64         14%
                                                                         
                           Nova Zinc          312         357       (13%)
                                                                         
Other products                          1,095        1,221       (10%)   
                                                                         
Total revenue                           11,064       9,773        13%    

In 9M 2014, CZP's revenue from sale of zinc and zinc alloys increased by 2% as
compared to the 9M 2013 and amounted to RUB 5,748 mln. The growth of revenue
was due to increase of average LME zinc price and US dollar exchange rate while
reducing the sales on the domestic market by 17.6% (9M 2014: 67.6 thousand
tonnes; 9M 2013: 82.0 thousand tonnes).

Revenue of The Brock Metal Company Limited for 9M 2014 amounted to RUB 2,209
mln, 60% higher than in 9M 2013. This increase was due to 29% growth of zinc
alloys sales (9M 2014: 24.1 thousand tonnes; 9M 2013: 18.7 thousand tonnes),
increase of average LME zinc price and growth of Pound Sterling (GBP)/Russian
Rouble average exchange rate (9M 2014: RUB 59.23; 9M 2013: RUB 48.89).

CZP received revenue of RUB 1,627 mln under tolling agreement in 9M 2014, which
is 45% higher compared to 9M 2013. The increase of tolling's volume (9M 2014:
60.2 thousand tonnes; 9M 2013: 41.7 thousand tonnes) was due to decrease of
zinc and zinc alloys sales on the domestic market. Fixed processing fee
amounted to RUB 27,000/tonne.

Revenue from lead concentrate sales for 9M 2014 amounted to RUB 385 mln (9M
2013: RUB 421 mln). The decrease of revenue was due to decline of Nova Zinc
lead concentrate sales (9M 2014: 5.2 thousand dmt; 9M 2013: 6.2 thousand dmt)

In 9M 2014, revenue from CZP's other by-products decreased by 10% to RUB 1,095
mln as compared to 9M 2013. The main reason of revenue decrease was the
temporary interruption of precious metals sales due to prices reduction
(average official prices for silver in 9M 2014: RUB 22.7/gram, in 9M 2013: RUB
25.2/gram).

Cost of Sales

(in millions of Russian Roubles)          9M          9M        Change,  
                                                                         
                                         2014        2013          %     
                                                                         
Raw materials and consumables used      4,722        4,432        7%     
in production                                                            
                                                                         
Utilities and fuel                      1,099        1,718       (36%)   
                                                                         
Staff cost                               709          629         13%    
                                                                         
Depreciation and amortization            611          681        (10%)   
                                                                         
Repairs and maintenance                  509          555        (8%)    
                                                                         
Mineral extraction tax                   169          142         19%    
                                                                         
Other taxes                              134          140        (5%)    
                                                                         
Production overheads                      70          67          4%     
                                                                         
Change in work-in-progress                18          111        (84%)   
                                                                         
Inventory provision                       3           (8)         n/a    
                                                                         
Change in finished goods                (282)        (229)        n/a    
                                                                         
Other costs                              121          100         21%    
                                                                         
Cost of sales                           7,883        8,338       (5%)    

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 9M 2014, costs of utilities and fuel decreased by 36% to RUB 1,099 mln
mainly due to decrease of expenses on electricity transmission services. In 9M
2014 expenses on electricity transmission services were accrued applying
tariffs of OJSC "FSK UES" while during 9M 2013 - applying tariffs of OJSC
"MRSK-Ural". As the result electricity tariff for CZP in 9M 2014 was RUB 1.83
per kWh while in 9M 2013 - RUB 2.35 per kWh.

Furthermore, cost of sales for 9M 2014 includes adjustment for the expense 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 termination of litigation
between JSC "CZP" and OJSC "FSK".

Staff costs increased by 13% as compared to the relevant period of the previous
year, to RUB 709 mln. The increase was due to the growth of average salaries.

Distribution, General and Administrative Expenses

In 9M 2014, distribution costs increased by 11% and amounted to RUB 582 mln.
The main reason was the increase of sulphuric acid transportation costs due to
market expansion.

General and administrative expenses amounted to RUB 689 mln in 9M 2014, 5%
higher than in 9M 2013.

Other operating income and expenses

In 9M 2014, other operating income totaled RUB 364 mln (9M 2013: RUB 42 mln).
The main reason was the reversal of previously accrued impairment loss related
to LLP "Nova Zinc".

As at 31 December 2013 an impairment loss was recognized in the amount of RUB
387 mln, related to LLP "Nova Zinc". Due to a change of forecast market data,
such as the Tenge exchange rate to the US dollar and projected zinc and lead
LME (London Metal Exchange) prices, there are indicators that previously
recognized impairment loss should be reversed.

The carrying amount of assets was recovered to their book value, that would
have had been should the impairment loss had never been recognized as at 31
December 2013. The reversal of previously accrued loss amounted to RUB 318 mln.

In 9M 2014, other operating expenses totaled RUB 245 mln against RUB 159 mln in
9M 2013. The main reason was accrued provision on potential liabilities of LLP
"Nova Zinc" relating to the environmental disputes including environmental, tax
and administrative fines and penalties for the period from 1 January 2013 to 30
September 2014.

Net profit

Net profit for 9M 2014 totalled RUB 1,637 mln compared to net profit of RUB 114
mln for 9M 2013. Net income growth was due to the increase of revenue with a
simultaneous decrease of cost of sales and also to 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 2013 the plant
produced 166,357 tonnes of saleable SHG zinc.

According to consolidated IFRS accounts, revenue in 2013 was RUB 13,062 mln and
EBITDA was RUB 1,077 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. 

'000 RUB                                        30 September    31 December   
                                                                               
                                                     2014         2013       
                                                                               
Assets                                                                         
                                                                               
Property, plant and equipment                    5,968,835    5,119,417        
                                                                               
Advances for acquisition of                        183,810      179,814          
property, plant and equipment                                                  
                                                                               
Intangible assets                                  101,544    94,883           
                                                                               
Bank deposits                                            -    686,301          
                                                                               
Deferred tax assets                                      -    46,373           
                                                                               
Other non-current assets                               495    377              
                                                                               
Non-current assets                               6,254,684    6,127,165        
                                                                               
Inventories                                      2,588,781    2,602,039        
                                                                               
Trade and other receivables                      4,252,087    2,456,636        
                                                                               
Current income tax prepayment                          952    60,536           
                                                                               
Loans issued                                         2,080    2,125            
                                                                               
Short-term financial assets                          3,642    5,636            
                                                                               
Bank deposits                                      795,000    452,969          
                                                                               
Cash and cash equivalents                          545,214    444,827          
                                                                               
Restricted cash                                      1,184    959              
                                                                               
Current assets                                   8,188,940    6,025,727        
                                                                               
Total assets                                    14,443,624    12,152,892       

JSC CHELYABINSK ZINC PLANT

Consolidated Interim Condensed Statement of Financial Position as at 30
September 2014 (unaudited)

'000 RUB                          Note    30 September           31 December   
                                                                               
                                              2014                  2013       
                                                                               
Equity                                                                         
                                                                               
Share capital                                     127,635     127,635          
                                                                               
Share premium                                   1,375,231     1,375,231        
                                                                               
Legal reserve                                       3,011     3,011            
                                                                               
Translation reserve                               154,946     (16,893)         
                                                                               
Retained earnings                              10,611,339     8,974,372        
                                                                               
Total equity                                   12,272,162     10,463,356       
                                                                               
Liabilities                                                                    
                                                                               
Provision for asset retirement                    106,934     100,693          
obligations                                                                    
                                                                               
Deferred income tax liabilities                   211,298     137,984          
                                                                               
Other non-current liabilities                      56,78
© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.