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TheStreet Open House

Mechel Reports The 2012 Financial Results

Stocks in this article: MTL

Revenue amounted to $11.3 billion

Consolidated adjusted EBITDA amounted to $1.3 billion

Net loss attributable to shareholders of Mechel OAO amounted to $1.7 billion

MOSCOW, April 15, 2013 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), a leading Russian mining and steel group, today announced financial results for the full year 2012.

Evgeny Mikhel, Mechel OAO's Chief Executive Officer, commented on the 2012 financial results:

"Last year the Group operated as key markets for mining products continued to weaken against a background of general world economic volatility. This is reflected in the worsening of the financial results of our main activities, as well as the need to book reserves and make several significant write-offs. At the same time, with respect to most of our key operational indicators Mechel demonstrated positive dynamics in 2012. Last year we also managed to do much for further improvement going forward. It is important that despite negative pricing trends our efforts at optimizing our sales and product mix as well as working capital management lead to a record operating cash flow of more than $1.3 bn, which allowed to finance our entire CAPEX at the same time repaying some debt.

"In line with the renewed strategy, aimed at deleveraging, we have already sold a large number of those assets that had the most negative impact on our financial results. We continue talks on selling the remainder of our non-strategic assets. We were also successful in improving our debt structure and continue working on it by decreasing the share of short-term debt. We are sure that the steps we are undertaking with a focus on maximizing shareholder value, will have their positive effect very shortly."

Consolidated Results For The Full Year 2012    
       
US$ thousand FY 2012 (1) FY 2011 (1)(4) Change Y-on-Y
Revenue from external customers 11,274,933 12,541,145 -10.1%
Intersegment sales 1,556,687 2,034,643 -23.5%
Operating (loss) / income (897,875) 1,840,104 --
Operating margin -8.0% 14.7% --
Net (loss) / income attributable to shareholders of Mechel OAO (1,664,568) 727,885 --
Adjusted net income  (1) (2) 23,044 736,255 -96.9%
Adjusted EBITDA (1) (3) 1,332,055 2,396,673 -44.4%
Adjusted EBITDA, margin (1) 11.8% 19.1% --
(1)   See Attachment A.
(2)   Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects)
(3)    Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests and interest income.
(4)   Adjusted to effect from discontinued operations
 
       
US$ thousand 4Q 2012 (1) 3Q 2012 (1)(4) Change Q-on-Q
Revenue from external customers 2,521,449 2,711,398 -7.0%
Intersegment sales 355,978 350,039 1.7%
Operating (loss) / income (933,369) 129,409 --
Operating margin -37.0% 4.8% --
Net (loss) / income attributable to shareholders of Mechel OAO (1,114,473) 54,911 --
Adjusted net income / (loss) (1) (2) (160,860) 134,126 --
Adjusted EBITDA (1) (3) 100,389 375,626 -73.3%
Adjusted EBITDA, margin (1) 4.0% 13.9% --
(1)   See Attachment A.
(2)   Adjusted net income is net income adjusted for effects of impairment of long-lived assets and goodwill, loss from discontinued operations and provision for amounts due from related parties (including income tax and amounts attributable to noncontrolling interests effects) 
(3)   Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, loss from discontinued operations, forex gain/(loss), net result on the disposal of non-current assets, impairment of long-lived assets and goodwill, provision for amounts due from related parties, amounts attributable to noncontrolling interests and interest income. 
(4)   Adjusted to effect from discontinued operations

The net revenue in 2012 decreased by 10.1% and amounted to $11.3 billion compared to $12.5 billion in 2011. The operating loss amounted to $897.9 million or -8% of the net revenue, compared to the operating income of $1,840.1 million or 14.7% of the net revenue in 2011.

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