Mechel said VTB Bank agreed to extend the maturity for a total of 33.8 billion rubles (about $983 million) of the company's debt. Loan repayments on the debt will start in April 2015 and finish in 2018.
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- The debt-to-equity ratio is very high at 18.21 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.32, which clearly demonstrates the inability to cover short-term cash needs.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, MECHEL OAO's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to $9.59 million or 95.30% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for MECHEL OAO is currently lower than what is desirable, coming in at 33.79%. Regardless of MTL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, MTL's net profit margin of -36.16% significantly underperformed when compared to the industry average.
- MTL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.10%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: MTL Ratings Report