American depositary receipts for
took a tumble today after the company posted lackluster earnings news this morning. The Russian mining and steel operator finished the day down 2.4%, or 18 cents, at $7.35.
This morning, the company said in a press release that it lost $690.7 million in the first quarter, primarily citing forex struggles, with the ruble sliding against both the dollar and the euro. The currency woes added up to a $591.9 million hit. In the year-ago period, Mechel posted a $500 million net profit.
Earnings before interest, taxes, depreciation and amortization came to a negative $474.3.
Sales also fell sequentially by 13.9% and nearly 50% from the year-ago period, to $1.2 billion. Last year, Mechel brought in revenue of $2.3 billion in the first quarter. The steep drop was led chiefly by the company's mining segment. Sales in the area sagged nearly 32% from the last quarter chiefly because of a sharp decline in demand for coking coal.
On the other hand, the company's operating income jumped to $13.8 million in the first quarter, a far cry from the outfit's $251.3 million operating loss in the previous quarter. But it was still well off the $642.1 million in operating income posted in the year-ago period.
"First quarter of 2009 was rather challenging for Mechel as well as for the whole mining and steel industry," Mechel CEO Igor Zyuzin said in an awkwardly translated press release. "
The Important factor of
the company's sustainability in
these times of crisis in
the world economy is its vertically integrated structure. It allowed us to support capacity utilization and to demonstrate flexibility in sales in difficult market environment."
Mechel is also planning to restructure more than half of its $5.8 billion in debt.
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