Consolidated revenue - 222.8 bln rubles (+13% compared to 9M2016) EBITDA *   - 59.1 bln rubles (+42% compared to 9M2016) Net profit, attributable to equity shareholders of Mechel PAO - 11.1 bln rubles

MOSCOW, Nov. 28, 2017 (GLOBE NEWSWIRE) -- Mechel PAO (MOEX:MTLR) (NYSE:MTL) , a leading Russian mining and steel group, announces financial results for the 9M 2017.

Mechel PAO's Chief Executive Officer Oleg Korzhov commented:

"The company's financial results for 3Q2017 and 9M2017 were better than both 2Q2017 and 9M2017. The improvement was due to a favorable market situation as well as efforts made by the company to maintain its production volumes, optimize its products range, attract new customers and expand into new markets, increasing internal efficiency and cost control.

"Prices for our coal products remain comfortable both domestically and internationally. The steel product market, which was weak in the first half of this year, went back to normal by mid-year due to growing steel prices and stabilization of costs for raw materials for steelmaking.

"At the same time we worked on optimizing of our steel division's product range and improving operational results of our mining division. The steel division continued to increase production and sales of high value-added products — structural shapes from Chelyabinsk Metallurgical Plant's Universal rolling mill, products from special steels, and new types of products, including those oriented toward international markets.

"Using opportunities offered by favorable market conditions, we actively invested in large-scale repairs, modernization of our equipment and mining fleet. Capital investment in 9M2017 totaled 7.6 billion rubles (including leasing) that is 62% more year-on-year. These investments will enable us to reach our planned goals on production volumes and profit margin."

Consolidated Results For The 9M 2017
Mln rubles 9M' 17 9M' 16 % 3Q' 17 2Q' 17 %
Revenuefrom external customers 222,797   196,350   13 % 73,413   71,970   2 %
Operating profit 46,415   28,761   61 % 15,738   12,588   25 %
EBITDA 59,140   41,571   42 % 18,913   17,421   9 %
EBITDA, margin 27 % 21 %   26 % 2 4 %  
Net profit (loss)attributable to equity shareholders of Mechel PAO 11,114   5,543   101 % 6,120   (8,908 )  
                       

*  EBITDA - Adjusted EBITDA. Please find the calculation of the Adjusted EBITDA and other non-IFRS measures used here and hereafter in Attachment A.

Mining Segment

Mechel Mining Management OOO's Chief Executive Officer Pavel Shtark noted:

"The situation in the coal markets in 3Q2017 was more stable than in the first half of this year. Spot prices for hard coking coal in the global market grew, topping 200 US dollars per tonne by late August and staying at this level nearly until the end of the quarter. High demand from China, which was formed in the wake of high prices for finished products, as well as strikes, force majeure and production problems on some Australian mines, fueled these rates. Average spot prices for premium coking coal in 3Q2017 amounted to 189 dollars per tonne, practically unchanged since the high average price level of 2Q2017, caused by floods in Australia. In the beginning of 4Q2017, spot prices wavered around 180-190 dollars per tonne. A small shortage of premium coals as well as Asian customers' desire to quickly secure coal contracts as shipments from Queensland ports continue to be delayed support these prices.

"Nevertheless, several factors such as shortage of rail cars and Port Posiet coal delivery limitations due to floods in the Far East led to a decrease in coal sales and accordingly a decrease in revenue quarter-on-quarter.

"By implementing measures aimed at restoring our mining volumes and coal sales, we paid great attention to preparing reserves for future mining, as well as repairs and modernization of equipment for open pits, mines and washing plants. These measures led to an increase in production costs, which brought down EBITDA quarter-on-quarter. At the same time, we expect that launching new machinery that already has partly arrived at the facilities, while the rest is due to arrive until the end of this year and in early 2018, together with additional volumes of stripping works completed, will enable us to demonstrate a stable coal production volumes recovery."
Mln rubles 9M' 17 9M' 16 % 3Q' 17 2Q' 17 %
Revenue from external customers 74,685   59,990   24 % 23,166   23,531   -2 %
Revenueinter-segment 32,974   22,481   47 % 9,706   10,803   -10 %
EBITDA 47,327   23,979   97 % 12,764   14,607   -13 %
EBITDA, margin 44 % 29 %   39 % 43 %  
                     

Steel Segment

Mechel-Steel Management Company OOO's Chief Executive Officer Andrey Ponomarev noted:

"The division's results in 3Q2017 were better than in 2Q2017, as expected. The primary cause was the improvement of prices and a decrease in costs for incoming raw materials. This more than doubled our EBITDA quarter-on-quarter even as revenue remained practically at the same level. The decrease in EBITDA over 9M2017 by a quarter year-on-year was also due to cost dynamics — prices for metallurgical raw materials in this accounting period were markedly higher than last year.

"In 3Q2017 we continued to focus on increasing the high value-added products' share in the division's production and sales structure, as well as worked on further expanding the range of our high-margin products and their markets. The division's facilities in this accounting period continued to master new types of products. Chelyabinsk Metallurgical Plant expanded its product range for the European market — certificates of compliance were awarded to two new types of H-beams and two new rail profiles produced at the Universal rolling mill. The welded beam workshop was also launched, which will enable the plant to expand its construction product range. In October and November, we shipped our rails to Belarus and Kazakhstan. Apart from that, Chelyabinsk Metallurgical Plant passed compliance audit for production of reinforcement steel for the European market.

"In 3Q2017 we conducted a series of large-scale repairs. At Chelyabinsk Metallurgical Plant, one of its major facilities, blast furnace #1, has undergone planned general overhaul. At Izhstal, a general overhaul was made at the smelting complex producing continuously cast billets from specialty steels."
Mln rubles 9M' 17 9M' 16 % 3Q' 17 2Q' 17 %
Revenue from external customers 129,377   118,900   9 % 44,422   42,926   3 %
Revenueinter-segment 5,413   5,296   2 % 1,673   1,776   -6 %
EBITDA 12,175   15,845   -23 % 6,101   2,518   142 %
EBITDA, margin 9 % 13 %   13 % 6 %  
                     

Power Segment

Mechel-Energo OOO's Chief Executive Officer Petr Pashnin noted:

"The increase in the division's revenue year-on-year was due to an increase in sales, including that of electricity generated by Southern Kuzbass Power Plant due to major repairs having been conducted in 2016, and an increase in electricity supply prices. At the same time, negative dynamics of profit and profit margin results was due to costs growth outstripping the growth of electricity tariffs, as well as an increase in costs of power transmission."

Mln rubles 9M' 17 9M' 16 % 3Q' 17 2Q' 17 %
Revenue from external customers 18,735   17,460   7 % 5,825   5,514   6 %
Revenueinter-segment 11,911   11,423   4 % 3,438   3,835   -10 %
EBITDA 989   2 102   -53 % 23   261   -91 %
EBITDA, margin 3 % 7 %   0 % 3 %  
                     

The management of Mechel will host a conference call today at 18:00 p.m. Moscow time (3:00 p.m. London time, 10 a.m. New York time) to review Mechel's financial results and comment on current operations. The call may be accessed via the Internet at http://www.mechel.com, under the Investor Relations section.

Alexey LukashovDirector of Investor RelationsMechel PAOPhone: 7-495-221-88-88Fax: 7-495-221-88-00alexey.lukashov@mechel.com

Mechel is an international mining and steel company. Its products are marketed in Europe, Asia, North and South America, Africa. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its enterprises work in a single production chain, from raw materials to high value-added products.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.

Attachments to the 9M 2017 Financial results Press Release

Attachment A

Non-IFRS financial measures. This press release includes financial information prepared in accordance with International Financial Reporting Standards, or IFRS, as well as other financial measures referred to as non-IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for the information prepared in accordance with IFRS.

Adjusted EBITDA (EBITDA) represents net profit (loss) attributable to equity shareholders of Mechel PAO before Depreciation and depletion, Foreign exchange (gain) loss, net, Finance costs including fines and penalties on overdue loans and borrowings and finance lease payments, Finance income, Net result on the disposal of non-current assets, Impairment of goodwill and other non-current assets, Write-off of accounts receivable, Provision (reversal of provision) for doubtful accounts,  Write-off of inventories to net realisable value, Loss (profit) after tax from discontinued operations, net, Net result on the disposal of subsidiaries, Profit (loss) attributable to non-controlling interests, Income tax expense (benefit), Pension service cost and actuarial loss, other related expenses, Other fines and penalties, Gain on write-off of accounts payable with expired legal term and Other one-off items. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of our Revenue. Our adjusted EBITDA may not be similar to EBITDA measures of other companies. Adjusted EBITDA is not a measurement under IFRS and should be considered in addition to, but not as a substitute for, the information contained in our interim condensed consolidated statement of profit (loss). We believe that our adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While interest expenses, depreciation and depletion and impairment of goodwill and other non-current assets are considered operating expenses under IFRS, these expenses primarily represent the non-cash current period allocation of costs associated with non-current assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.

Adjusted net profit (loss) represents net profit (loss) attributable to equity shareholders of Mechel PAO before Impairment of goodwill and other non-current assets, Loss (profit) after tax from discontinued operations, net, Net result on the disposal of subsidiaries, Effect on loss attributable to non-controlling interests, Foreign exchange (gain) loss, net, Pension service cost and actuarial loss, other related expenses, Other fines and penalties, Gain on write-off of accounts payable with expired legal term and Other one-off items. Our adjusted net profit (loss) may not be similar to adjusted net profit (loss) measures of other companies. Adjusted net profit (loss) is not a measurement under IFRS and should be considered in addition to, but not as a substitute for, the information contained in our interim condensed consolidated statement of profit (loss). We believe that our adjusted net profit (loss) provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations. While impairment of goodwill and other non-current assets is considered operating expenses under IFRS, these expenses represent the non-cash current period allocation of costs associated with assets acquired or constructed in prior periods. Our adjusted net profit (loss) calculation is used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.

Our calculations of Net debt, excluding fines and penalties on overdue amounts** and trade working capital are presented below:
         
Mln rubles 30.09.2017   31.12.2016  
Interest-bearing loans and borrowings, excluding interest payable, fines and penalties on overdue amounts 381,994   395,571  
Interest payable 18,949   16,916  
Non-current interest-bearing loans and borrowings 16,961   11,644  
Other non-current financial liabilities 39,280   36,197  
Other current financial liabilities 620   -  
less Cash and cash equivalents (2,239 ) (1,689 )
Net debt, excluding finance lease liabilities, fines and penalties on overdue amounts 455,565   458,639  
     
Finance lease liabilities, current portion 7,756   10,175  
Finance lease liabilities, non-current portion 512   421  
Net debt, excluding fines and penalties on overdue amounts 463,833   469,235  
     
     
Mln rubles 30.09.2017   31.12.2016  
Trade and other receivables 19,385   19,054  
Inventories 36,547   35,227  
Other current assets 8,202   6,942  
Income tax receivables 510   686  
Trade current assets 64,644   61,909  
     
Trade and other payables 34,756   40,985  
Advances received 3,473   3,815  
Provisions and other current liabilities 2,792   3,515  
Tax and similar charges payable other than income tax 8,578   9,195  
Income tax payable 4,177   2,552  
Trade current liabilities 53,776   60,062  
     
Trade working capital 10,868   1,847  
         

**  Calculations of Net debt could be differ from indicators calculated in accordance with loan agreements upon dependence on definitions in such agreements.

EBITDA can be reconciled to our interim condensed consolidated statement of profit (loss) as follows:

               
  Consolidated Results   Mining Segment ***   Steel Segment ***   Power Segment ***
Mln rubles 9m 2017 9m 2016   9m 2017 9m 2016   9m 2017 9m 2016   9m 2017 9m 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO 11,114   5,543     16,873   (2,439 )   (3,825 ) 8,051     (582 ) 284  
Add:                      
Depreciation and depletion 11,041   10,022     6,262   5,813     4,446   3,947     333   262  
Foreign exchange (gain) loss, net (3,601 ) (19,738 )   (3,664 ) (11,719 )   64   (7,950 )   (1 ) (69 )
Finance costs including fines and penalties on overdue loans and borrowings and finance leases payments 36,273   43,247     26,452   32,134     10,683   13,212     664   794  
Finance income (493 ) (3,963 )   (1,403 ) (3,959 )   (572 ) (2,856 )   (44 ) (41 )
Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, write-off of accounts receivables, provision (reversal of provision) for doubtful accounts and write-off of inventories to net realisable value 799   1,818     508   830     (15 ) 389     307   599  
Loss (profit) after tax from discontinued operations, net -   343     -   (84 )   -   407     -   20  
Net result on the disposal of subsidiaries (474 ) (191 )   (474 ) -     -   (191 )   -   -  
Profit (loss) attributable to non-controlling interests 848   1,153     386   298     381   735     80   122  
Income tax expense (benefit) 2,806   2,427     1,889   2,698     831   (364 )   85   93  
Pension service cost and actuarial loss, other related expenses 96   124     76   91     17   31     3   2  
Other fines and penalties 892   847     476   319     269   492     147   36  
Gain on write-off of accounts payable with expired legal term (161 ) (61 )   (54 ) (3 )   (104 ) (58 )   (3 ) -  
Other one-off items -   -     -   -     -   -     -   -  
EBITDA 59,140   41,571     47,327   23,979     12,175   15,845     989   2,102  
EBITDA, margin 27 % 21 %   44 % 29 %   9 % 13 %   3 % 7 %
                       
Mln rubles 9m 2017 9m 2016   9m 2017 9m 2016   9m 2017 9m 2016   9m 2017 9m 2016
Net profit (loss) attributable to equity shareholders of Mechel PAO 11,114   5,543     16,873   (2,439 )   (3,825 ) 8,051     (582 ) 284  
Add:                      
Impairment of goodwill and other non-current assets -   374     -   374     -   -     -   -  
Loss (profit) after tax from discontinued operations, net -   343     -   (84 )   -   407     -   20  
Net result on the disposal of subsidiaries (474 ) (191 )   (474 ) -     -   (191 )   -   -  
Effect on loss attributable to non-controlling interests -   (61 )   -   -     -   (61 )   -   -  
Foreign exchange (gain) loss, net (3,601 ) (19,738 )   (3,664 ) (11,719 )   64   (7,950 )   (1 ) (69 )
Pension service cost and actuarial loss, other related expenses 96   124     76   91     17   31     3   2  
Other fines and penalties 892   847     476   319     269   492     147   36  
Gain on write-off of accounts payable with expired legal term (161 ) (61 )   (54 ) (3 )   (104 ) (58 )   (3 ) -  
Other one-off items -   -     -   -     -   -     -   -  
Adjusted net profit (loss), net of income tax 7,866   (12,820 )   13,233   (13,461 )   (3,579 ) 721     (436 ) 273  
                       
Operating profit 46,415   28,761     40,075   16,913     7,491   10,996     201   1,207  
Add:                      
Impairment of goodwill and other non-current assets -   374     -   374     -   -     -   -  
Write-off of property, plant and equipment 152   303     101   293     20   10     31   -  
Pension service cost and actuarial loss, other related expenses 96   124     76   91     17   31     3   2  
Other fines and penalties 892   847     476   319     269   492     147   36  
Other one-off items -   -     -   -     -   -     -   -  
Adjusted operating profit 47,555   30,409     40, 728   17,990     7, 797   11,529     382   1,245  
*** including inter-segment operations                      
                       
  Consolidated Results   Mining Segment ***   Steel Segment ***   Power Segment ***
Mln rubles 3q 2017 2q 2017   3q 2017 2q 2017   3q 2017 2q 2017   3q 2017 2q 2017
Net profit (loss) attributable to equity shareholders of Mechel PAO 6,120   (8,908 )   6,175   (2,163 )   487   (6,530 )   (569 ) (250 )
Add:                      
Depreciation and depletion 3,813   3,811     2,185   2,149     1,528   1,540     101   122  
Foreign exchange (gain) loss, net (1,797 ) 7,876     (2,168 ) 4,106     372   3,756     (1 ) 14  
Finance costs including fines and penalties on overdue loans and borrowings and finance leases payments 12,177   11,704     8,728   8,664     3,709   3,348     216   217  
Finance income (51 ) (315 )   (361 ) (554 )   (150 ) (267 )   (12 ) (19 )
Net result on the disposal of non-current assets, impairment of goodwill and other non-current assets, write-off of accounts receivables, provision (reversal of provision) for doubtful accounts and write-off of inventories to net realisable value (454 ) 675     11   322     (523 ) 210     58   143  
Net result on the disposal of subsidiaries (478 ) 4     (478 ) 4     -   -     -   -  
Profit (loss) attributable to non-controlling interests 160   132     (207 ) 202     269   (51 )   96   (19 )
Income tax (benefit) expense (821 ) 2,088     (1,234 ) 1,689     357   406     55   (7 )
Pension service cost and actuarial loss, other related expenses 32   32     25   25     6   6     1   1  
Other fines and penalties 293   373     104   199     110   113     79   61  
Gain on write-off of accounts payable with expired legal term (81 ) (51 )   (17 ) (37 )   (64 ) (13 )   (1 ) (1 )
Other one-off items -   -     -   -     -   -     -   -  
EBITDA 18,913   17,421     12,764   14,607     6,101   2,518     23   261  
EBITDA, margin 26 % 24 %   39 % 43 %   13 % 6 %   0 % 3 %
                       
Mln rubles 3q 2017 2q 2017   3q 2017 2q 2017   3q 2017 2q 2017   3q 2017 2q 2017
Net profit (loss) attributable to equity shareholders of Mechel PAO 6,120   (8,908 )   6,175   (2,163 )   487   (6,530 )   (569 ) (250 )
Add:                      
Impairment of goodwill and other non-current assets -   -     -   -     -   -     -   -  
Net result on the disposal of subsidiaries (478 ) 4     (478 ) 4     -   -     -   -  
Effect on loss attributable to non-controlling interests -   -     -   -     -   -     -   -  
Foreign exchange (gain) loss, net (1,797 ) 7,876     (2,168 ) 4,106     372   3,756     (1 ) 14  
Pension service cost and actuarial loss, other related expenses 32   32     25   25     6   6     1   1  
Other fines and penalties 293   373     104   199     110   113     79   61  
Gain on write-off of accounts payable with expired legal term (81 ) (51 )   (17 ) (37 )   (64 ) (13 )   (1 ) (1 )
Other one-off items -   -     -   -     -   -     -   -  
Adjusted net profit (loss), net of income tax 4,089   (674 )   3,641   2,134     911   (2,668 )   (491 ) (175 )
                       
Operating profit (loss) 15,738   12,588     10,874   11,945     5,041   683     (203 ) (73 )
Add:                      
Impairment of goodwill and other non-current assets -   -     -   -     -   -     -   -  
Write-off of property, plant and equipment 4   77     4   27     -   49     -   1  
Pension service cost and actuarial loss, other related expenses 32   32     25   25     6   6     1   1  
Other fines and penalties 293   373     104   199     110   113     79   61  
Other one-off items -   -     -   -     -   -     -   -  
Adjusted operating profit (loss) 16,067   13,070     11, 007   12,196     5, 157   851     (123 ) (10 )
*** including inter-segment operations                      
                       

Attachment B
   
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT (LOSS) AND OTHER COMPREHENSIVE INCOME (LOSS)  
(All amounts are in millions of Russian rubles) 9 months ended September 30,  
  2017 *   2016 *  
  (unaudited)   (unaudited)  
Continuing operations        
Revenue 222,797     196,350    
Cost of sales (121,009 )   (108,274 )  
Gross profit 101,788     88,076    
         
Selling and distribution expenses (40,858 )   (41,237 )  
Write-off of property, plant and equipment (152 )   (303 )  
Impairment of goodwill and other non-current assets -     (374 )  
Provision for doubtful accounts (316 )   (740 )  
Taxes other than income tax (3,671 )   (4,197 )  
Administrative and other operating expenses (11,190 )   (12,975 )  
Other operating income 814     511    
Total selling, distribution and operating income and (expenses), net (55,373 )   (59,315 )  
Operating profit 46,415     28,761    
         
Finance income 493     3,963    
Finance costs, including fines and penalties on overdue loans and borrowings and finance lease payments of RUB 785 million, RUB 5,254 million for the 9 months ended September 30, 2017 and 2016, respectively (36,273 )   (43,247 )  
Foreign exchange gain (loss), net 3,601     19,738    
Share of profit of associates, net of provision 14     22    
Other income 648     379    
Other expenses (130 )   (150 )  
Total other income and (expense), net (31,647 )   (19,295 )  
Profit before tax from continuing operations 14,768     9,466    
         
Income tax expense (2,806 )   (2,427 )  
Profit for the period from continuing operations 11,962     7,039    
         
Discontinued operations        
Loss after tax for the period from discontinued operations, net -     (343 )  
Profit for the period 11,962     6,696    
         
Attributable to:        
Equity shareholders of Mechel PAO 11,114     5,543    
Non-controlling interests 848     1,153    
         
Other comprehensive income        
Other comprehensive income to be reclassified to profit or loss in subsequent periods, net of tax:  179     1,244    
Exchange differences on translation of foreign operations 179     1,244    
Other comprehensive income for the period, net of tax 179     1,244    
Total comprehensive income for the period, net of tax 12,141     7,940    
         
Attributable to:        
Equity shareholders of Mechel PAO 11,293     6,787    
Non-controlling interests 848     1,153    
     
     
     
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION    
(All amounts are in millions of Russian rubles)        
    September 30, 2017 *   December 31, 2016
    (unaudited)    
Assets        
Current assets        
Cash and cash equivalents   2,239     1,689  
Trade and other receivables   19,385     19,054  
Inventories   36,547     35,227  
Income tax receivables   510     686  
Other current financial assets   37     167  
Other current assets   8,202     6,942  
Total current assets   66,920     63,765  
         
Non-current assets        
Property, plant and equipment   200,697     204,353  
Mineral licenses   34,788     36,099  
Non-current financial assets   227     235  
Investments in associates   277     265  
Deferred tax assets   250     1,502  
Goodwill   18,336     18,355  
Other non-current assets   788     891  
Total non-current assets   255,363     261,700  
Total assets   322,283     325,465  
         
Equity and liabilities        
Current liabilities        
Interest-bearing loans and borrowings, including interest payable, fines and penalties on overdue amounts of RUB 40,410 million and RUB 38,594 million as of September 30, 2017 and December 31, 2016, respectively   422,404     434,165  
Trade and other payables   34,756     40,985  
Advances received   3,473     3,815  
Provisions   2,711     3,496  
Pension obligations   990     944  
Finance lease liabilities   7,756     10,175  
Income tax payable   4,177     2,552  
Taxes and similar charges payable other than income tax   8,578     9,195  
Other current financial liabilities   620     -  
Other current liabilities   81     19  
Total current liabilities   485,546     505,346  
         
Non-current liabilities        
Interest-bearing loans and borrowings   16,961     11,644  
Provisions   3,962     3,420  
Pension obligations   3,625     3,501  
Finance lease liabilities   512     421  
Deferred tax liabilities   13,465     16,282  
Other non-current liabilities   143     159  
Other non-current financial liabilities   39,731     36,740  
Income tax payable   -     540  
Total non-current liabilities   78,399     72,707  
Total liabilities   563,945     578,053  
           
Equity        
Common shares   4,163     4,163  
Preferred shares   833     833  
Additional paid-in capital   27,960     28,326  
Accumulated other comprehensive income   1,030     848  
Accumulated deficit   (284,186 )   (294,444 )
Equity attributable to equity shareholders of Mechel PAO   (250,200 )   (260,274 )
Non-controlling interests   8,538     7,686  
Total equity   (241,662 )   (252,588 )
Total equity and liabilities   322,283     325,465  
             

 
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts are in millions of Russian rubles)   9 months ended September 30,
    2017 *   2016 *
    (unaudited)   (unaudited)
Cash flows from operating activities        
Profit for the period   11,962     6,696  
Less loss after tax for the period from discontinued operations, net   -     (343 )
Profit for the period from continuing operations   11,962     7,039  
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:        
Depreciation   9,743     8,607  
Depletion and amortization   1,298     1,415  
Foreign exchange (gain) loss, net   (3,601 )   (19,738 )
Deferred tax (income) expense   (1,562 )   2,632  
Provision for doubtful accounts   316     740  
Write-off of accounts receivable   48     80  
Write-off of inventories to net realisable value   292     292  
Revision in estimated cash flows from rehabilitation provision   (59 )   (44 )
Write-off of property, plant and equipment   152     303  
Impairment of goodwill and other non-current assets   -     374  
(Gain) loss on disposal of non-current assets   (9 )   29  
Loss (gain) on sale of investments   4     (130 )
Gain on write-off of accounts payable with expired legal term   (161 )   (61 )
Pension service cost and actuarial loss, other related expenses   96     124  
Finance income   (493 )   (3,963 )
Finance costs, including fines and penalties on overdue loans and borrowings and finance lease payments   36,273     43,247  
Gain on royalty and other proceeds associated with disposal of Bluestone   (481 )   (84 )
Other   213     243  
Changes in working capital items:        
Trade and other receivables   (708 )   (3,633 )
Inventories   (2,448 )   (430 )
Trade and other payables   (3,680 )   (3,419 )
Advances received   (318 )   (51 )
Taxes payable and other liabilities   3,156     644  
Other current assets   (1,369 )   349  
Income tax paid   (3,202 )   (1,364 )
Net operating cash flows from discontinued operations   -     (436 )
Net cash provided by operating activities   45,462     32,765  
         
Cash flows from investing activities        
Loans issued and other investments   (5 )   (11 )
Interest received   129     25  
Proceeds from disposal of subsidiaries   82     145  
Royalty and other proceeds associated with disposal of Bluestone   481     84  
Purchases of available for sale securities   -     (4 )
Proceeds from loans issued and other investments   144     31  
Proceeds from disposals of property, plant and equipment   275     156  
Purchases of property, plant and equipment   (4,250 )   (2,398 )
Interest paid, capitalized   (411 )   (459 )
Net cash used in investing activities   (3,555 )   (2,431 )
         
Cash flows from financing activities        
Proceeds from loans and borrowings   16,809     4,133  
Repayment of loans and borrowings   (28,366 )   (37,922 )
Dividends paid to shareholders of Mechel PAO   (856 )   (5 )
Dividends paid to non-controlling interests   (118 )   (2 )
Interest paid, including fines and penalties   (24,640 )   (25,756 )
Proceeds from sales of 49% stakes in Elga coal complex, with put-option granted   -     34,300  
Repayment of obligations under finance lease   (2,712 )   (1,868 )
Deferred payments for acquisition of assets   (272 )   -  
Deferred consideration paid for the acquisition of subsidiaries in prior periods   (2,430 )   (3,636 )
Net cash used in financing activities   (42,585 )   (30,756 )
         
Effect of exchange rate changes on cash and cash equivalents   (415 )   (122 )
         
Net decrease in cash and cash equivalents   (1,093 )   (544 )
         
Cash and cash equivalents at beginning of period   1,689     3,079  
Cash and cash equivalents net of overdrafts at beginning of period   1,453     891  
Cash and cash equivalents at end of period   2,239     2,350  
Cash and cash equivalents net of overdrafts at end of period   360     347  
             

*These interim condensed consolidated financial statements were prepared by Mechel PAO in accordance with IFRS and have not been audited by the independent auditor. If these interim condensed consolidated financial statements are audited in the future, the audit could reveal differences in our consolidated financial results and we cannot assure that any such differences would not be material. There were certain reclassifications to conform with the current period presentation.