Chelyabinsk Zinc Plant IFRS net profits plunge 73% to 74 mln rubles in Q1
MOSCOW. June 7 (Interfax) - OJSC Chelyabinsk Zinc Plant (CZP) had net profits to International Financial Reporting Standards (IFRS) of 74 million rubles in the first quarter, 73% down from 271 million rubles I the same period of last year, a company statement says.
Company sales revenues for the period were down 2% at 3.178 billion rubles and earnings before interest, taxes, depreciation, and amortization (EBITDA) 46% at 289 million rubles.
CZP financial highlights for Q1 2013, mln rubles:
| Q1 2013 | Q1 2012 | Change | |
| Revenue | 3 178 | 3 256 | (2%) |
| Gross profit | 444 | 627 | (29%) |
| Gross profit margin | 14% | 19% | |
| EBITDA | 289 | 531 | (46%) |
| EBITDA margin | 9% | 16% | |
| Profit before tax | 83 | 347 | (76%) |
| Net profit | 74 | 271 | (73%) |
| Net profit margin | 2% | 8% |
CZP said the average Q1 zinc price on the London Metal Exchange was flat year-on-year at $2,033 per tonne. Average lead quotations on the LME were up 10% at $2,301/tonne.
The company's revenues from zinc and zinc alloy sales increased 15% year-on-year to 1.895 billion rubles in Q1, driven by 12% more sales on the home market - 27,100 tonnes in all.
Revenues from the sale of zinc alloys produced by The Brock Metal Company, Ltd. (a British CZP subsidiary that makes alloys for pressure molding) amounted to 443 million rubles, 22% down year-on-year. The company attributes this to lower alloy sales - 6,000 tonnes this Q1 versus 7,700 tonnes for Q1 2012.
CZP generated revenues of 231 million on a tolling contract, 44% down at 8,500 tonnes. This was due to increased zinc and zinc alloy sales on the Russian market, as well as a seasonal irregularity in tolling zinc shipments.
CZP revenue structure in Q1 2013, mln rubles:
| Q1 2013 | Q1 2012 | % change | |
| Zinc and zinc alloys | 2 338 | 2 212 | 6% |
| - CZP | 1 895 | 1 645 | 15% |
| - Brock Metal | 443 | 567 | (22%) |
| Tolling zinc | 231 | 411 | (44%) |
| Lead concentrate | 84 | 216 | (61%) |
| - CZP | 25 | 42 | (41%) |
| - Nova Zinc | 59 | 174 | (66%) |
| Byproducts | 525 | 417 | 26% |
| Total | 3 178 | 3 256 | (2%) |
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 increase by 14% was due to the higher use of purchased zinc concentrate instead of tolling, changes to the raw materials structure (higher use of import zinc concentrate), and also to the increase of auxiliary materials prices.
CZP is Russia's biggest zinc producer. Output of the metal grew 4.3% last year to 160,000 tonnes.
A consortium including Urals Mining and Metals Company (UMMC) and Russian Copper Company owns 58% of CZP.
