KTK expects financial results to decline in 2012
KEMEROVO. Aug 24 (Interfax) - OJSC Kuzbass Fuel Company's (KTK) management expects to see a decline in the company's revenue, earnings before taxes, depreciation and amortization (EBITDA), and net profit this year due to the price situation on export markets, KTK said in a press release.
According to the company's financial statement, the management is also reserved about KTK's prospects in Q3 and H2 2012.
In Q3 of this year, KTK plans to produce 2.18 million tonnes of coal, which is on par with January-March levels but 15% higher than in Q2. "According to the estimates of management, the stripping ratio for Q2 reached its peak and will decline in the second half of the year," the statement said.
"As for investment in 2012 - it will be implemented in full. The main direction of investments is the construction of a second washing plant, which will be put into operation in Q4 2012. The factory Kaskad-2 - a strategically important facility for the Company in terms of improving the quality of its product - is one of the anti-crisis measures, which will produce more than marginal product, reduce costs, and thus provide the desired level of profit. Therefore, the ratio of net debt to EBITDA we plan to retain at no more than 2," KTK's General Director Igor Prokudin is quoted as saying in the report.
As reported, KTK has revised its 2012 production forecast downwards by 600,000 tonnes to 8.7 million tonnes due to a drop in demand and falling coal prices on the global market. In addition, the company has announced its intentions to boost coal sales on the Russian market by 20% and expand its network of sales points in West Siberia.
KTK also intends to invest 3.9 billion rubles in the development of its production facilities this year, as opposed to 2.09 billion rubles invested in 2011. It will earmark 2.4 billion of those rubles for new construction.
Last year, KTK raised its net profit to International Financial Reporting Standards (IFRS) by 150% to 2.018 billion rubles. EBITDA soared by over 80% to 3.911 billion rubles, and revenue jumped 70% to 23.939 billion rubles.
KTK includes coal-producing enterprises (the Vinogradovsky, Karakansky-South and Cheremshansky open-pit mines), a distribution network (OJSC Kuzbasstoplivosbyt, LLC Transugol, OJSC Altay Fuel Company, LLC Novosibirsk Fuel Corporation) and infrastructure enterprises (OJSC Kaskad-Energo, Anzhero-Sudzhenskaya Combined Heat and Power Plant, LLC TEKM).