Chelyabinsk Zinc Plant RAS net profits drop 60% in H1
YEKATERINBURG. July 31 (Interfax) - OJSC Chelyabinsk Zinc Plant (CZP) made 336.168 million rubles in net profits to Russian Accounting Standards (RAS) in the first half of this year, a 60% drop from the same half a year earlier, the company reported.
Company sales revenues contracted 3.7% to 5.089 billion rubles.
CZP's investor relations manager, Yevgeny Ponomarev, told Interfax that the drop in sales revenues and profits for the six months was driven by sliding zinc quotations on the London Metal Exchange, along with the use in production of non-Russian zinc concentrate that costs more than Russian concentrate.
"We had in the first quarter to buy more expensive foreign concentrate. Production costs increased as zinc prices fell, and profits contracted," Ponomarev said.
CZP first-half financial highlights (1,000 rubles):
| H1 2012 | H1 2011 | |
| Sales revenues | 5 089 479 | 5 287 140 |
| Cost of sales | 4 066 723 | 3 846 669 |
| Gross profits | 1 022 756 | 1 440 471 |
| Sales profits | 413 517 | 887 386 |
| Pretax profits | 427 008 | 1 053 310 |
| Net profits | 336 168 | 834 071 |
CZP's accounts receivable grew to 2.003 billion rubles over the half from 1.425 billion rubles at the start of the year, accounts payable to 1.060 billion rubles from 910.961 million rubles.
During H1 2012, CZP cut production of commercial Special High Grade zinc and alloys made from it by 1% to 81,247 tonnes.
CZP produces 64% of Russia's zinc. The company produced around 160 tonnes of commercial zinc in 2011, up 4.3% from 2010.
Urals Mining and Metals Company (UMMC) teamed up with Russian Copper Company to take CZP over in the fall of 2009. They acquired 100% of NF Holdings B.V., which owned 58% of CZP. CZP has said UMMC owns 47% of NF Holdings and that RCC owns 37%.