Norilsk Nickel sees nickel sales drop 33% in Q1, palladium sales fall 24.5%
MOSCOW. May 17 (Interfax) - MMC Norilsk Nickel , the world's largest producer of nickel and palladium, reduced sales of its core metal by 33% year-on-year to 21.43 billion rubles in the first quarter of 2012, the company said in a quarterly statement to Russian Accounting Standards (reflects results at the Norilsk Nickel group's core Polar Branch).
Norilsk Nickel's total RAS revenue slumped 20% to 65.245 billion rubles in the quarter.
The share of nickel in total revenue shrank to 32.8% from 39.1% a year earlier; the figure was 37.2% for all of 2011, down from 42% in 2010.
However, Norilsk Nickel did not reduce nickel production in the quarter. On the contrary, the group increased production of the metal by 7% to 75,824 tonnes (the company sells all of its product), Norilsk Nickel reported earlier.
The company attributes the slump in sales to a drop in prices.
Sales of copper (and copper wire rods) slumped 7.6% to 17.452 billion rubles in the quarter, but rose to 26.7% of revenue, from 23.1% a year earlier and 26% in 2011 overall.
The group reduced copper production by 6% to 88,456 tonnes in the first quarter.
Sales of palladium and palladium compounds fell 24.5% to 12.158 billion rubles in the quarter, and accounted for 18.6% of revenue, compared to 19.7% a year earlier and 17.5% in 2011 overall.
The group reduced palladium production by 5% to 649,000 ounces in the first quarter.
Sales of platinum and platinum compounds dropped 12.8% to 7.683 billion rubles in the quarter, and rose to 11.8% of total revenue, from 10.8% a year earlier and 10.3% in 2011 overall.
The group produced 166,000 ounces of platinum in the first quarter, 2% less year-on-year.
The company also attributes the drop in sales of platinum group metals to the market situation.
The decline in the share of nickel in total revenue is part of Norilsk Nickel's long-term strategy, which calls for diversification. The company intends to accomplish this by increasing the share of copper and PGMs. By 2025, nickel will generate 31% of revenue, copper 18%, and platinum and palladium 36%, and new products (molybdenum and iron concentrates) 3%, the company forecasts in its strategy.
