Shares of Mechel OAO (MTL) are currently trading around 5 percent lower in Russia, after the mining and steel group said it slipped to a hefty loss in its fourth quarter from last year's profit, hurt by sharply higher impairment charges as well as lower mining and steel revenues.
Mechel OAO's Chief Executive Officer Evgeny Mikhel said, "Last year the Group operated as key markets for mining products continued to weaken against a background of general world economic volatility. This is reflected in the worsening of the financial results of our main activities, as well as the need to book reserves and make several significant write-offs. At the same time, with respect to most of our key operational indicators Mechel demonstrated positive dynamics in 2012."
In its recently concluded fourth quarter, the company's net loss attributable to shareholders was $1.11 billion, compared to last year's profit of $54.91 million. The latest quarter results were hurt by impairment of long-lived assets and goodwill and provision for amounts due from related parties of $909.87 million, significantly higher than last year's charges of $77.22 million.
Adjusted net loss, which excluded items, was $160.86 million, compared to profit of $134.13 million a year ago. Adjusted EBITDA in the quarter plunged 73.3 percent to $100.39 million, and adjusted EBITDA margin fell to 4 percent from last year's 13.9 percent.
Revenue from external customers dropped 7 percent to $2.52 billion from last year's 2.71 billion.
Segment-wise, mining revenues fell 13.4 percent to $676 million, and steel revenues dropped 8.4 percent to $1.56 billion. Revenues from Ferroalloys were down 24.6 percent, while power revenues surged 57 percent.
In its fiscal year 2012, attributable net loss was $1.74 billion, compared to profit of $649.6 million last year. Adjusted net income totaled $23.04 million, sharply lower than $736.26 million a year ago. Revenue fell 10.1 percent to $11.27 billion. The consolidated adjusted EBITDA decreased 44.4 percent to $1.3 billion.
In line with its renewed strategy, aimed at deleveraging, Mechel said it has already sold a large number of assets that had the most negative impact on its financial results. The company continues talks on selling the remainder of non-strategic assets.
In addition, the firm said it improved debt structure and continue working on it by decreasing the share of short-term debt.
Mikhel added, "We are sure that the steps we are undertaking with a focus on maximizing shareholder value, will have their positive effect very shortly."
In Russia, Mechel shares are currently trading at 124.60 Russian ruble, down 6.20 ruble or 4.74 percent.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.