JSC Chelyabinsk Zinc Plant Announces Its Results
OREANDA-NEWS. December 20, 2007. Chelyabinsk Zinc Plant (LSE: CHZN, RTS: CHZN), Russia’s largest producer of zinc and zinc today announced its results for the nine months ended September 30, 2007.
In January-September 2007 Chelyabinsk Zinc Plant (CZP) produced 122,676 tonnes of zinc, 11% more than for the same period of 2006 (110,178 tonnes). CZP sales for the nine months of 2007 totaled 109,494 tonnes, an increase of 10% compared with the corresponding period last year (99,953 tonnes). CZP’s domestic sales accounted for 48% of the total sales or 52,451 tonnes, export sales totaled 57,043 tonnes or 52% of CZP’s total sales for the nine months ended September 30, 2007 (9M 2006: domestic sales – 60,325 tonnes, export sales – 39,628 tonnes of zinc and zinc based alloys). Since the beginning of the year all zinc concentrate produced by CZP’s subsidiary, Nova Zinc, operator of Akzhal mine in Kazakhstan, has been supplied to the Chelyabinsk Zinc Plant. For the nine months of 2007 Akzhal’s supply to CZP totaled 23.6 thousand tonnes of zinc in zinc concentrate, production of lead in lead concentrate by Akzhal mine totaled 3,9 thousands tonnes for the same period of 2007.
CZP's revenues increased by 18% to $450 million in the nine months of 2007 as compared to the same period of 2006 (9M 2006: $382 million). The main reasons for this increase were increase in LME zinc prices (LME zinc average price: 9M 2006 - $2,965.5 per tonne, 9M 2007 - $3,451.7 per tonne) and growth in volume of zinc sales. Revenue for the nine months of 2007 also includes $12.3 million (or 3% of the total revenues) generated from sales of lead concentrate by Nova Zinc (9M 2006 - $5.1 million) and $23.1 million (or 5% of the total revenues) received from the sales of by-products which include primarily sulphuric acid, cadmium and indium ($16.8 million in the nine months of 2006).
CZP's gross profit for the nine months of 2007 decreased by 20% to $123 million compared to $146 million for the same period of the previous year. Gross profit margin for the nine months was 27% (9M 2006 Gross profit margin – 38%), EBITDA margin decreased from 33% to 28%. This was caused by an increase in costs and change in the sales structure (domestic vs export sales).
Cost of sales increased by $91 million to $327 million (9M 2006 – $236 million), primarily as a result of an increase in costs of materials and consumables used due to the higher prices for zinc concentrate and an increase in costs of repairs and maintenance.
Increase in repairs and maintenance costs was mainly attributed to the deferred repairs and maintenance expenses incurred in 2003 - 1H 2006, as a results of unfavorable LME zinc prices.
Starting from July 2006 Nova Zinc increased stripping operations (i.e. overburden and other waste removal) in order to reduce the lag in stripping. This increase also impacted consolidated amount of cost of sales. Distribution costs for the nine months of 2007 totaled $11 million, an increase of 92% compared to the same period of 2006 due to an increase in export sales volume. Net Income for the nine months ended September 30, 2007 totaled $69 million compared to $79 million for the same period of the year 2006.
Комментарии