DOW JONES NEWSWIRES
Mechel OAO's (MTL) 2007 net income rose 51% to $913.1 million, or $2.19 a share, from $603.2 million, or $1.48 a share, in 2006.
The Moscow-based company's net revenue was up 52% to $6.7 billion in 2007 from $4.4 billion the year before.
Mechel OAO's (MTL) operating income rose 92.6% to $1.4 billion of net revenue, in 2007, from $725.2 million, or 16.5% of net revenue, in 2006.
Mechel OAO's (MTL) operating income rose 92.6% to $1.4 billion.
2nd UPDATE: Mechel 2007 Net Pft Surges On Yakutugol Consol
May 29, 2008 11:40:12 (ET)
(Adds CEO comment and background.)
Mechel Chief Executive Igor Zyuzin also expressed his opposition to the government's mooted introduction of export duties on steel and steel products, saying the potential scheme wasn't "economically viable."
Net profit under U.S. Generally Accepted Accounting Principles totaled $913.1 million for the year ended Dec. 31, compared with $603.2 million in 2006. That figure is below a Dow Jones Newswires poll of four analysts, which had forecast $933.8 million.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 55% to $1.70 billion from $1.07 billion.
At 1507 GMT, Mechel's American Depository Receipts were down 0.1% at $55.4, but were outperforming other Russian stocks listed in New York.
Revenue jumped 52% to $6.68 billion from $4.40 billion as Mechel consolidated the rest of Yakutugol and saw strong demand and higher selling prices for key products like steel and coal.
The steel segment generated 65% of overall revenue in 2007, up 43% on the year. This year, Mechel said it will concentrate primarily on increasing output of higher value-added products, modernizing facilities and cutting costs in order to boost margins.
In mining, Zyuzin told a conference call that coal production would rise 50% on the year in 2008 to more than 31 million tons, 18 million tons of which would be coking coal with the remainder steam coal.
"We intend to capitalize on the current market environment by increasing sales, controlling expenses and operating in the most attractive and promising markets," Zyuzin said of the company's mining segment.
Mechel's ADRs have surged more than 70% since January as countries like China and India fuel global demand for steel, sending prices higher.
Russian steel stocks have seen some headwinds recently due to the possibility of the government imposing export duties as it cuts oil-sector taxation.
Zyuzin said the industry voiced its objections to the move at a recent meeting with Industry Minister Viktor Khristenko. "We hope that in the nearest future we'll be able to come to an understanding on the matter," he said.
Company Web site:
Mechel
