Interfax has reported that OJSC Belon, the parent company of the Belon coal and metals group, made Q1 net losses of RUB 731 million compared with a profit of RUB 642.5 million in the same period of last year. Belon attributed the losses to the higher cost of borrowing, negative exchange rate differences and considerable growth in natural monopoly tariffs. Sales revenue fell 43.6% YoY in Q1 2009 to RUB 3.771 billion. Gross operating profit was down 51% to RUB 783 million.
Belon said coal production rose in Q1 2009 by 38% YoY to 1.409 million tonnes, including growth of 23% to 795,000 tonnes of coking coal and 63% to 614,000 tonnes of steam coal. Coking coal production grew with the launch of the new Kostromovskaya deep mine, while steam coal grew with increased production at the Listvyazhnaya mine. It fell at the Novobachatsky strip mine, which is producing more in the way of coking coal as it deepens.
Group investments in Q1 totalled USD 12.4 million including USD 7.8 million in mines and concentrating plants and USD 4.6 million in ancillaries. The concentrating plants processed 1.852 million tonnes of coal or 12% less than in Q1 2008 because, Belon said, demand for concentrates among Russian consumers fell, especially in December 2008 and January 2009. Belon produced 1.305 million tonnes of coking and steam coal concentrates in the quarter.
Belon said 78% of the coal it processed was mined by the company itself compared with 49% YoY a year previously. However the Central Concentrating Plant produced and sold 425,000 tonnes of concentrate in March up from 311,000 tonnes in January.
Coking coal concentrate sales fell 20%YoY in Q1 2009 to 646,000 tonnes. Steam coal sales fell 11% YoY to 609,000 tonnes, although the shipments came to 671,000 tonnes including coal in transit. Shipments to MMK grew as a percentage of total coal shipments, while shipments to Novolipetsk Steel were unchanged.
Belon started exporting coal to Southeast Asia on a trial basis. Prices for Belon's coking coal was on average down 40% in the domestic market in Q1 2009 compared with Q4 2008 and down 41% compared with Q1 2008. Prices averaged up 120% in 2008 compared with 2007.
Belon said the headcount decreased by 179 to 7,780 during Q1 2009. Overall coal production rose 20% to 5.523 million tonnes in 2008, including growth of 44% to 2.889 million tonnes coking coal and a slight drop to 2.643 million tonnes of steam coal.
Belon's Dobrov has said the group was aiming to produce 7.5 million tonnes of coal this year as a whole. It targeted 7 million tonnes in 2008, but this was missed because Belon hardly produced any coking coal in Q4 due to the drop in demand for coking coal from the steel industry and difficulties exporting steam coal.
Belon will cut CAPEX to just over RUB 1.5 billion in 2009 from 3.995 billion rubles in 2008 because, Dobrov has said, the company managed to commission its main facilities before the crisis hit.
CAPEX fell 18.6% to USD 208.6 million in 2008. Belon invested USD 170 million of this in its coal division including USD 147.5 million in concentrating plants.
Source: Steel Guru
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