Financial indicators of Norilsk Nickel

Main article: Norilsk Nickel

2023

Revenue decline by 15% to $14.41 billion

Norilsk Nickel's revenue at the end of 2023 amounted to $14.41 billion (according to IFRS), which is 15% less than a year earlier. Net profit decreased even more - by 51%, to $2.87 billion. Such data are provided in the statements that the company disclosed in February 2024.

A significant decrease in Norilsk Nickel's revenue, as explained in the statements, was due to a drop in sales prices for nickel (by 16%), palladium (by 36%), rhodium and copper. An additional negative factor was the expected decrease in the production of all metals, except platinum, due to a temporary decrease in ore production due to the transition to new mining equipment.

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Nornickel

It also follows from the materials of Norilsk Nickel that the group's net debt by the end of 2023 amounted to $8.09 billion, which is 18% less than a year ago. Net working capital in comparison with these periods decreased by 23%, to $3.09 billion.

Norilsk Nickel's capital expenditures decreased by 29% - from $4.3 billion in 2022 to $3.04 billion a year later. The reduction was due to the weakening of the ruble and optimization of settlements with contractors, as well as a revision of the schedules of a number of investment projects, due to voluntary sanctions from a number of foreign suppliers for the supply of imported equipment and technologies.

The net profit of Norilsk Nickel under RAS in 2023 amounted to 283 billion rubles, which is 58% more than in 2022. The dynamics is explained by an increase in income from participation in other organizations (336 billion rubles compared to 365 million rubles a year earlier), which was partially offset by the comparative effect of foreign exchange expenses.

Revenue for 2023 increased by 5%, amounting to 877 billion rubles. The growth was due to the weakening of the effective ruble exchange rate by 24% in 2023, but offset by a decrease in world average prices for certain metals.

As Interfax notes, Norilsk Nickel's RAS reporting is unconsolidated and reflects the performance of only the company's Polar Branch (without Kola MMC and Bystrinsky GOK).^[1]

Increase in platinum production by 2% to 664 tons

On January 29, 2024, Norilsk Nickel published the results of its production activities for the previous year. The company reduced the output of most metals, except platinum, whose production in 2023 increased by 2%, to 664 tons.

Nickel production by the group in 2023 amounted to 209 thousand tons, which is 5% less than a year earlier. Norilsk Nickel reduced its annual copper output by 2%, to 425 thousand tons, due to a decrease in ore production, as well as by adjusting technological processes to improve the quality of copper cathodes in order to meet the requirements of new consumers. Excluding the Trans-Baikal Division in 2023, copper production from its own raw materials amounted to 356 thousand tons, in accordance with the forecast (353-373 thousand tons).

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Nornickel

In addition, Norilsk Nickel during the reporting period reduced palladium production by 4% to 2.69 million ounces, and platinum production increased by 2% to 664 thousand ounces.

Such multidirectional dynamics was associated with a change in the ratio of platinum group metals in the structure of processed raw materials, the materials of Norilsk Nickel say.

Sergey Stepanov, Senior Vice President and Production Director of the company, told reporters that in 2023 Norilsk Nickel reduced production volumes of all metals except platinum due to a temporary decrease in production of rich and copper ore, which was associated with the transition to new mining equipment.

According to Stepanov, after testing and gradual commissioning of mining equipment from new suppliers, the mines reached the planned indicators for ore extraction in the fourth quarter. He also noted that at the end of 2023, the company produced nickel and copper in accordance with annual forecasts, and palladium and platinum - above forecasts.

NORNICKEL ANNOUNCES 2023 PRODUCTION RESULTS

Decrease in revenue by 20% in the first half of the year to $7.2 billion

In early August 2023, Norilsk Nickel published financial results for IFRS the first half of 2023:

• Revenue: $7.2 billion (-20% YoY)
• EBITDA: $3.4 billion (-30% YoY)
• Net income: $1.1 billion (-79% YoY)
• Net debt: $9.1 billion (-8% YoY)
• Net Debt/EBITDA: 1.2x

Approval of an investment program for $3.6 billion

At the end of December 2023, the Board of Directors of Norilsk Nickel approved the company's budget for 2024. It includes capital expenditures of $3.6 billion.

According to the press service of Norilsk Nickel, within the framework of the investment program, the company will continue to implement a strategy of moderate growth and sustainable development, which includes investment growth projects in the field of production and processing, modernization and replacement of equipment, aimed at improving the level of industrial safety and labor protection, updating energy and fuel infrastructure, as well as reducing harmful impact on the environment.

Norilsk Nickel approved an annual investment program for $3.6 billion

Among other things, in 2024, it is planned to replace mining equipment for the Norilsk Division and an important repair of the suspended smelting furnace at the Nadezhdinsky Metallurgical Plant. In addition, Norilsk Nickel intends to continue the implementation of a comprehensive plan for the renovation of the Norilsk Industrial District and other social tasks.

The company continues to respond to new challenges in the field of sales of finished products, supply of resources and equipment, inflationary pressure, increasing tax burden and managing the loan portfolio, Norilsk Nickel said in a statement.

In 2023, Norilsk Nickel's capital expenditures amounted to $3.5-3.8 billion. The initial estimate was $4.7 billion, the revision was caused by the weakening of the ruble and a change in the schedules for the implementation of a number of projects. According to the results of the first half of 2023, the volume of capital investments of Norilsk Nickel was measured at $1.5 billion.

In November 2023, Sergey Malyshev, Senior Vice President and Financial Director of Norilsk Nickel, said that the company's total investments in 2018-2022. exceeded 800 billion rubles. He also noted that the volume of the investment program for 2023 is more than 300 billion rubles.^[2]

2022

Nickel export growth by 190% to $5.8 billion

In 2022, Norilsk Nickel delivered nickel abroad in the amount of $5.8 billion, which is 190% more than a year ago. This is evidenced by the data of the Federal Customs Service (FCS), which became known in mid-October 2023.

According to Forbes, at the end of 2022, the company's nickel exports to the EU countries increased by 4.3% compared to the previous year (to 61.3 thousand tons). This region also accounted for the bulk of Norilsk Nickel's sales (47%). The company's sales to Asia amounted to 31%, to North and South America - 15%, to Russia and the CIS countries - 7%. Domestic demand has increased due to import substitution, which is carried out by Russian manufacturers, said Anton Berlin, vice president of sales at Norilsk Nickel, during the presentation.

Norilsk Nickel delivered nickel abroad in the amount of $5.8 billion

Due to Western sanctions against Russian companies and goods that do not directly concern Norilsk Nickel, the company is forced to reorient part of its supplies to the markets of Asia and other friendly countries, said Vladimir Potanin, the largest co-owner and president.

In order to fight this sanctions headwind, as I have repeatedly said, the so-called plan B is needed, that is, the reorientation of our supplies, our partnerships to the so-called friendly countries, he said.

As noted in Norilsk Nickel, the company's reorientation to Asia is due to the fact that it has practically ceased cooperation with Western investors and international banks.

{{quote 'Dialogues are conducted, but by inertia. From this point of view, of course, our focus is still within the country. But we are trying to look at the opportunities that are in the Asian market, primarily in China, "said Vladimir Zhukov, vice president of investor relations and sustainability at Norilsk Nickel. ^[3]

Revenue decline by 5% to $16.88 billion

At the end of 2022, Norilsk Nickel raised $16.88 billion, which is 5% less than a year earlier. Net profit of the world's largest producer of palladium and high-grade nickel decreased by 16%, to $5.85 billion. The Russian company disclosed such data on February 10, 2023.

The main revenue in 2022 fell on the MMC group ($12.24 billion; + 3%). Revenues of the southern cluster increased by 27%, to $972 million. The revenue of the GC "Bystrinskoye" fell by 2%, to $1.33 billion, according to the reporting.

According to Norilsk Nickel, the positive effect of rising prices for nickel and cobalt, as well as the recovery in production volumes after eliminating the consequences of accidents at the Oktyabrsky, Taimyr mines and the Norilsk enrichment plant, was offset by lower prices for copper and MPG, as well as a reduction in sales volumes due to lengthening supply chains and reorientation to new sales markets, which requires additional time.

The company's net debt in 2022 increased 2 times to $9.8 billion due to a decrease in free cash flow, as well as dividend payments. At the same time, the ratio of net debt to EBITDA as of December 31, 2022 amounted to 1.1x.

The volume of capital investments increased by 55% to a record $4.3 billion due to the planned growth of investments in flagship environmental and mining and metallurgical projects, as well as capitalized repairs aimed at improving industrial safety and reducing the physical risks of production assets.

The free cash flow (FCF) of Norilsk Nickel at the end of 2022 amounted to $437 million, which is 10 times less than a year earlier. The Company attributes this to a decrease in EBITDA, an increase in working capital and an increase in capex during the reporting period.

NORNICKEL ANNOUNCES AUDITED CONSOLIDATED FINANCIAL RESULTS UNDER IFRS 2022

Growth in nickel production by 13% to 219 thousand tons

On January 24, 2023, Norilsk Nickel published the results of its production activities for 2022. According to the results of this 12-month period, nickel production increased by 13% compared to 2020 and amounted to 219 thousand tons, of which almost the entire volume was produced from the company's own raw materials (218.7 thousand tons, + 15% year-on-year).

The growth in production in 2022 was associated with a low base in 2021, when the Oktyabrsky and Taimyr mines, as well as the Norilsk enrichment plant, were temporarily suspended due to the accident. At the end of 2022, nickel production from its own raw materials amounted to 218.7 thousand tons, which is higher than the forecast in the amount of 205-215 thousand tons, according to the materials of Norilsk Nickel.

Norilsk Nickel increased nickel production by 13% in 2022

At the end of 2022, the group increased copper production by 6% to 433 thousand tons. The reasons for the change in copper production in the reporting period are similar to nickel and are described above. Excluding the Trans-Baikal Division, copper production from its own raw materials in 2022 amounted to 366 thousand tons, which corresponds to the forecast of 365-385 thousand tons.

In 2022, palladium and platinum were produced only from the company's own raw materials, respectively, 2,790 thousand ounces (+ 7% yoy-yoy) and 651 thousand ounces (+ 2% yoy-yoy). The reasons for the increase in palladium and platinum production during the reporting period are similar to nickel and are indicated above. At the end of 2022, the company exceeded the forecast for the production of palladium from its own raw materials in the amount of 2,451-2,708 thousand ounces and remained within the framework of the declared forecast for platinum (604-667 thousand ounces^[4]

"In 2022, Nornickel fully fulfilled its production program. We increased production of all metals, with copper and platinum output matching forecasts, and nickel and palladium production volumes exceeding them. The main reason for the higher than expected results was the postponement of the repair of the suspended smelting furnace (PVP-2) of the Nadezhda Metallurgical Plant to 2023, "said Sergey Stepanov, Senior Vice President and Production Director of Norilsk Nickel.

2021: Revenue growth by 15% - $17.85 billion, profit by 92%, to $6.97 billion

At the end of 2021, Norilsk Nickel earned $17.85 billion in revenue, which is 15% more than a year earlier. The rise was primarily due to an increase in exchange prices for metals and an increase in sales of palladium from reserves accumulated in 2020, which compensated for the decrease in production caused by incidents in the first half of 2021, the company said on February 10, 2022.

Norilsk Nickel's net profit in 2021 reached $6.97 billion, an increase of 92% compared to the previous year. Net debt for the year practically did not change and amounted to $4.9 billion. Net working capital in 2021 rose to $1.3 billion, mainly due to an increase in the value of reserves due to an increase in the rate of tax on the extraction minerals of useful, as well as changes in income tax debt.

Norilsk Nickel revenue in 2021 rose by 15%

It also follows from the company's report that its capital investments in 2021 increased by 57% to a record $2.8 billion due to strategic growth in investments in key projects. The costs of the sulphur program, the implementation of which entered the active phase, exceeded $500 million, and investments in the Southern cluster and the expansion of the Talnakh enrichment plant increased by 3 and 4 times, respectively. Expenses on capitalized repairs, industrial safety and modernization of fixed assets of the group's enterprises increased by more than 40%, exceeding $800 million.

Thanks to the revival of the global economy after the economic recession of 2020 caused by the coronavirus epidemic, the consumption of Norilsk Nickel products in 2021 grew rapidly, says the president of the company Vladimir Potanin, commenting on the financial performance of the producer of nickel and palladium. - Demand for metals needed to transition to a green economy also increased.[5]

2020: Revenue growth by 15%, to $15.5 billion, net debt - $4.7 billion

In 2020, Norilsk Nickel received consolidated revenue of $15.5 billion, which is 15% more than a year earlier. This rise in the company was associated with an increase in exchange prices for palladium and rhodium, as well as a planned increase in production at Bystrinsky GOK. Norilsk Nickel's net profit in 2020 decreased by 39% compared to 2019, to $3.63 billion.

Norilsk Nickel ended 2020 with net debts of $4.7 billion, which are a third less than a year ago. Norilsk Nickel's net working capital in 2020 decreased by 28% to $712 million. This decrease in the company was associated with the weakening of the ruble exchange rate and a change in income tax debt, which was partially compensated by the accumulation of stocks of finished products.

Nornickel's capital investments in 2020 increased by 33% on an annualized basis, to $1.8 billion, due to the implementation of mining projects at the Talnakhskoye field, the development of the Southern Cluster project, an increase in overhauls of energy infrastructure facilities, investments in industrial safety, as well as the start of the active phase constructions of the Sulfur Project.

Norilsk Nickel completed 2020 with debts of $4.7 billion

It also follows from the financial statements of Norilsk Nickel that the revenue of the Russian mining and metallurgical company from the sale of metals in 2020 amounted to $14.98 billion against $12.85 billion a year earlier. In Russia and the CIS countries, sales decreased from $639 million to $556 million.

Revenues from nickel sales in Russia and the CIS in 2020 reached $241 million, surpassing the one-year-old figure of $233 million. Copper sales decreased from $220 million to $202 million, palladium - from $80 million to $5 million. Norilsk Nickel earned about $27 million in gold in Russia and the CIS at the end of 2020, while in 2019 revenue was measured at $19 million.^[6]

2018: Palladium production decreased by 1.83%

According to the results of 2018, the Russian producer of palladium - MMC Norilsk Nickel - reduced palladium production by 1.83% compared to a year earlier - to 2.729 million ounces (84.9 tons)^[7]

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