MOSCOW, April 27, 2009 (GLOBE NEWSWIRE) -- Mechel OAO (NYSE:MTL), one of the leading Russian mining and metals companies, today announces Q1 2009 operational results.
Products Q1 2009, thousand tons Q1 2009 to Q1 2008, %
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Coal 3,425 -52.9
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Coking 1,022 -76.3
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Steam 2,403 -19
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Coal concentrate* 2,207 -46.5
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Coking 884 -73.4
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Steam 1,323 +67
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Iron ore concentrate 929 -20
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Nickel 2.9 -33
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Ferrosilicon 24.4 +6
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Ferrochrome 7.7 n/a
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Hardware 123.8 -32
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Forgings 14 -28
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Stampings 11.2 -53.4
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Rolled products 1,071 -21.6
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Flat products 67 -42
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Long products 710 -13
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Billets 294.4 -32.1
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Steel 1,100 -29.6
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Pig iron 686 -29.3
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Coke 543 -40.8
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Power production
(thousand kWh) 899,309 -29.5
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* Coal concentrate is produced from a part of raw coal tonnage mined.
Vladimir Polin, senior vice-president of Mechel OAO, commented on the first quarter 2009 operational results: "Negative trends caused by the global economic crisis have affected Mechel's operational results in Q1 2009. Unfavorable market conditions and, first of all, a drop in demand in construction and machinery industries, caused reduction of output in our steel division and in all the other segments following our production chain.
"At our coal mining operations we changed mining plans in favor of increased production of steam coal as demand for this product was stable. This allowed us to more than double the output of steam coal concentrate.
"In our steel segment, pig iron production was reduced due to the overhaul of the blast furnace No. 4 for capital repair in Q4 2008. The furnace was commissioned in the beginning of April, 2009 and we expect the output to reach previous levels.
"We continue implementing our strategy of increasing the output of high-margin downstream products, that is why we reduced the share of low-marginable products (billets) in our product portfolio. Overall reduction of steel and rolled products output is in line with market trends.
"In our ferroalloys segment there was a decline in demand and, consequently, in output of nickel. At the same time, Bratsk Ferroalloys Plant and Tikhvin Ferroalloy Smelting Plant operations fully matched the load of previous periods. At the same time in the first quarter of 2009 we increased production of ferrocilicon.
"Our sales company, Mechel Service, continued active work with steel products end-customers in different regions of Russia and abroad. Its efforts allowed us to secure a minimum decrease in our steelmaking capacities load and to retain our market position notwithstanding the gross reduction in output throughout the steel industry and the overall economy downturn.
"We continue monitoring our markets and will make prompt responses to changes in demand, ensuring stable operations of the company in the current economic environment."
Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy, and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, rolled products, ferroalloys, hardware, heat and electric power. Mechel products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identify important factors, including those contained in the section captioned "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in our Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.