LONDON MMC Norilsk
Nickels full-year net income fell 41 percent to $2.1
billion last year, with $976 million in noncash write-offs.
Overall sales revenue of $12.1
billion was down 15 percent from the previous year due to
"unfavorable pricing trends" among the metals produced by
Norilsk. Metal sales revenue dropped 17 percent to $11.1
billion last year even though physical volumes were more or
The average sale price of nickel
fell the most markedly during 2012, sliding 23 percent to
$17,719 per tonne.
"Taking into account the
unfavorable macroeconomic environment in 2012, we consider the
financial results of the company to be decent," chief financial
officer Sergey Malyshev said in a statement. "Norilsk Nickel
continued to generate stable cash flow from its operations,
which provides for a stable level of investments in its core
The companys earnings
before interest, taxes, depreciation and amortization (Ebitda)
totaled $4.9 billion, down 32 percent from 2011. Cash operating
costs were 2-percent higher at $4.7 billion, the company
"Managements efforts to
control costs resulted in a modest increase in operating
expenses," Malyshev said. "At the same time, we see additional
opportunities for cost optimization. As the capital markets
currently offer attractive terms, were considering the
rebalancing of the capital structure of the company."
Norilsk has already reduced its
share capital by nearly 9.7 percent via the cancellation of
18.5 million treasury shares.
Revenue from nickel accounted
for nearly half of the companys metal sales in 2012.
However, total revenue from nickel sales fell 22 percent from
the previous year to $5.2 billion as a result of negative price
Revenue from copper accounted
for 26 percent of Norilsks total metal sales in 2012,
declining 12 percent from the previous year to $2.9 billion.
The average selling price for copper fell 10 percent to $8,015
per tonne last year, the company said.
Revenue from palladium sales was
down 13 percent to $1.7 billion, and platinum sales revenue
fell 10 percent to $1 billion.
The Moscow-based companys
impairment charges included $279 million on plant, property and
equipment; $102 million on investments in associates; and $595
million on financial assets.
A version of this article was first published by AMM sister
publication Metal Bulletin.