LONDON MMC Norilsk Nickel posted net income of $554 million for the first half of 2013, down 63 percent from just over $1.5 billion in the same period last year due to a "substantial revenue contraction" and major non-cash write-offs, the company said Aug. 29.
Excluding non-cash write-offs, earnings of $1.2 billion were down 21 percent in the same comparison.
Revenue fell 6.1 percent to just under $5.57 billion from $5.93 billion a year earlier because of weak metal prices and lower sales volumes of nickel and platinum, Norilsk said.
Despite the declines, the company described its performance during the period as "robust" in the face of a "turbulent macro environment" and falling commodity prices.
In the first half, concerns surrounding the slowdown of economic growth in China, the lack of firm recovery signs in the rest of the world and the expectations of fiscal stimulus tapering off in the United States all drove down the prices of most metals produced by Norilsk.
"We expect the global macro uncertainty to persist in (the second half), but note a stabilization of the economic growth in China and some early signs of economic recovery in the developed world," the company said.
It added that it now believes nickel prices are bottoming out, although a price recovery will be capped by a market surplus.
"The focus for us for the coming months will be on finalizing our new strategy, which will be presented to the investment community in the fourth quarter of this year," chief executive officer Vladimir Potanin said.
The new strategy at Norilsk will be built around reaching the full commercial potential of the companys resource base in Taimyr as well as focusing on the companys capital discipline and return-based investment governance, he said.
First-half capital expenditures declined 21 percent year on year to $900 million as Norilsk management implemented a stricter capital allocation policy, with expected savings of at least $300 million for the full year.
The Moscow-based company also began restructuring its corporate head office with the aim of bringing practices in line with global industry standards, and took on a new management team.
A strategic review on noncore businesses and certain international assets also has been launched, Norilsk said.
A version of this article was first published by AMM sister publication Metal Bulletin.