Norilsk bleeds as low prices hurt assets
Norilsk Nickel, the Russian nickel and palladium miner whose foray into WA was disastrous, has reported a 64 per cent slide in profit for last year courtesy of lacklustre prices and assets vale downgrades.
Net income slid to $US774 million ($834 million) from $2.17 billion, Norilsk said yesterday in a statement.
Sales slumped 7.1 percent to $US11.5 billion while earnings before interest, depreciation and amortization dropped 15 per cent to $US4.2 billion.
Average nickel prices fell 14 per cent last year as steelmakers grappled with excess capacity. Norilsk last year posted $US841 million of non-cash write-offs after reviewing the value of its assets.
In September Norilsk asked Citigroup to find a buyer for the loss-making Australian mines it acquired in the $7 billion takeover of LionOre Mining International in 2007. Norilsk owns the mothballed Lake Johnston, Cawse and Black Swan nickel mines and the Honeymoon Well nickel deposit. It is selling the Thunderbox and Bannockburn gold mines to Saracen Minerals.
Norilsk cut costs and investment, reducing its net working capital by $US1.1 billion, chief executive Vladimir Potanin said.
That led to an almost fivefold increase in free cash flow generation to $US2.4 billion.
The company believes nickel prices will recover this year and next, with demand for platinum and palladium also forecast to rise in coming months.
With agencies
