UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

March 1, 2022

(Commission File No. 001-32328)

 

MECHEL PAO

(Translation of registrant’s name into English)

 

Krasnoarmeyskaya 1,

Moscow 125167

Russian Federation

 

(Address of registrant’s principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F   Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b) (7): [ ]

   

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

    Yes      No  

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):    n/a 

 

 

 

 


 

MECHEL REPORTS THE FY 2021 FINANCIAL RESULTS

 

 

Moscow, Russia – March 1, 2022 – Mechel PAO (MOEX: MTLR, NYSE: MTL), a leading Russian mining and steel group, announces financial results for the FY 2021.

 

Consolidated Results for the FY’2021

Mechel PAO’s Chief Executive Officer Oleg Korzhov commented:

“The Group’s consolidated revenue in 2021 amounted to 402.1 billion rubles, up by 51% year-on-year. EBITDA was 118.9 billion rubles, demonstrating a 190% growth year-on-year. EBITDA margin was 30%, doubling the EBITDA margin of 2020.

“Favorable trends on steel and metallurgical commodity markets was the key driver for the improvement of the Group’s financial results. On average, the prices for our facilities’ steel products went up by 60% year-on-year. Average coking coal concentrate prices doubled.

“Despite a correction in coal prices at the end of the year, the factors that determined their dynamics in 2021 have not changed. High demand for coal products and supply constraints persist. As such, prices stabilized at levels lower than October highs, but higher than maximums of the previous years.

“Our net debt went down by over 50 billion rubles compared to the last year. Net debt to EBITDA ratio went down to 2.3, which is a record unseen by our company for many years.

“Operational results in 2021 went down year-on-year in both our mining and steel segments. This was due to insufficient funding of our facilities in previous years as we needed to service and repay substantial financial obligations. With high price levels in 2021, the Group’s cash flow significantly improved, which enabled us to focus on solving the piled-up problems. Last year we managed to repay most of the earlier accumulated liabilities to our contractors and restore the level of inventory stocks necessary for stable operations of our production and sales facilities. We also financed our repair and upgrade program and acquired new equipment.

“Last year’s efforts on restoring operational volumes have not yet fully reflected in our operating results. Only our steel division has demonstrated growing pig iron and steel output in the past quarter, outperforming the previous three quarters. This year we expect our operations to reveal quarterly improvement.”

 

Mln rubles

FY’21

FY’20

%

4Q’21

3Q’21

%

Revenue

from contracts with external customers

402,074

265,454

51%

114,251

102,913

11%

Operating profit

102,666

19,925

415%

30,426

28,887

5%

EBITDA1

118,907

41,051

190%

35,020

31,918

10%

EBITDA, margin

30%

15%

 

31%

31%

 

Profit

attributable to equity shareholders of Mechel PAO

80,570

808

9872%

27,488

21,277

29%

 

1 

EBITDA - Adjusted EBITDA. Please find the calculation of the Adjusted EBITDA and other non-IFRS measures used here and hereafter in Attachment A.

 

 


 

 

Financial results for the 4Q’2021 vs 3Q’2021

Revenue

The Group’s consolidated revenue from sales to third parties in 4Q2021 went up by 11% and amounted to 114.3 billion rubles.

EBITDA

Consolidated EBITDA in 4Q2021 amounted to 35.0 billion rubles, which is 10% more quarter-on-quarter.

Profit

Profit attributable to Mechel PAO’s equity shareholders in 4Q2021 went up by 6.2 billion rubles, or 29% quarter-on-quarter and amounted to 27.5 billion rubles. The mining division’s results contributed to this improvement the most.

Operating cash flow

As our key financial results improved in 4Q2021 quarter-on-quarter, operational cash flow went up by 18.9 billion rubles and amounted to 31.9 billion rubles. The cash flow remains sufficient not only for funding the Group’s operational and decreasing its debt leverage, but also for investing in maintenance and development of our facilities.

Finance costs

In 4Q2021, the Group’s finance costs demonstrated an increase of 0.2 billion rubles, going up to 6.3 billion rubles as the Bank of Russia’s key interest rate went up. For this reason, the amount of interest paid, including interest paid on lease liabilities, went up from 4.8 billion rubles in 3Q2021 to 5 billion in 4Q2021.

Financial results for the FY’2021 vs FY’2020

Revenue

In 2021, the Group’s consolidated revenue amounted to 402.1 billion rubles, up 136.6 billion rubles or 51% year-on-year.

EBITDA

Consolidated EBITDA in 2021 was 118.9 billion rubles, which is 77.8 billion or 190% more than in 2020 (41.1 billion rubles) primarily due to gross profit’s 83.2-billion-ruble growth as prices for our mining and steel products went up.

Profit

Profit attributable to Mechel PAO’s equity shareholders amounted to 80.6 billion rubles, which is 79.8 billion more than in 2020. Apart from gross profit’s growth, another major impact came from the increase in foreign exchange gains on foreign currency denominated liabilities by 7.9 billion rubles, as compared to loss of 36.4 billion rubles in 2020.

Trade working capital

In 2021 the Group’s trade working capital changed by 34.6 billion rubles and amounted to 25.6 billion rubles, which was largely due to accumulating inventories by 20.3 billion rubles due to growing raw materials prices and prices for stockpiled products, as well as the increase in trade receivables by 7.9 billion as prices for our mining and steel products demonstrated substantial growth.

Finance costs

In 2021, the Group’s finance costs went down year-on-year by 1.8 billion rubles or 7%, and the amount of interest paid, including interest paid on lease liabilities, was 19.4 billion rubles, which is 16% less year-on-year (23 billion in 2020) as the Group’s debt leverage went down substantially.

Debt leverage

As of December 31, 2021, the Group’s net debt excluding fines and penalties on overdue amounts went down by 50.6 billion rubles as compared to December 31, 2020, and amounted to 275 billion rubles. This was due to net loan settlement as well as the ruble’s strengthening against the euro.

The Net Debt to EBITDA ratio improved considerably by the end of 2021 and amounted to 2.3, as compared to 7.9 at the end of 2020.

 

Mining Segment

Mln rubles

FY’21

FY’20

%

4Q’21

3Q’21

%

Revenue

from contracts with external customers

110,791

70,881

56%

35,466

29,765

19%

Revenue

inter-segment

54,182

34,402

57%

14,941

15,623

-4%

EBITDA

75,574

26,259

188%

24,145

23,552

3%

EBITDA, margin

46%

25%

 

48%

52%

 

 

Revenue

Revenue from sales to third parties in 4Q2021 went up by 19% quarter-on-quarter. This was due to a hike in prices for all types of the division’s output. The decrease in metallurgical coals and middlings sales volumes proved a restraining factor. Revenue from contracts with external customers in 2021 went up by 56% year-on-year.

EBITDA

EBITDA in 4Q2021 went up by 3% quarter-on-quarter. The positive impact from growing revenue was offset by increasing costs as sales volumes went down. In 2021, the division’s EBITDA went up 188% year-on-year. This was primarily due to higher prices for all kinds of the division’s output year-on-year.

 

Last year was marked by high volatility on the markets for our mining division’s key products — coking coal concentrate and metallurgical coals. After a fairly stable first third of the year, where moderate price fluctuations addressed only FOB Australia based coal, starting in late May prices skyrocketed on every market.

The price dynamics was due to high demand from consumers as well as limited supply as Australian mining companies underwent repairs, China’s shortage of domestic coking coal supply as outdated mines closed down, as well as unstable supply from Mongolia due to worsening pandemic situation in that country.

With these trends, the prices continued to actively grow throughout the third quarter and into the fourth. By late October prices reached record highs — about $400 per tonne of coking coal concentrate FOB Australia and $600 per tonne CFR China.

In October Chinese authorities undertook a series of measures to bring down coking coal prices. As a result, global coal prices went down significantly from record highs, but still remained at historical maximums. Starting in early 2022,


prices again demonstrated an upward trend and have now stabilized at approximately $440 per tonne of coking coal concentrate FOB Australia and $390 per tonne CFR China.

As a result, average yearly prices for metallurgical coals sold by our mining division in 2021 were nearly double the average prices of 2020.

The division’s financial results reflected those favorable market trends. Revenue from sales to third parties grew by more than one and a half times year-on-year, with EBITDA nearly tripled and EBITDA margin reaching 46%.

In these conditions, the division’s main challenge was and is restoring operating performance. Due to funding shortages that became particularly acute in mid-2020, insufficient investment in acquiring new equipment and existing equipment repairing, as well as stripping works, led to a decrease in mining volumes.

Throughout 2021 the division’s facilities focused on repairing their current equipment and acquired new equipment and machinery. By the end of the year, most of that equipment arrived and was put into operation. Unfortunately, not all our plans realized, partly due to complicated weather and geological conditions. In 2022, more equipment will come to our facilities.

 

Steel Segment

Mln rubles

FY’21

FY’20

%

4Q’21

3Q’21

%

Revenue

from contracts with external customers

262,500

166,885

57%

70,796

67,184

5%

Revenue

inter-segment

5,926

6,626

-11%

1,749

1,254

39%

EBITDA

43,362

13,154

230%

8,941

10,041

-11%

EBITDA, margin

16%

8%

 

12%

15%

 

 

Revenue

Revenue from contracts with external customers in 4Q2021 went up by 5% quarter-on-quarter due to increased sales volumes. Weakening market trends have restrained revenue dynamics. Revenue from sales to third parties in 2021 demonstrated a 57% growth year-on-year due to a significant price growth.

EBITDA

In 4Q2021, EBITDA went down by 11% as cost of sales grew due to increased coke prices. EBITDA margin in 4Q2021 went down to 12%. Over 2021, EBITDA demonstrated a 230% increase year-on-year due to growing prices for all of the division’s output, despite an increase in cost of sales caused by increased prices for iron ore, coke and scrap.

 

The year-on-year dynamics of our financial results was most defined by growing prices for the entire product range of our division’s facilities. As a result, in 2021 revenue went up by more than one and a half times, operating profit grew nearly sixfold to reach 37.4 billion rubles from 6.5 billion in 2020. EBITDA went up by 230%, EBITDA margin doubled.

The growth of sales volumes in 4Q2021 had a positive impact on the division’s financial results. At the same time, the seasonal decrease in this period’s average prices as well as increased costs had a negative impact. As a result, revenue went up by 5% quarter-on-quarter, while EBITDA and EBITDA margin went down.

However, even though the division’s operating results went down year-on-year, we must note increased output of pig iron and steel in 4Q2021 quarter-on-quarter. In last year’s final quarter the division’s operating results reached that year’s maximum, which also had a positive impact on sales.

This was the result of repairs and equipment upgrades the division’s facilities conducted last year, as well as launches of new equipment and expansion of our product range. Favorable market trends helped strengthen our facilities’ financial situation, and that enabled us to improve our producers’ supply of necessary raw materials, ferroalloys, spare parts and other materials, as well as bring down unplanned equipment downtime.

Power Segment

Mln rubles

FY’21

FY’20

%

4Q’21

3Q’21

%

Revenue

from contracts with external customers

28,783

27,688

4%

7,989

5,964

34%

Revenue

inter-segment

16,636

15,769

5%

4,767

3,730

28%

EBITDA

1,633

2,349

-30%

327

514

-36%

EBITDA, margin

4%

5%

 

3%

5%

 

 

 

 

 


 

Revenue

The division’s revenue in 4Q2021 went up by 34% quarter-on-quarter due mostly to seasonal factors. Revenue for 2021 went up by 4% year-on-year as unregulated capacity prices on the wholesale electric power and capacity market as well as retail markup increased year-on-year.

EBITDA

The quarter-on-quarter dynamics of the division’s EBITDA was defined by one-time events which led to a decrease in general administrative and other operating expenses as well as seasonal factors. EBITDA in 2021 went down by 30% year-on-year due to increased costs of sales and selling and distribution expenses.

 

***

Full version of Mechel PAO Consolidated Financial Statements is available at Company’s website –

https://www.mechel.com/shareholders/report/financial-statements/

 

***

Alexey Lukashov

Mechel PAO

Phone: 7-495-221-88-88

Fax: 7-495-221-88-00

alexey.lukashov@mechel.com

***

Mechel is an international mining and steel company. Its products are marketed in Europe, Asia, North and South America. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, heat and electric power. All of its enterprises work in a single production chain, from raw materials to high value-added products.

***

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.

 

 

 


 

Attachments to the Press Release

 

Attachment A

Non-IFRS financial measures. This press release includes financial information prepared in accordance with International Financial Reporting Standards, or IFRS, as well as other financial measures referred to as non-IFRS. The non-IFRS financial measures should be considered in addition to, but not as a substitute for the information prepared in accordance with IFRS.

Adjusted EBITDA (EBITDA) represents profit (loss) attributable to equity shareholders of Mechel PAO before Depreciation and amortisation, Foreign exchange (gain) loss, net, Finance costs, Finance income, Impairment of goodwill and other non-current assets, net, Net result on the disposal of non-current assets, Allowance for expected credit losses, Provision (reversal of provision) for doubtful accounts, Write-off of trade and other receivables and payables, net, Change in provision for inventories at net realisable value, (Profit) loss after tax for the period from discontinued operations, Net result on the disposal of subsidiaries, Profit (loss) attributable to non-controlling interests, Income tax expense (benefit), Effect of pension obligations, Other fines and penalties and Other one-off items. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of our Revenue. Our adjusted EBITDA may not be similar to EBITDA measures of other companies. Adjusted EBITDA is not a measurement under IFRS and should be considered in addition to, but not as a substitute for the information contained in our consolidated statement of profit or loss and other comprehensive income. We believe that our adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation, amortisation and impairment of goodwill and other non-current assets are considered operating expenses under IFRS, these expenses primarily represent the non-cash current period allocation of costs associated with non-current assets acquired or constructed in prior periods. Our adjusted EBITDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the metals and mining industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Our calculation of Net debt, excluding fines and penalties on overdue amounts**

 

** Calculations of Net debt could be differed from indicators calculated in accordance with loan agreements upon dependence on definitions in such agreements.


 

is presented below:  

Mln rubles

31.12.2021

31.12.2020

Current loans and borrowings, excluding interest payable, fines and penalties on overdue amounts

        268,525

301,609

Interest payable

            10,527

           9,750

Non-current loans and borrowings

            100

           2,201

Other non-current financial liabilities

1,666

           1,901

Other current financial liabilities

               460  

              324

less Cash and cash equivalents

(17,701)

         (1,706)

Net debt, excluding lease liabilities, fines and penalties on overdue amounts

        263,577

       314,079

 

 

 

Current lease liabilities

            7,526

           7,535

Non-current lease liabilities

            3,886

           3,958

Net debt, excluding fines and penalties on overdue amounts

        274,989

       325,572

EBITDA can be reconciled to our consolidated statement of profit or loss and other comprehensive income as follows:

 

 


 

 

 

Mln rubles

Consolidated Results

 

Mining Segment ***

 

Steel Segment***

 

Power Segment***

12m2021

12m2020

 

12m2021

12m2020

 

12m2021

12m2020

 

12m2021

12m2020

Profit (loss) attributable to equity shareholders of Mechel PAO

80,570

808

 

57,953

38,742

 

25,053

(34,383)

 

(1,697)

(1,081)

Add:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

13,357

14,286

 

6,574

7,463

 

6,314

6,335

 

469

488

Foreign exchange (gain) loss, net

(7,891)

36,388

 

(402)

7,400

 

(7,480)

28,928

 

(8)

59

Finance costs

23,371

25,145

 

9,633

12,408

 

15,741

14,403

 

546

447

Finance income

(676)

(3,504)

 

(2,561)

(2,289)

 

(628)

(3,306)

 

(36)

(23)

Impairment of goodwill and other non-current assets, net and loss on write-off of non-current assets, allowance for expected credit losses, provision (reversal of provision) for doubtful accounts, write-off of trade and other receivables and payables, net and change in provision for inventories at net realisable value

2,250

3,626

 

886

3,485

 

(775)

4

 

2,140

138

Profit after tax for the period from discontinued operations

-  

(41,609)

 

-  

(41,651)

 

-  

-  

 

-  

-  

Net result on the disposal of subsidiaries

(1,130)

23

 

-  

-  

 

(1,130)

23

 

-  

-  

Profit attributable to non-controlling interests

2,049

648

 

690

110

 

1,084

217

 

275

321

Income tax expense (benefit)

6,511

2,528

 

2,781

(149)

 

4,798

676

 

(140)

(34)

Effect of pension obligations

(33)

169

 

(77)

118

 

39

46

 

5

5

Other fines and penalties

522

3,001

 

92

880

 

294

291

 

129

2,148

Other one-off items

7

(458)

 

5

(258)

 

52

(80)

 

(50)

(119)

EBITDA

118,907

41,051

 

75,574

26,259

 

43,362

13,154

 

1,633

2,349

EBITDA, margin

30%

15%

 

46%

25%

 

16%

8%

 

4%

5%

 

 

 

 

 

 

 

 

 

 

 

 

Mln rubles

Consolidated Results

 

Mining Segment ***

 

Steel Segment***

 

Power Segment***

4Q2021

3Q2021

 

4Q2021

3Q2021

 

4Q2021

3Q2021

 

4Q2021

3Q2021

Profit (loss) attributable to equity shareholders of Mechel PAO

27,488

21,277

 

19,493

18,439

 

4,693

4,707

 

(1,410)

(108)

Add:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortisation

3,193

2,996

 

1,589

1,446

 

1,484

1,434

 

120

116

Foreign exchange loss (gain), net

4

(1,575)

 

253

(17)

 

(251)

(1,558)

 

2

-  

Finance costs

6,279

6,138

 

2,671

2,502

 

3,982

4,109

 

119

190

Finance income

(274)

(56)

 

(557)

(572)

 

(201)

(139)

 

(9)

(8)

Impairment of goodwill and other non-current assets, net and loss on write-off of non-current assets, allowance for expected credit losses, provision (reversal of provision) for doubtful accounts, write-off of trade and other receivables and payables, net and change in provision for inventories at net realisable value

2,069

(523)

 

1,236

(54)

 

(1,104)

(189)

 

1,937

(280)

Net result on the disposal of subsidiaries

(1,130)

-  

 

-  

-  

 

(1,130)

-  

 

-  

-  

Profit (loss) attributable to non-controlling interests

167

767

 

(33)

330

 

107

272

 

93

165

Income tax (benefit) expense

(2,005)

2,472

 

(211)

1,370

 

1,447

1,279

 

(566)

442

Effect of pension obligations

(141)

42

 

(145)

29

 

3

12

 

1

1

Other fines and penalties

(647)

339

 

(155)

78

 

(102)

74

 

40

(4)

Other one-off items

17

41

 

4

1

 

13

40

 

-  

-  

EBITDA

35,020

31,918

 

24,145

23,552

 

8,941

10,041

 

327

514

EBITDA, margin

31%

31%

 

48%

52%

 

12%

15%

 

3%

5%

 

*** including inter-segment operation

Income tax, deferred tax related to the consolidated group of taxpayers are not allocated to segments as they are managed on the group basis

 

 


1

 

 

Attachment B

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

for the year ended December 31, 2021

(All amounts are in millions of Russian rubles, unless stated otherwise)

 

 

 

Year ended
December 31,
2021

 

Year ended
December 31,
2020

 

Year ended
December 31,
2019

Continuing operations

 

 

 

 

 

 

Revenue from contracts with customers

 

402,074

 

265,454

 

287,153

Cost of sales

 

(223,993)

 

(170,605)

 

(183,086)

Gross profit

 

178,081

 

94,849

 

104,067

 

 

 

 

 

 

 

Selling and distribution expenses

 

(54,721)

 

(49,994)

 

(48,432)

Impairment of goodwill and other non-current assets, net

 

(2,899)

 

(3,897)

 

(1,804)

Allowance for expected credit losses

 

(201)

 

(149)

 

(234)

Taxes other than income taxes

 

(3,550)

 

(3,446)

 

(4,517)

Administrative and other operating expenses

 

(16,513)

 

(18,437)

 

(15,568)

Other operating income

 

2,469

 

999

 

688

Total selling, distribution and operating income and (expenses), net

 

(75,415)

 

(74,924)

 

(69,867)

Operating profit

 

102,666

 

19,925

 

34,200

 

 

 

 

 

 

 

Finance income

 

676

 

3,504

 

590

Finance costs

 

(23,371)

 

(25,145)

 

(33,863)

Foreign exchange gain (loss), net

 

7,891

 

(36,388)

 

18,288

Share of (loss) profit of associates, net

 

(7)

 

20

 

28

Other income

 

1,341

 

718

 

228

Other expenses

 

(66)

 

(259)

 

(483)

Total other income and (expense), net

 

(13,536)

 

(57,550)

 

(15,212)

Profit (loss) before tax from continuing operations

 

89,130

 

(37,625)

 

18,988

 

 

 

 

 

 

 

Income tax expense

 

(6,511)

 

(2,528)

 

(7,913)

Profit (loss) from continuing operations

 

82,619

 

(40,153)

 

11,075

Discontinued operations

 

 

 

 

 

 

Profit (loss) after tax from discontinued operations

 

 

41,609

 

(6,790)

Profit

 

82,619

 

1,456

 

4,285

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Equity shareholders of Mechel PAO

 

80,570

 

808

 

2,409

Non-controlling interests

 

2,049

 

648

 

1,876

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

Other comprehensive (loss) income that may be reclassified to profit or loss in subsequent periods, net of tax

 

(152)

 

2,042

 

(1,771)

Exchange differences on translation of foreign operations

 

(152)

 

2,042

 

(1,771)

 

 

 

 

 

 

 

Other comprehensive income (loss) not to be reclassified to profit or loss in subsequent periods, net of tax

 

1,043

 

253

 

(867)

Net (loss) gain on equity instruments designated at fair value through other comprehensive income

 

(27)

 

53

 

Re-measurement of defined benefit plans

 

1,070

 

200

 

(867)

Other comprehensive income (loss), net of tax

 

891

 

2,295

 

(2,638)

Total comprehensive income, net of tax

 

83,510

 

3,751

 

1,647

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Equity shareholders of Mechel PAO

 

81,444

 

3,099

 

(210)

Non-controlling interests

 

2,066

 

652

 

1,857

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Weighted average number of common shares

 

404,776,126

 

412,589,910

 

416,256,510

Earnings per share (Russian rubles per share) attributable to common equity shareholders – basic and diluted

 

199.05

 

1.96

 

5.79

1


2

 

Earnings (loss) per share from continuing operations (Russian rubles per share) – basic and diluted

 

199.05

 

(98.89)

 

22.10

Earnings (loss) per share from discontinued operations (Russian rubles per share) – basic and diluted

 

 

100.85

 

(16.31)

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as of December 31, 2021

(All amounts are in millions of Russian rubles)

 

 

 

December 31,
2021

 

December 31,
2020

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

75,509

 

81,345

Right-of-use assets

 

12,412

 

12,840

Mineral licenses

 

17,741

 

18,458

Goodwill and other intangible assets

 

10,684

 

10,768

Other non-current assets

 

193

 

226

Investments in associates

 

334

 

341

Non-current financial assets

 

731

 

445

Deferred tax assets

 

4,989

 

561

Total non-current assets

 

122,593

 

124,984

Current assets

 

 

 

 

Inventories

 

62,449

 

42,138

Income tax receivables

 

24

 

45

Other current assets

 

10,348

 

8,423

Trade and other receivables

 

24,315

 

16,403

Other current financial assets

 

100

 

141

Cash and cash equivalents

 

17,701

 

1,706

Total current assets

 

114,937

 

68,856

Total assets

 

237,530

 

193,840

 

 

 

 

 

Equity and liabilities

 

 

 

 

Equity

 

 

 

 

Common shares

 

4,163

 

4,163

Preferred shares

 

840

 

840

Treasury shares

 

(907)

 

(907)

Additional paid-in capital

 

23,410

 

23,410

Accumulated other comprehensive income

 

2,265

 

1,391

Accumulated deficit

 

(192,714)

 

(273,186)

Equity attributable to equity shareholders of Mechel PAO

 

(162,943)

 

(244,289)

Non-controlling interests

 

15,665

 

13,618

Total equity

 

(147,278)

 

(230,671)

Non-current liabilities

 

 

 

 

Loans and borrowings

 

100

 

2,201

Lease liabilities

 

3,886

 

3,958

Other non-current financial liabilities

 

1,666

 

1,901

Other non-current liabilities

 

77

 

301

Pension obligations

 

3,974

 

5,232

Provisions

 

4,118

 

4,802

Deferred tax liabilities

 

7,548

 

6,773

Total non-current liabilities

 

21,369

 

25,168

Current liabilities

 

 

 

 

Loans and borrowings

 

283,382

 

314,836

Lease liabilities

 

7,526

 

7,535

Trade and other payables

 

36,278

 

43,783

Other current financial liabilities

 

460

 

324

Income tax payable

 

6,409

 

7,843

Taxes and similar charges payable other than income tax

 

9,966

 

10,969

Advances received

 

14,200

 

6,067

Other current liabilities

 

241

 

1,038

Pension obligations

 

553

 

631

Provisions

 

4,424

 

6,317

Total current liabilities

 

363,439

 

399,343

2


3

 

Total liabilities

 

384,808

 

424,511

Total equity and liabilities

 

237,530

 

193,840

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended December 31, 2021

(All amounts are in millions of Russian rubles)

 

 

 

Year ended December 31,

 

 

2021

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

 

 

Profit (loss) from continuing operations

 

82,619

 

(40,153)

 

11,075

Profit (loss) after tax from discontinued operations

 

 

41,609

 

(6,790)

Profit

 

82,619

 

1,456

 

4,285

Adjustments to reconcile profit to net cash provided by operating activities

 

 

 

 

 

 

Depreciation and amortisation

 

13,357

 

14,818

 

15,176

Foreign exchange (gain) loss, net

 

(7,891)

 

37,765

 

(19,241)

Deferred income tax (benefit) expense

 

(3,658)

 

2,574

 

2,288

Allowance for expected credit losses

 

201

 

149

 

235

Gain on restructuring and forgiveness of trade and other payables and write-off of trade and other payables with expired legal term

 

(1,312)

 

(122)

 

(167)

Write-off of inventories to net realisable value

 

769

 

928

 

1,763

Impairment of goodwill and other non-current assets, net and loss on write-off of non‑current assets

 

3,302

 

4,350

 

2,880

Finance income

 

(676)

 

(3,504)

 

(600)

Finance costs

 

23,371

 

26,853

 

38,830

Provisions for legal claims, income tax and other taxes and other provisions

 

(1,257)

 

24

 

3,630

Gain on sale of discontinued operations

 

 

(45,580)

 

Gain on disposal of a subsidiary

 

(1,130)

 

 

Other

 

(234)

 

(146)

 

203

Changes in working capital items

 

 

 

 

 

 

Trade and other receivables

 

(8,692)

 

(236)

 

1,546

Inventories

 

(24,079)

 

(5,283)

 

(1,511)

Trade and other payables

 

(6,120)

 

1,137

 

4,037

Advances received

 

8,149

 

995

 

650

Taxes payable and other liabilities

 

10,583

 

4,580

 

5,151

Other assets

 

(2,224)

 

(1,474)

 

1,238

 

 

 

 

 

 

 

Income tax paid

 

(11,540)

 

(1,335)

 

(2,735)

Net cash provided by operating activities

 

73,538

 

37,949

 

57,658

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Interest received

 

436

 

129

 

76

Royalty and other proceeds associated with disposal of subsidiaries

 

 

 

17

Proceeds from loans issued and other investments

 

3

 

39

 

313

Proceeds from disposal of the discontinued operations, net of cash disposed of

 

 

88,979

 

Cash disposed of due to disposal of subsidiary

 

(15)

 

 

Proceeds from disposals of property, plant and equipment

 

332

 

119

 

211

Purchases of property, plant and equipment and intangible assets

 

(6,208)

 

(4,883)

 

(6,538)

Net cash (used in) provided by investing activities

 

(5,452)

 

84,383

 

(5,921)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from loans and borrowings, including proceeds from factoring arrangement of nil, RUB 1 million and RUB 214 million for the periods ended December 31, 2021, 2020 and 2019, respectively

 

16,210

 

77,367

 

7,599

3


4

 

Repayment of loans and borrowings, including payments from factoring arrangement of RUB 117 million, RUB 353 million and RUB 2,222 million for the periods ended December 31, 2021, 2020 and 2019, respectively

 

(42,241)

 

(176,883)

 

(20,772)

Repurchase of common shares

 

 

(844)

 

Sale and purchase of non-controlling interest in subsidiaries

 

144

 

169

 

Dividends paid to shareholders of Mechel PAO

 

(98)

 

(292)

 

(1,515)

Dividends paid to non-controlling interests

 

(13)

 

(3)

 

(16)

Interest paid, including fines and penalties

 

(19,403)

 

(22,912)

 

(30,923)

Payment of principal portion of lease liabilities

 

(3,620)

 

(2,660)

 

(2,276)

Sale and leaseback transactions

 

(75)

 

462

 

248

Acquisition of assets under deferred payment terms

 

(95)

 

(508)

 

(341)

Deferred consideration paid for the acquisition of subsidiaries in prior periods

 

 

 

(361)

Net cash used in financing activities

 

(49,191)

 

(126,104)

 

(48,357)

 

 

 

 

 

 

 

Foreign exchange (loss) gain on cash and cash equivalents, net

 

(237)

 

(61)

 

(891)

Changes in allowance for expected credit losses on cash and cash equivalents

 

(19)

 

28

 

(2)

Net increase (decrease) in cash and cash equivalents

 

18,639

 

(3,805)

 

2,487

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,706

 

3,509

 

1,803

Cash and cash equivalents, net of overdrafts at beginning of period

 

(938)

 

2,867

 

380

Cash and cash equivalents at end of period

 

17,701

 

1,706

 

3,509

Cash and cash equivalents, net of overdrafts at end of period

 

17,701

 

(938)

 

2,867

 

 

 

 

 

 

 

 

 

There were certain reclassifications to conform with the current period presentation.

 

4


5

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

 

 

Mechel PAO

 

 

 

By:

Oleg V. Korzhov

 

Name:

Oleg V. Korzhov

Title:

CEO

Date: March 1, 2022

5

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