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SUEK H1 Results Hit by COVID19

Coal News - Published on Mon, 20 Jul 2020

Image Source: SUEK Coronavirus COVID19
Russian coal miner JSC SUEK announced that its revenue totalled USD 3,327 million in H1 of 2020, a 16% decrease year-on-year amidst declining global coal prices and coal sales, EBITDA decreased by 9% year-on-year to USD 1,065 million and net profit amounted to USD 132 million, SUEK CEO Mr Stepan Solzhenitsyn said “The COVID-19 pandemic caused a general decline in industrial production worldwide, affecting, among others, the global coal market. Nevertheless, SUEK's product and market diversification strategy and rigorous cost control have enabled the Company to generate a positive cash flow and fulfil our financial and social obligations. Our employees have managed to ensure the uninterrupted operation of our coal mines, washing plants, ports and our thermal power plants supplying heat and electricity to more than 5 million people in seven regions of Russia. We have saved jobs and continue to provide help to the regions in this challenging epidemiological situation."

In the first six months of 2020, the Company continued investment projects at the Krasnoyarskaya CHPP-1 and 3 and Tom-Usinskaya GRES as part of the thermal power modernisation programme as well as the efforts to replace old standalone boiler facilities, aimed at boosting the efficiency of heat and electricity cogeneration and at improving environmental performance. In addition, in June a flotation unit was commissioned at the Kirov washing plant, allowing for increased production of high-quality coal with a calorific value of more than 6,600 kcal per kg.

In the first half of the year, the coal export market was affected by the COVID-19 pandemic, which caused a global economic recession and reduced electricity consumption and energy demand. Adverse market conditions brought down key coal price benchmarks by 30% year-on-year.

SUEK's Coal Segment external revenue declined by 25% compared to 1H 2019, to USD 2,038 million, as a result of falling global prices and a 6% reduction in international sales volume due to the negative market environment. The reduction in the domestic market supply was caused by a decrease in the generation of coal-fired stations mainly to the warm winter along with increased output of hydroelectric stations.

Coal mining rose by 2% year-on-year to 52.2 million tonnes with significant underground mining growth following a major equipment upgrade in previous years. Coal washing output grew by 11% to 22.6 million tonnes, which supported SUEK's sales of hard coal with high calorific value into margin-attractive market segments.

Key financial and operational figures
Heading1H 20201H 2019YoY
REVENUE, $M3,3273,960-16%
NET PROFIT, $M132551-76%
OPERATING CASH FLOW, $M9501,172-19%
CAPEX, $M50639129%
COAL PRODUCTION, MT52.2512%
COAL SALES, MT51.759.1-13%
- INTERNATIONAL COAL SALES2627.8-6%
- DOMESTIC COAL SALES25.731.3-18%
INCL. INTRAGROUP COAL SALES14.918.1-18%
POWER CAPACITY SALES, GW13.89.250%
ELECTRICITY OUTPUT, BILLION KWH31.625.922%
HEAT OUTPUT, MILLION GCAL2224.2-9%
 

Source :

Posted By : Yogender Pancholi on Mon, 20 Jul 2020
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