Mechel Restarts Bluestone Facility - Analyst Blog
29 Januar 2013 - 12:40PM
Zacks
Russian miner Mechel OAO (MTL) announced the
resumption of operations at some of its Bluestone mining facilities
in West Virginia, U.S. The decision to resume operations at the
mine was based on the decline in coal inventories in the mine. The
company resumed open pit mining at the Justice and Dynamic Energy
complexes. The complexes are expected to produce about 135,000 tons
a month.
Bluestone is the mining division of Mechel and production at the
mine was temporarily suspended in Oct 2012 due to an accumulation
of coal inventories. Mechel stated that it will resume mining at
other facilities when market conditions improve.
Last month, Mechel announced that it will discontinue production at
its Southern Urals Nickel Plant OAO owing to persistent slowdown in
demand for nickel and bleak outlook for its recovery in the near
future.
The decision of halting production was taken to minimize losses.
The company will comply with all the regulations that are set forth
by the Russian Federation's law for the shutdown.
Mechel released its third-quarter 2012 results in Dec 12. The
company posted consolidated net income of $54.9 million for the
quarter compared with $25.7 million in the year-ago quarter,
representing a roughly 114% surge. Revenues for the quarter came in
at roughly $2.71 billion, down 15.4% from $3.21 billion in the
year-ago period.
The company registered an operating income of $126.7 million in
the quarter compared with $529.5 million a year ago, leading to a
contraction in operating margin. Adjusted earnings before interest,
taxes, depreciation and amortization (EBITDA) declined 44.7% year
over year to $374.8 million in the quarter.
Mechel remains focused on improving its core divisions, such as
mining and full-cycle steelmaking, and has adopted several measures
to cut costs and increase sales. Its cost containment initiatives
led to marked improvement in its bottom line in the third
quarter.
Mechel currently retains a short-term Zacks Rank #4 (Sell).
Other companies in the steel industry with favorable Zacks Ranks
are Gibraltar Industries Inc. (ROCK),
POSCO (PKX) and ArcelorMittal South
Africa (AMSIY). While both Gibraltar and POSCO hold a
Zacks Rank #1 (Strong Buy), ArcelorMittal South Africa holds a
Zacks Rank #2 (Buy).
(AMSIY): ETF Research Reports
MECHEL OAO ADS (MTL): Free Stock Analysis Report
POSCO-ADR (PKX): Free Stock Analysis Report
GIBRALTAR INDUS (ROCK): Free Stock Analysis Report
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