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Norilsk Nickel IFRS net profit grows 47% to $2.5 bln in 2016

Norilsk Nickel
Norilsk Nickel   Lower metal prices

Norilsk Nickel reports IFRS financial results for the full year ended December 31, 2016.

Consolidated revenue decreased 3% year-on-year to $8.3 billion on the back of lower realized prices of the company’s metal basket (down 13% y-o-y).

Lower metal prices and a one-off decrease of production volumes owing to the downstream reconfiguration were partly offset by the sales of metal stock accumulated in 4Q2015.

EBITDA amounted to $3.9 billion, down 9% y-o-y, posting a global mining industry leading EBITDA margin of 47%.

Net profit increased 47% y-o-y to $2.5 billion mainly due to appreciation of RUB as of the end of the reported period.

CAPEX was practically unchanged y-o-y (up 2%) at $1.7 billion and was in line with the average capex level for the last 3 years.

Major investments in 2016 included projects related to the shutdown of Nickel Plant, capacity expansion and modernization of Talnakh Concentrator and Nadezhda Plant as well as an active construction phase of the Bystrinsky (Chita) project.

Normalized net working capital decreased 28% y-o-y to $0.7 billion (or to $0.4 billion including the one-off increase of short-term payables resulting from concentrate purchase from Rostec) driven mainly by the saleable metal inventory release.

Free cash flow amounted to $1.6 billion with FCF/revenue ratio reaching the global mining industry-leading 19%.

Balance sheet remained conservative with net debt/EBITDA ratio of 1.2x as of December 31, 2016. Solid financial standing of Norilsk Nickel is confirmed by investment grade credit ratings from Standard & Poor’s and Fitch credit rating agencies.

The company remained one of the highest dividend-yielding stocks in the global mining industry. The company paid interim dividend for 9M 2016 of a total USD1.2 billion or $7.4 per share.


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