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Nornickel's Revenue Grew By 6.7% In The First Half Of The Year

Nornickel's Revenue Grew By 6.7% In The First Half Of The Year

Revenue of PJSC MMC Norilsk Nickel under IFRS in the first half of 2020 increased by 6.7% compared to the same period in 2019 - to $6.71 billion, according to the company's report.

This result is just below the market's consensus forecast, which called for revenue growth of 7.5% to $6.76 billion.

Revenue from sales of metals was $6.445 billion compared to $5.94 billion a year ago. The driver was palladium, which, thanks to a 30% jump in prices compared to last year, brought Norilsk Nickel $3.075 billion in revenue against $2.374 billion in the same period in 2019 and compensated for a 16% drop in revenues from Nickel, platinum, and copper sales.

NorNickel's EBITDA in the first half of the year was $1.8 billion (down 51% from the 2019 data) due to the recognition of expenses on environmental reserves for $2.1 billion, the company said on Tuesday.

NorNickel believes that within the framework of the working group (created by the Ministry of natural resources), there is a possibility of out-of-court settlement of issues regarding the amount of damage, the procedure and terms of its compensation," the press release reads.

The ratio of net debt to EBITDA increased to 1.2 x as of June 30, 2020.

Consolidated revenue increased by 7% year-on-year to $6.7 billion, due to the growth of exchange prices for palladium, rhodium, and gold, as well as the planned increase in production at the Bystrinsky GOK. This result is just below the market's consensus forecast, which called for revenue growth of 7.5% to $6.76 billion.

Free cash flow, which does not include reserves, increased by 21% to $2.7 billion.

NorNickel's CAPEX increased by 10% in the first half of the year to $551 million.

The CAPEX target for the year is up to $2 billion. In 2021, CAPEX is expected to grow to $3-3. 4 billion, and then until 2025, it will remain at the average annual level of $3.5-4 billion.

Shares of Norilsk Nickel, which showed an increase of more than 1% during trading on the Moscow exchange on Tuesday afternoon, went down (-0.46%, to 20 thousand 378 rubles apiece) after the publication of the financial report.