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 September 11, 2015 - 6:00 AM EDT
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Mechel Reports the 1H 2015 Financial Results

Revenue amounted to $2.3 billion

Consolidated EBITDA(a)* amounted to $390 million

Net loss attributable to shareholders of Mechel OAO amounted to $239 million

MOSCOW, Sept. 11, 2015 (GLOBE NEWSWIRE) -- Mechel OAO (MICEX:MTLR) (NYSE:MTL), a leading Russian mining and steel group, announces financial results for the 1H 2015.

Mechel OAO's Chief Executive Officer Oleg Korzhov commented: "The company has confidently passed through the first half of the year. In comparison with the same period last year we have increased coal mining and pig iron and steel production. Financial results for this half-a-year period are also good. Despite a decrease in revenue, we have demonstrated a significant increase in EBITDA and EBITDA margin, with operational profit increasing multifold and our debt down by nearly a quarter as compared to the first half of last year. In 2Q 2015, the company has demonstrated net profit for the first time since 2012.

"Our investment projects were developing successfully. Chelyabinsk Metallurgical Plant's rails have passed certification for supplies to Russian Railways OAO. The Elga deposit continues to increase its mining volumes. Comparing to the same period last year, mining volumes have increased by more than eight times, with the quarter-on-quarter rise at more than 20%.

"At the same time, the company's chief efforts were focused on restructuring its debt portfolio. Stable operational and financial results, as well as the ruble's devaluation, lent significant support to the negotiations. As of now, we have reached major progress. Negotiations with our largest lenders ― Gazprombank and VTB Bank ― were concluded by signing agreements. Negotiations with other lenders, including Sberbank, continue and are conducted in a constructive way. We may expect that restructuring will be complete within a few months and the company will move to a new and more stable stage of its development."

Consolidated Results For The 1H 2015
 
US$ mln. 1H'15 1H'14 % 2Q'15 1Q'15 %
Revenue from external customers 2,272 3,436 -34% 1,159 1,113 4%
Adjusted operating income 260 47 453% 108 152 -29%
EBITDA (a) 390 262 49% 179 211 -15%
EBITDA (a), margin 17.2% 7.6%   15.4% 19.0%  
Net (loss) / income attributable to shareholders of Mechel OAO (239) (648) -63% 34 (273) -112%
Adjusted net loss (251) (287) -13% (152) (99) 54%
Net debt 6,974 9,053 -23% 6,974 6,822 2%
Trade working capital (815) 68 -1.299% (815) (623) 31%
  • Revenue decrease compared to the first half of 2014 was largely due to ruble devaluation as most of the Group's revenue was ruble denominated. At the same time quarter-on-quarter revenue has increased.
  • The decline in dollar denominated production costs enabled us to increase EBITDA(a) by half if compared to the same period last year. EBITDA(a) margin over this half-a-year period went up by 17%.
  • The significant decrease in debt compared to the first half of 2014 was as well caused by ruble devaluation. The credit portfolio structure has not changed significantly quarter-on-quarter. The two-percent growth of net debt was largely due to currency rate volatility.

_______________________________

*Please find the calculation of the EBITDA(a) and other measures used here and hereafter in Attachment A

Mining Segment

Mechel Mining Management Company OOO's Chief Executive Officer Pavel Shtark noted:

"Due to a weaker demand for the division's products on the export markets and a further decline in global metallurgical coal prices, our coal sales structure was altered. If in the first quarter the share of exports in our revenue was 80%, in the second quarter it slumped to some 70%. The decline in exports was compensated for by the growth of domestic supplies, including those to the Group's own facilities. For example, we substituted some coal grades we used to buy from third parties for our coke and chemical plants with coal mined at the Elga deposit. At the same time, we increased coal mining volumes, retained coking coal concentrate sales on a stable level quarter-on-quarter, and even increased sales of other types of coal.

"Despite the fact that coal prices in the second quarter slumped to another historical minimum and production costs grew, particularly as the ruble strengthened in the second quarter, we did not allow a significant decrease of our financial results quarter-on-quarter. If we compare this half-a-year period results with the same period last year, however, we shall see that EBITDA has gone up a quarter, while EBITDA margin nearly doubled. Separately, I would like to note that as a result of this year's second quarter, the segment demonstrated a net profit."

 
US$ mln 1H'15 1H'14 % 2Q'15 1Q'15 %
Revenue from external customers 753 1,115 -32% 363 390 -7%
Revenue intersegment 232 302 -23% 131 101 30%
EBITDA(a) 203 164 24% 97 106 -8%
EBITDA (a), margin(4) 20.6% 11.6%   19.6% 21.6%  

Steel Segment

Mechel-Steel Management Company OOO's Chief Executive Officer Vladimir Tytsky noted:

"The first two quarters of this year were successful for our division in terms of both operational and financial results. The 1H2015 operational results exceeded those of the same period last year. Sales of steel products in the second quarter increased quarter-on-quarter on the back of a seasonal growth in demand from construction companies and the engineering industry as well as the increased competitiveness of certain types of products on foreign markets as the ruble weakened. EBITDA in 1H2015 was more than 2.5 times higher than in the same period last year. The quarter-on-quarter decrease of EBITDA was due to a growth of operation costs as incoming commodities became more expensive, as well as some strengthening of the ruble.

"In the second quarter, we have successfully completed certification of our rails produced at Chelyabinsk Metallurgical Plant's universal rolling mill for Russian Railways. We are currently in talks with Russian Railways and expect to sign an agreement on rail supplies shortly.

"Due to a constant increase in the share of high value-added products as the universal rolling mill's load increases, the segment will retain a high level of capacity utilization of its facilities, stable sales and good financial results."

 
US$ mln 1H'15 1H'14 % 2Q'15 1Q'15 %
Revenue
from external customers
1,283 1,956 --34% 682 601 13%
Revenue
intersegment
84 127 -34% 44 40 10%
EBITDA(a) 188 74 154% 83 105 -21%
EBITDA(a), margin 13.8% 3.6%   11.4% 16.4%  

Power Segment

Mechel-Energo OOO's Chief Executive Officer Pyotr Pashnin noted:

"In the first half of this year, we increased electricity production by 22% as compared to the same period last year. This was due to a more stable operation of Southern Kuzbass Power Plant after repairs conducted in 2014. At the same time, in the second quarter we saw a traditional seasonal slump in both operational and financial results quarter-on-quarter as the heating season ended and we were implementing routine maintenance works for the next high-load period."

 
US$ mln 1H'15 1H'14 % 2Q'15 1Q'15 %
Revenue
from external customers
236 366 -36% 114 122 -7%
Revenue
intersegment
130 195 -33% 64 66 -3%
EBITDA(a) 7 21 -67% 0,1 6 -98%
EBITDA(a), margin(4) 1.9% 3.7%   0.1% 3.2%  

The management of Mechel will host a conference call today at 18:00 p.m. Moscow time (4:00 p.m. London time, 11 a.m. New York time) to review Mechel's financial results and comment on current operations. The call may be accessed via the Internet at http://www.mechel.com, under the Investor Relations section.

Mechel is one of the leading Russian companies. Its business includes three segments: mining, steel and power. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat and electric power. Mechel products are marketed domestically and internationally.

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 1H 2015 Earnings Press Release

Attachment A

Non-GAAP financial measures. This press release includes financial information prepared in accordance with accounting principles generally accepted in the United States of America, or US GAAP, as well as other financial measures referred to as non-GAAP. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with US GAAP.

Adjusted EBITDA represents earnings before Depreciation, depletion and amortization, Foreign exchange gain / (loss), Loss from discontinued operations, Gain / (loss) from remeasurement of contingent liabilities at fair value, Interest expense, Interest income, Net result on the disposal of non-current assets, Impairment of goodwill and long-lived assets, Provision for amounts due from related parties, Result of disposed companies (incl. the result from their disposal), Amount attributable to noncontrolling interests, Income taxes and Other one-off items. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of our net revenues. Our adjusted EBITDA may not be similar to EBITDA measures of other companies. Adjusted EBITDA is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. 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 interest, depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived 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.

Adjusted net income / (loss) represents net income / (loss) before Loss from discontinued operations, Result of disposed companies, Foreign exchange gain / (loss), Impairment of goodwill and long-lived assets and Provision for the amounts due from related parties, including the effect on income tax and amounts attributable to noncontrolling interests and Other one-off items. Our adjusted net income / (loss) may not be similar to adjusted net income / (loss) measures of other companies. Adjusted net income / (loss) is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that our adjusted net income / (loss) provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations. While impairment of long-lived assets and goodwill and provision for the amounts due from related parties are considered operating costs under generally accepted accounting principles, these expenses represent the non-cash current period allocation of costs associated with assets acquired or constructed in prior periods. Our adjusted net income / (loss) calculation is 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 calculations of Net debt, excluding finance lease liabilities, and trade working capital are presented below:

   
US $ mln 30.06.2015 30.06.2014 30.06.2015 31.03.2015
Short-term borrowings and current portion of long-term debt 6,742 8,192 6,742 6,470
Long-term debt, net of current portion 16 454 16 161
Derivative instruments -- 58 -- --
less Cash and cash equivalents (45) (68) (45) (63)
Net debt 6,713 8,636 6,713 6,568
Finance lease liabilities, current portion 261 395 261 254
Finance lease liabilities, non-current portion -- 22 -- --
Net debt 6,974 9,053 6,974 6,822
   
US $ mln 30.06.2015 30.06.2014 30.06.2015 31.03.2015
Accounts receivable, net of allowance for doubtful accounts 328 543 328 361
Due from related parties, net of allowance 9 51 9 10
Inventories 586 1,041 586 590
Prepayments and other current assets 230 372 230 241
Trade current assets 1,153 2,007 1,153 1,202
Trade payable to vendors of goods and services 523 977 523 542
Advances received 76 139 76 59
Accrued expenses and other current liabilities 1,073 391 1,073 988
Taxes and social charges payable 279 398 279 224
Due to related parties 17 34 17 12
Trade current liabilities 1,968 1,939 1,968 1,825
Trade working capital (815) 68 (815) (623)

Adjusted EBITDA can be reconciled to our consolidated statements of operations as follows:

  Consolidated results Mining segment**  Steel segment** Power segment**
US $ thousand  6m 2015  6m 2014  6m 2015  6m 2014  6m 2015  6m 2014 6m 2015 6m 2014
Net loss (239,238) (647,950) (92,445) (432,272) (131,199) (215,584) (8,193) (2,883)
Add:                
Depreciation, depletion and amortization 123,565 200,379 76,027 122,568 44,188 73,260 3,349 4,552
Foreign exchange (gain) / loss (35,382) 183,342 (45,149) 121,654 10,897 62,710 (1,131) (1,021)
Interest expense 491,634 376,744 246,516 193,157 230,617 181,959 21,319 18,380
Interest income (1,282) (1,222) (5,437) (9,912) (2,192) (7,452) (471) (607)
Net result on the disposal of non-current assets, impairment of goodwill and long-lived assets and provision for amounts due from related parties 1,569 10,428 1,969 (340) (393) 10,712 (7) 56
Loss / (income) from discontinued operations, net of income tax 3,377 11,312 1,668 19,597 1,448 (9,708) 262 1,424
Net gain / (loss) attributable to noncontrolling interests 13,956 1,888 6,908 (1,866) 7,892 1,818 (844) 1,936
Income taxes 11,780 102,999 12,532 129,653 6,958 (26,033) (7,708) (622)
Other one-off items 20,132 23,826 1 21,439 20,131 2,384 -- 3
Adjusted EBITDA 390,111 261,746 202,590 163,678 188,347 74,066 6,576 21,218
Adjusted EBITDA, margin 17% 8% 21% 12% 14% 4% 2% 4%
 
US $ thousand 6m 2015 6m 2014 6m 2015 6m 2014 6m 2015 6m 2014 6m 2015 6m 2014
Net loss (239,238) (647,950) (92,445) (432,272) (131,199) (215,584) (8,193) (2,883)
Add:                
Provision for amounts due from related parties 231 8,650 (188) 623 427 7,979 (8) 48
Loss / (income) from discontinued operations, net of income tax 3,377 11,312 1,668 19,597 1,448 (9,708) 262 1,424
Effect on net (loss) / income attributable to noncontrolling interests (358) 2,929 (1) -- (357) 2,929 -- --
Foreign exchange (gain) / loss (35,382) 183,342 (45,149) 121,654 10,897 62,710 (1,131) (1,021)
Accrual of income taxes for 2009-2010 -- 131,250 -- 131,250 -- -- -- --
Other one-off items 20,132 23,826 1 21,439 20,131 2,384 -- 3
Adjusted net loss, net of income tax (251,238) (286,641) (136,114) (137,709) (98,653) (149,290) (9,070) (2,429)
Operating income / (loss)  238,054 15,153 121,933 5,264 120,399 (10,439) 3,124 17,539
Add:                
Provision for amounts due from related parties 231 8,650 (188) 623 427 7,979 (8) 48
Loss on write-off of property, plant and equipment 1,680 1,508 620 146 1,060 1,361 -- --
Other one-off items 20,127 21,439 -- 21,439 20,127 -- -- --
Adjusted operating income / (loss) 260,092 46,750 122,365 27,472 142,013 (1,099) 3,116 17,587
                 
** including intersegment operations                
  Consolidated results Mining segment** Steel segment** Power segment**
US $ thousand  2Q 2015  1Q 2015  2Q 2015  1Q 2015  2Q 2015  1Q 2015  2Q 2015  1Q 2015
Net income / (loss) 33,969 (273,207) 52,631 (145,070) (9,181) (122,022) (9,050) 857
Add:                
Depreciation, depletion and amortization 65,170 58,395 40,475 35,552 22,905 21,283 1,790 1,559
Foreign exchange (gain) / loss (189,078) 153,696 (141,705) 96,557 (47,678) 58,575 305 (1,436)
Interest expense 235,473 256,161 115,881 130,635 112,599 118,018 9,970 11,349
Interest income (563) (719) (2,114) (3,323) (1,166) (1,026) (260) (211)
Net result on the disposal of non-current assets, impairment of goodwill and long-lived assets and provision for amounts due from related parties (239) 1,808 (1,085) 3,054 853 (1,246) (8) 1
Loss / (income) from discontinued operations, net of income tax 3,359 18 1,081 587 2,180 (732) 99 163
Net gain / (loss) attributable to noncontrolling interests 6,349 7,607 5,233 1,675 1,580 6,312 (464) (380)
Income taxes 24,320 (12,540) 26,038 (13,508) 518 6,441 (2,235) (5,473)
Other one-off items 5 20,127 -- -- 4 20,127 -- --
Adjusted EBITDA 178,765 211,346 96,435 106,159 82,614 105,730 147 6,429
Adjusted EBITDA, margin 15% 19% 20% 22% 11% 16% 0% 3%
 
US $ thousand 2Q 2015 1Q 2015 2Q 2015 1Q 2015 2Q 2015 1Q 2015 2Q 2015 1Q 2015
Net income / (loss) 33,969 (273,207) 52,631 (145,070) (9,181) (122,022) (9,050) 857
Add:                
Provision for amounts due from related parties (191) 422 (187) (1) 4 423 (8) --
Loss / (income) from discontinued operations, net of income tax 3,359 18 1,081 587 2,180 (732) 99 163
Effect on net income / (loss) attributable to noncontrolling interests 43 (400) -- 1 43 (401) -- --
Foreign exchange (gain) / loss (189,078) 153,696 (141,705) 96,557 (47,678) 58,575 305 (1,436)
Other one-off items 5 20,127 -- -- 4 20,127 -- --
Adjusted net loss, net of income tax (151,893) (99,344) (88,181) (47,926) (54,628) (44,030) (8,654) (416)
Operating income / (loss)  107,332 130,723 54,045 67,888 55,360 65,040 (1,644) 4,768
Add:                
Provision for amounts due from related parties (191) 422 (187) (1) 4 423 (8) --
Loss on write-off of property, plant and equipment 993 687 97 522 896 164 -- --
Other one-off items -- 20,127 -- -- -- 20,127 -- --
Adjusted operating income / (loss)  108,134 151,959 53,955 68,409 56,260 85,754 (1,652) 4,768
                 
** including intersegment operation                
     
Consolidated Balance Sheets    
(in thousands of U.S. dollars, except share amounts)    
   June 30, 2015 December 31,
   (unaudited) 2014
ASSETS    
Cash and cash equivalents $ 45,052 $ 70,800
Accounts receivable, net of allowance for doubtful accounts of $62,646 as of June 30, 2015 and $68,493 as of December 31, 2014
 
328,096 330,371
Due from related parties, net of allowance of $1,465,638 as of June 30, 2015 and $1,458,296 as of December 31, 2014 9,219 9,303
Inventories 585,878 640,671
Deferred income taxes 100,921 91,223
Current assets of discontinued operations -- 151,602
Prepayments and other current assets 230,065 238,314
Total current assets 1,299,231 1,532,284
     
Long-term investments in related parties 6,428 6,142
Other long-term investments 4,277 4,060
Property, plant and equipment, net 3,980,340 3,944,427
Mineral licenses, net 715,124 719,951
Other non-current assets 27,467 30,453
Deferred income taxes 49,793 72,966
Goodwill 408,439 403,207
Total assets 6,491,099 6,713,490
     
LIABILITIES AND EQUITY    
Short-term borrowings and current portion of long-term debt 6,742,186 6,678,549
Accounts payable and accrued expenses:    
Trade payable to vendors of goods and services 523,445 537,004
Advances received 75,716 81,599
Accrued expenses and other current liabilities 1,073,406 811,345
Taxes and social charges payable 279,007 215,251
Unrecognized income tax benefits 17,769 31,444
Due to related parties 16,904 15,494
Asset retirement obligations, current portion 6,969 3,478
Deferred income taxes 5,863 7,893
Current liabilities of discontinued operations -- 150,033
Pension obligations, current portion 19,172 18,656
Dividends payable 1,911 1,843
Finance lease liabilities, current portion 260,851 270,980
Total current liabilities 9,023,199 8,823,569
     
Long-term debt, net of current portion 15,947 166,532
Asset retirement obligations, net of current portion 44,577 43,712
Pension obligations, net of current portion 60,372 60,222
Deferred income taxes 185,950 179,987
Finance lease liabilities, net of current portion 330 2,813
Due to related parties 39 38
Other long-term liabilities 3,455 81,288
     
EQUITY    
Common shares (10 Russian rubles par value; 497,969,086 shares authorized, 416,270,745 shares issued and outstanding
as of June 30, 2015 and December 31, 2014)
133,507 133,507
Preferred shares (10 Russian rubles par value; 138,756,915 shares authorized, 83,254,149 shares issued and outstanding
as of June 30, 2015 and December 31, 2014)
25,314 25,314
Additional paid-in capital 834,172 834,136
Accumulated other comprehensive income 1,009,710 972,381
Accumulated deficit (5,015,240) (4,763,413)
Equity attributable to shareholders of Mechel OAO (3,012,537) (2,798,075)
Noncontrolling interests 169,767 153,404
Total equity (2,842,770) (2,644,671)
Total liabilities and equity 6,491,099 6,713,490
     

 

Consolidated Statements of Operations and Comprehensive Income (Loss)    
(in thousands of U.S. dollars) 6 months ended June 30,
  2015 2014
  (unaudited) (unaudited)
Revenue, net (including related party amounts of $51,622 and $54,755 during 6 months 2015 and 2014, respectively) $ 2,271,719 $ 3,436,299
Cost of goods sold (including related party amounts of $30,341 and $66,115 during 6 months 2015 and 2014, respectively) (1,324,154) (2,254,307)
Gross profit 947,565 1,181,992
     
Selling, distribution and operating expenses:    
Selling and distribution expenses (487,974) (812,991)
Taxes other than income tax (49,379) (99,039)
Accretion expense (3,598) (2,681)
Loss on write-off of property, plant and equipment (1,680) (1,508)
Provision for amounts due from related parties (231) (8,650)
Provision for doubtful accounts (19,659) (30,081)
General, administrative and other operating expenses, net (146,990) (211,889)
Total selling, distribution and operating expenses, net (709,511) (1,166,839)
Operating income 238,054 15,153
     
Other income and (expense):    
Income from equity investments 205 107
Interest income 1,282 1,222
Interest expense (491,634) (376,744)
Foreign exchange gain (loss) 35,382 (183,342)
Other income (expenses), net 6,587 11,854
Total other income and (expense), net (448,178) (546,903)
Loss from continuing operations, before income tax (210,124) (531,751)
     
Income tax expense (11,781) (102,998)
Net loss from continuing operations (221,905) (634,749)
Loss from discontinued operations, net of income tax (3,377) (11,313)
Net loss (225,282) (646,062)
Less: Net income attributable to noncontrolling interests  (13,956) (1,888)
Net loss attributable to shareholders of Mechel OAO (239,238) (647,950)
Less: Dividends on preferred shares (75) (124)
Net loss attributable to common shareholders of Mechel OAO (239,313) (648,074)
     
Net loss (225,282) (646,062)
Currency translation adjustment 27,658 (29,806)
Change in pension benefit obligation (522) (1,176)
Adjustment of available-for-sale securities 137 286
Comprehensive loss (198,009) (676,758)
Comprehensive (loss) income attributable to noncontrolling interests (16,414) 5,581
Comprehensive loss attributable to shareholders of Mechel OAO (214,423) (671,177)
     
Consolidated Statements of Cash Flows    
(in thousands of U.S. dollars) 6 months ended June 30,
  2015 2014
  (unaudited) (unaudited)
Cash Flows from Operating Activities    
Net loss $ (225,282) $ (646,062)
Loss from discontinued operations, net of income tax 3,377 11,313
Net loss from continuing operations (221,905) (634,749)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:    
Depreciation 109,365 174,498
Depletion and amortization 14,200 25,881
Foreign exchange (gain) loss (35,382) 183,342
Deferred income taxes 16,523 (25,015)
Allowance for doubtful accounts 19,659 30,081
Change in inventory reserves 9,830 2
Accretion expense 3,598 2,681
Loss on write-off of property, plant and equipment 1,680 1,508
Income from equity investments (205) (107)
Allowance for amounts due from related parties 231 8,650
Non-cash interest on pension liabilities 2,027 3,919
(Gain) loss on sale of property, plant and equipment (366) 1,265
Gain on sale of investments -- (14,822)
Gain on accounts payable with expired legal term (2,194) (359)
Gain on forgiveness of fines and penalties (5) (13)
Amortization of loan origination fee 13,593 31,469
Pension service cost, amortization of prior service cost and actuarial (gain) loss, other expenses 4,642 2,328
Other 6,628 --
Changes in working capital items:    
Accounts receivable (1,945) 11,109
Inventories 44,628 317,079
Trade payable to vendors of goods and services (3,648) 102,690
Advances received (2,179) 10,426
Accrued taxes and other liabilities 227,487 301,687
Settlements with related parties 921 (50,751)
Other current assets (2,925) 32,741
Unrecognized income tax benefits (10,345) (28,913)
Net operating cash flows of discontinued operations (2,893) (10,882)
Net cash provided by operating activities 191,020 475,745
     
Cash Flows from Investing Activities    
Acquisition of DEMP, less cash acquired (40,115) (43,303)
Proceeds from disposal of securities -- 15,599
Loans issued and other investments (1,208) (2)
Proceeds from disposal of TPP Rousse, less cash disposed of 1,087 1,393
Proceeds from disposal of Invicta, less cash disposed of -- 190
Proceeds from disposal of Bluestone, less cash disposed of 1,502 --
Proceeds from loans issued 274 1,326
Proceeds from disposals of property, plant and equipment 4,242 5,610
Purchases of property, plant and equipment (91,487) (274,444)
Net investing cash flows of discontinued operations -- 59
Net cash used in investing activities (125,705) (293,572)
     
Cash Flows from Financing Activities    
Proceeds from borrowings 40,134 1,721,332
Repayment of borrowings (123,958) (2,017,504)
Dividends paid -- (4)
Dividends paid to noncontrolling interest (33) (121)
Acquisition of noncontrolling interest in subsidiaries (7) (35,821)
Repayment of obligations under finance lease (15,141) (32,434)
Net financing cash flows of discontinued operations -- (1,503)
Net cash used in financing activities (99,005) (366,055)
     
Effect of exchange rate changes on cash and cash equivalents 6,325 (21,683)
     
Net decrease in cash and cash equivalents (27,364) (205,565)
     
Cash and cash equivalents at beginning of period 72,416 274,539
Cash and cash equivalents at end of period 45,052 68,974
CONTACT: Alexey Lukashov
         Director of Investor Relations
         Mechel OAO
         Phone: 7-495-221-88-88
         Fax: 7-495-221-88-00
         alexey.lukashov@mechel.com

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Source: GlobeNewswire (September 11, 2015 - 6:00 AM EDT)

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