Norilsk profit hit on metals price collapse
Norilsk Nickel, the world’s largest nickel miner, yesterday said lower metal prices pushed first-half profit down sharply, but the results beat analyst forecasts.
Net profit attributable to shareholders fell 84 per cent year-on-year to $419m (£256m). Mining companies around the world have struggled over the past year as falling industrial demand caused by the global economic recession sent metal prices tumbling.
BHP Billiton, the world’s biggest miner, reported net profit for the year to end June down more than 60 per cent, while world number two Rio Tinto posted a 64 per cent slide in first-half profit.
Norilsk was forced to cut back production in the first half — halting its entire Australian operation — in a bid to cut costs during the downturn. Steel-making ingredient Nickel, traded on the London Metal Exchange, has risen 61 per cent since the start of 2009, hitting year highs in August, but is still well below levels seen the previous year. Some analysts have warned it could be heading for another fall due to rising inventories.
Norilsk’s adjusted earnings fell to $1.4bn, while revenues slipped 51 per cent to $4.08bn, in line with expectations of $4.11bn. “Revenue from metal sales declined by 54 per cent due to the global commodity market prices being significantly below prior year levels,” Norilsk said in a statement.