“The decline in nickel and palladium costs, logistical difficulties within the Crimson Sea, and elevated challenges with cross-border funds have had a particularly unfavourable influence on our income, profitability, and free money movement,” Nornickel CEO Vladimir Potanin mentioned.
The corporate mentioned maritime site visitors restrictions within the Crimson Sea as a result of missile and drone assaults by Yemen’s Houthi militants led to accumulation of nickel and copper shares and a decline in Nornickel’s gross sales within the first half of the 12 months.
Nornickel makes use of the Crimson Sea path to ship metals, together with to Asian markets.
Nornickel mentioned common nickel worth on the London Steel Alternate fell by 28% within the first half of 2024, and the miner forecast a surplus 100,000 tons of nickel within the international markets in 2024/25.
“Sadly, the hostile exterior circumstances that Norilsk Nickel confronted final 12 months continued to place strain on our enterprise within the first half of 2024,” Potanin added.
Nornickel’s income fell 22% to $5.6 billion within the first half, whereas its core earnings decreased 30% to $2.35 billion.
The corporate additionally trimmed its capital expenditure forecast for 2024 to $3 billion from its prior view of between $3 billion and $3.20 billion.
Nornickel mentioned the share of Asian markets in its exports stood at 52% for the six-month interval.
“Amid circumstances of the ‘excellent storm’ created by excessive rates of interest on debt devices and restricted entry to capital markets, our absolute priorities are sustaining the monetary stability of Norilsk Nickel,” Potanin mentioned.
The corporate’s free money movement fell 61% to $525 million within the first half of the 12 months.
Final month, Nornickel, the world’s largest producer of palladium and a significant producer of refined nickel, reported a 1% drop in nickel output for the primary half, however caught to its 2024 manufacturing forecast for each the metals.
Potanin mentioned that after the repaired furnace at Nornickel’s flagship Nadezhda plant went again into operation this month, the corporate is now forward of its manufacturing schedule.
Nornickel isn’t topic to direct Western sanctions, however some Western corporations are avoiding coping with it, hampering its operations.
America on Friday imposed sanctions on a number of Nornickel subsidiaries which aren’t concerned in manufacturing in addition to on the Bystrinsky copper and gold plant which Nornickel controls. Nornickel declined to touch upon new sanctions.
(By Anastasia Lyrchikova and Gleb Bryanski; Modifying by Shounak Dasgupta and Jonathan Oatis)