B&E | PJSC UMCC Reported Net Income at UAH 678 mn

PJSC United Mining and Chemical Company reported net income in 2016 at UAH 677.7 mn, an increase of 7% or UAH 45.9 mn over the previous period.

PJSC United Mining and Chemical Company reported net income in 2016 at UAH 677.7 mn, an increase of 7% or UAH 45.9 mn over the previous period. The company's financial report follows international standards and is confirmed by conclusions of the independent auditing firm KPMG.

This is the highest income indicator in the period of company's operation on the market since 2014. The company's revenues grew last year to UAH 2.442 bn or by 33%; EBITDA increased 32% from UAH 820.091 mn to UAH 1.083 bn.

Sales increase of the company's main products for export in volume largely contributed to PJSC UMCC's positive financial dynamics. Specifically, sales of ilmenite concentrate grew 64% over the reported period to 278,356 t, rutile concentrate - by 22% to 60,000 t, zircon concentrate - 20% to 21,826 t.

The year 2016 was the turning point for UMCC's subsidiaries. The company succeeded in reorienting Irshansk MPP's ilmenite to foreign markets after the plant was forced to supply its products to Crimea Titan for 10 years. The demand for rutile, zircon and other types of more expensive concentrates produced by Vilnohirsk MMP also increased with buyers of ilmenite produced in Vilnohirsk becoming more active. Previously, the plant's warehouses were overfilled with this product for a long time.

The growth of demand for the most expensive concentrates produced by VMMP - rutile, zircon and also kyanite-sillimanite and powder concentrates - provided for the increase of UMCC revenues in 2016.

"Essentially, the financial indicators of 2016 reflect the result of earlier taken efforts aimed at expanding the sales markets. The warehouses of the subsidiaries have been nearly emptied in the performance of the export contracts, which is very important for the company that began its path on the titanium market - from scratch" commented PJSC UMCC Acting Chairman of the Board Oleksandr Gladushko.

Last year, the global titanium market hit the rock bottom of the crisis, but this did not prevent the company to show the positive financial result, he said.

In 2017, the company's income has shown a trend towards decline, largely due to the board's decision to substantially increase expenses for stripping works, product shipment and also social responsibility, which considerably increases the products' production costs, said Gladushko.

As a reminder, the Cabinet of Ministers of Ukraine included PJSC UMCC in the list of companies subject to privatization in 2017.

Content provided by UMCC, via Reuters.