Consolidated revenue decreased 15%y‑o‑y amounting toUSD14.4billionfollowing the decline of prices for nickel, copper, palladium and rhodium. The Company sold all metal volumes produced in 2023 as well as a part of stock accumulated in 2022;
EBITDA decreased 21%y‑o‑y toUSD6.9billionowing to lower revenue while EBITDA margin remained at healthy 48%;
Cash operating costs decreased 19%y‑o‑y toUSD5.3billionmostly driven by the weakening of Russian rouble, the termination of metal purchases from third parties as well as the execution on operating efficiencies that allowed to mitigate inflationary pressure on expenditures in spite of introduction of export duties in October 2023;
CAPEX decreased 29%y‑o‑y toUSD3billiondriven by softening of rouble exchange rate, optimization of payments to contractors as well as rescheduling of investment projects owing to voluntary self‑sanctions imposed by foreign suppliers of equipment and technologies;
Net working capital decreased 23%year‑to‑date toUSD3.1billiondriven mostly by devaluation of rouble, partial sale of metal stock accumulated in 2022 and application of different payment terms in certain major procurement and construction contracts;
Net debt decreased 18%y‑o‑y toUSD8.1billionwith net debt/EBITDA ratio as of December 31, 2023 remained at 1.2x;
The Company continued the optimization of its debt portfolio to adapt to changing debt market reality while servicing all its outstanding debt portfolio and maintaining comfortable liquidity level on its balance sheet and reserve credit lines;
On December 7, General Shareholders Meeting approved the split of ordinary shares with a ratio of 100 to 1 to improve their attractiveness to retail investors.
EBITDAA non‑IFRS measure, for the calculationsee thenotesbelow.
8,697
6,884
–21%
EBITDA margin, %
52%
48%
–4 p.p.
Net profit
5,854
2,870
–51%
Capital expenditures
4,298
3,038
–29%
Net working capitalA non‑IFRS measure, for the calculation see an analytical review document ("Data book") available in conjunction with Consolidated IFRS Financial Results on the Company’s web site.
4,003
3,092
–23%
Net debtA non‑IFRS measure, for the calculation see an analytical review document ("Data book") available in conjunction with Consolidated IFRS Financial Results on the Company’s web site.
9,835
8,093
–18%
Net debt/12M EBITDA
1.1x
1.2x
0.1x
Dividends paidper share(USD)Paid during the perio.
40.5
–
–100%
Free cash flowA non‑IFRS measure, for the calculation see an analytical review document ("Data book") available in conjunction with Consolidated IFRS Financial Results on the Company’s web site.
437
2,686
6x
Проценты уплаченныеRegular outflows, financed from free cash flow.
599
791
32%
Dividends paid to non‑controlling interestRegular outflows, financed from free cash flow.
73
503
7x
Recentdevelopments
In January 2024, the Company paid dividend for 9 months of 2023 in the amount of RUR 915.33 per one ordinary share.
Key segmental highlightsSegments are defined in the consolidated financial statements.,USDmillion
Indicators
2022
2023
Change
Revenue
16,876
14,409
–15%
GMK Group
12,242
10,488
–14%
South cluster
972
1,066
10%
Kola division
10,889
8,396
–23%
GRK Bystrinskoye
1,325
1,340
1%
Other mining
1
–
–100%
Other non‑metallurgical
1,556
1,064
–32%
Eliminations
–10,109
–7,945
–21%
EBITDA
8,697
6,884
–21%
GMK Group
4,316
3,641
–16%
South cluster
450
484
8%
Kola division
4,071
2,254
–45%
GRK Bystrinskoye
934
963
3%
Other mining
–11
–12
9%
Other non‑metallurgical
8
–13
n.a
Eliminations
–7
343
n.a
Unallocated
–1,064
–776
–27%
EBITDA margin
52%
48%
–4 p.p.
GMK Group
35%
35%
0 p.p.
South cluster
46%
45%
–1 p.p.
Kola division
37%
27%
–10 p.p.
GRK Bystrinskoye
70%
72%
2 p.p.
Other mining
n.a.
n.a.
n.a.
Other non‑metallurgical
1%
n.a.
n.a.
In 2023, revenue of GMK Group segment decreased 14% to USD 10,488 million primarily due to lower metal prices and decrease in matte sales delivered to Kola Division partly offset by increase in sales volume of refined metals.
Revenue of South cluster segment increased 10% to USD 1,066 million primarily driven by higher volume of semi‑products realized to GMK Group partly offset by decrease in semi‑products realized prices.
Revenue of Kola division segment decreased 23% to USD 8,396 million primarily owing to lower metal prices partly offset by increase in sales volume of refined metals.
Revenue of GRK Bystrinskoye segment increased 1% to USD 1,340 million.
Revenue of Other non‑metallurgical segment decreased 32% to USD 1,064 million primarily due to cease of metals resale.
In 2023, EBITDA of GMK Group segment decreased 16% to USD 3,641 million owing to lower revenue, partly positively offset by decrease in cash operating costs, primarily due to lower mineral extraction tax and other levies, lower labour and repair and maintenance costs, and comparative impact of environmental provisions accrual.
EBITDA of South cluster segment increased 8% to USD 484 million primarily owing to higher revenue that was partly negatively offset by increase in cash operating costs primarily due to higher mineral extraction tax and ore mining services.
EBITDA of Kola division segment decreased 45% to USD 2,254 million primarily owing to lower revenue.
EBITDA of GRK Bystrinskoye segment increased 3% to USD 963 million primarily due to decrease in cash operating costs driven by Russian rouble depreciation against US Dollar.
EBITDA of Other mining segment decreased by USD 1 million and amounted to negative USD 12 million.
EBITDA of Other non‑metallurgical segment decreased by USD 21 million and amounted to negative USD 13 million.
EBITDA unallocated to segments increased by USD 288 million and amounted to a negative USD 776 million mainly due to lower social expenses and effect of the Russian rouble depreciation against US Dollar.
Metal sales
In 2023, revenue from metal sales was down 15% (or –USD 2,371 million) y‑o‑y to USD 13,702 million primarily driven by lower selling prices (‑USD 3,378 million) mainly for palladium, nickel, rhodium and copper, as well decrease in the resale of metals purchased from third parties (‑USD 385 million). The increase in the volume of metal sales (+USD 1,392 million) primarily due to the partial sale of metal stock accumulated in 2022 was partly offset by decrease in production volume in 2023.
Other sales
In 2023, other sales decreased 12% (or ‑USD 96 million) to USD 707 million primarily due to Russian rouble depreciation, which was partially offset by the increase of revenue from resale of icebreaking and sea transportation services.
Cost of sales
Cost ofmetal sales
In 2022, the cost of metal sales increased 21%(or +USD1,051million) toUSD6,108million, In 2023, the cost of metal sales increased 4%(or +USD232million) toUSD6,322million, driven by the following factors:
decrease in cash operating costs by 19%(or ‑USD1,234million);
decrease in depreciation and amortization by 7%(or ‑USD 76 million);
comparative effect of change in metal inventories y‑o‑y leading to the cost of metal sales increase byUSD1,542million.
Cashoperating costs
In 2023, total cash operating costs decreased 19% (or ‑USD 1,234 million) to USD 5,289 million mainly due to decrease in purchases of refined metals for resale (‑USD 432 million), decrease in mineral extraction tax and other levies (‑USD 319 million), decrease in materials and supplies (‑USD 98 million), decrease in labour costs (‑USD 266 million) partly offset by introduction of export customs duties from October 1, 2023 (+USD 121 million).
Inflationary growth of cash operating costs amounted to +USD 428 million while Russian rouble depreciation against US Dollar amounted to cash operating costs decrease of ‑USD 889 million.
Cost of metal sales,USDmillion
Indicators
2022
2023
Change
Labour
2,123
1,857
–13%
Materials and supplies
1,069
971
–9%
Mineral extraction tax and other levies
1,192
873
–27%
Third party services
784
659
–16%
Transportation expenses
257
216
–16%
Fuel
166
157
–5%
Export customs duties
–
121
100%
Electricity and heat energy
136
115
–15%
Purchases of raw materials and semi‑products
33
33
0%
Purchases of refined metals for resale
437
5
–99%
Other costs
326
282
–13%
Total cash operating costs
6,523
5,289
–19%
Depreciation and amortisation
1,015
939
–7%
Decrease/ increase (‑) in metal inventories
–1,448
94
n.a.
TOTAL
6,090
6,322
4%
Labour
In 2023, labour costs decreased 13%(or ‑USD266million) toUSD1,857millionamounting to 35%of the Group’s total cash operating costs driven by the following factors:
‑USD409million– Russian rouble depreciation against US Dollar;
+USD86million– increase in headcount in Norilsk industrial region;
‑USD77million– one‑off incentive payment to personnel in 1H2022:
+USD45million– payments to personnel within the programme"Digital investor";
+USD89million– other increase in labour costs mainly due to indexation of salaries and wages.
Materials and supplies
In 2023, expenses for materials and supplies decreased 9%(or ‑USD98million) toUSD971milliondriven by the following factors:
+USD219million– inflationary growth of materials and supplies;
‑USD133million– lower material and supplies expenses primarily due to decreased repairs as part of production efficiency measures;
‑USD184million– effect of the Russian rouble depreciation against US Dollar.
Mineral extraction tax and other levies
In 2023, mineral extraction tax and other levies decreased 27% (or ‑USD 319 million) to USD 873 million primarily due to lower metal prices and lower ore mined.
Third‑party services
In 2023, cost of third‑party services decreased 16%(or ‑USD125million) toUSD659millionmainly driven by:
‑USD61million– primarily due to decrease in repairs as part of production efficiency measures;
+USD79million– inflationary growth of third‑party services;
‑USD143million– effect of the Russian rouble depreciation against US Dollar.
Transportation expenses
In 2023, transportation expenses decreased 16%(or ‑USD41million) toUSD216milliondriven by the following factors:
‑USD23million– primarily decrease in transportation volume of metal products;
+USD20million– inflationary growth of expenses;
‑USD38million– effect of the Russian rouble depreciation against US Dollar.
Fuel
In 2023, fuel expenses decreased 5% (or ‑USD 9 million) to USD 157 million mainly due to Russian rouble depreciation against US Dollar partly offset by inflationary growth of fuel expenses in Norilsk industrial region.
Electricity and heat energy
In 2023, electricity and heat energy expenses decreased 15% (or –USD 21 million) to USD 115 million primarily due to Russian rouble depreciation against US Dollar.
Purchases of raw materials and semi‑products
In 2023, purchases of raw materials and semi‑products remained unchanged y‑o‑y and amounted to USD 33 million.
Purchases of refined metals for resale
In 2023, purchases of refined metals for resale decreased 99% (or ‑USD 432 million) to USD 5 million, primarily due to cease of refined metals purchases.
Other costs
In 2023, other costs decreased 13% (or ‑USD 44 million) to USD 282 million primarily due to Russian rouble depreciation against US Dollar partly offset by price inflation.
Depreciation and amortisation
In 2023, depreciation and amortisation expenses decreased 7% (or ‑USD 76 million) to USD 939 million mainly due to Russian rouble depreciation against US Dollar partly offset by increase in property, plant and equipment.
Decrease / Increase (with minus) in metal inventories
Сomparative effect of change in metal inventory amounted to +USD 1,542 million resulting in a respective increase in cost of metal sales mainly due to increase in metal inventories in 2022 driven by the extension of logistics and refocusing sales to new markets.
Cost of other sales
In 2023, cost of other sales decreased by USD 108 million to USD 721 million due to Russian rouble depreciation against US Dollar, which was partially compensated by increase in the cost of resale of icebreaking and sea transportation services.
Selling and distribution expenses
Selling and distribution expenses,USDmillion
Indicators
2022
2023
Change
Transportation expenses
118
132
12%
Export customs duties
–
43
100%
Marketing expenses
52
29
–44%
Staff costs
29
27
–7%
Other
56
54
–4%
TOTAL
255
285
12%
In 2023, selling and distribution expenses increased 12%(orUSD30million) toUSD285milliondriven by:
+USD43million– export customs duties introduced from October 1, 2023;
+USD14million– increase in transportation expenses primarily due to extension of logistics chains;
‑USD23million– decrease in marketing expenses.
General and administrative expenses
General and administrative expenses,USDmillion
Indicators
2022
2023
Change
Staff costs
833
684
–18%
Third party services
230
147
–36%
Depreciation and amortisation
107
110
3%
Property tax and other miscellaneous taxes
94
75
–20%
Transportation expenses
9
6
–33%
Other
80
71
–11%
TOTAL
1,353
1,093
–19%
In 2023, general and administrative expenses decreased 19%(or ‑USD260million) toUSD1,093million. Positive effect of the Russian rouble depreciation against US Dollar amounted toUSD242million. Changes of the general and administrative expenses in real terms were primarily driven by the following factors:
‑USD42million– decrease in third‑party services primarily driven by consulting services expenses;
+USD22million– increase in depreciation due to growth of fixed assets.
Other operating expenses
Other operating expenses, NET,USDmillion
Indicators
2022
2023
Change
Social expenses
407
205
–50%
Change in decommissioning obligations
12
53
4x
Change in other allowances
43
40
–7%
Loss on disposal of property, plant and equipment
70
36
–49%
Expenses on industrial incidents response
35
10
–71%
Change in provision on production and mining facilities shut down
14
–1
n.a.
Change in environmental provisions
93
–32
n.a.
Other, net
4
–42
n.a.
TOTAL
678
269
–60%
In 2023, other operating expenses, net decreased byUSD409milliontoUSD269milliondriven by the following factors:
‑USD202million– decrease in social expenses;
‑USD125million– lower environmental provisions related to compensation for environmental damages;
+USD26million– comparative effect of changes in provision on production and mining facilities shut down and in decommissioning obligations;
‑USD34million– decrease in loss on disposal of property, plant and equipment;
‑USD25million– decrease in industrial incidents response expenses.
Finance costs
Finance costs, NET,USDmillion
Indicators
2022
2023
Change
Interest expense, net of amounts capitalised
330
337
2%
Unwinding of discount on provisions
185
147
–21%
Fair value loss / gain (‑) on the cross‑currency interest rate swap contracts
18
60
3x
Interest expense on lease liabilities
16
35
2x
Income received as a result of early debt repayment
–172
–
100%
Gain (‑) / loss from currency conversion operations
111
–5
n.a.
Other, net
5
–7
n.a.
TOTAL
493
567
15%
In 2023, finance costs, net increased 15%toUSD567million. Finance costs, net decreased byUSD98millionin 2023 without taking into consideration profit from the early repayment of debt with a discount in 2022. The primary drivers of the change were:
‑USD116million– decrease in foreign currency conversion costs due to lower intraday volatility in the foreign exchange market;
‑USD38million– decrease in expenses related to unwinding of discount on provisions and due to significant volatility of discount rates during 2023, as well as changes in provisions;
+USD42million– increase in expenses driven by fair value revaluation of cross‑currency interest rate swaps primarily related to Russian rouble depreciation against US Dollar in 2023. In 2022, negative result of revaluation of financial instruments during a period of high exchange rate volatility was partially compensated by the appreciation of Russian rouble against US Dollar.
Income tax expense
The breakdown of the income tax expense,USDmillion
Indicators
2022
2023
Change
Current income tax expense
1,306
966
–26%
Deferred tax /benefit (‑) /expense
219
–302
n.a.
TOTAL INCOME TAX EXPENSE
1,525
664
–56%
In 2023, income tax expense decreased by USD 861 million driven mostly by lower profit before tax.
EBITDA
EBITDA,USDmillion
Indicators
2022
2023
Изменение
Operating profit
7,581
5,540
–27%
Depreciation and amortisation
1,026
1,165
14%
Impairment of non‑financial assets, net
90
179
99%
EBITDA
8,697
6,884
–21%
EBITDA margin
52%
48%
–4 p.p.
In 2023, EBITDА decreased 21% (or ‑USD 1,813 million) to USD 6,884 million primarily driven by lower revenue, which was partially offset by Russian rouble depreciation against US Dollar in 2023.
Statement of cash flows
Statement of cash flows,USDmillion
Indicators
2022
2023
Change
Cash generated from operations before changes in working capital and income tax
8,897
7,121
–20%
Movements in working capital
–3,184
–229
–93%
Income tax paid
–1,127
–1,164
3%
Net cash generated from operating activities
4,586
5,728
25%
Capital expenditure
–4,298
–3,038
–29%
Other investing activities
149
–4
n.a.
Net cash used in investing activities
–4,149
–3,042
–27%
Free cash flow
437
2,686
6x
Interest paid
–599
–791
32%
Payments of lease liabilities
–50
–45
–10%
Dividends paid to non‑controlling interest
–73
–503
7x
Other financing activities
–4,342
–1,065
–75%
Net cash used in financing activities
–5,064
–2,404
–53%
Effects of foreign exchange differences on balances of cash and cash equivalents
962
–25
n.a.
Net change in cash and cash equivalents
–3,665
257
n.a.
In 2023, net cash used in investing activities decreased 27% to USD 3,042 million primarily driven by decrease in capital expenditures.
In 2023, free cash flow increased 6 times to USD 2,686 million following the increase in net cash generated from operating activities and the decrease in cash used in investing activities.
In 2023, free cash flow less regular financing outflows (interest paid, payments of lease liabilities, dividends paid to non‑controlling interest of GRK Bystrinsky) increased by USD 1,632 million and amounted to USD 1,347 million following the increase in free cash flow.
Net working capital changes between the balance sheet and cash flow statement,USDmillion
Indicators
2022
2023
Change of the net working capital in the balance sheet
–2,734
911
Foreign exchange differences
–218
–780
Change in income tax balance
–165
208
Change of provisions, reserves and long term components of working capital included in cash flow
–225
–412
Other changes
158
–156
CHANGE OF WORKING CAPITAL PER CASH FLOW
–3,184
‑229
Capital investments breakdown by project,USDmillion
Indicators
2022
2023
Change
Polar Division, including:
1,543
1,223
–21%
Skalisty mine
90
90
0%
Taymirsky mine
83
73
–12%
Komsomolsky mine
40
41
3%
Oktyabrsky mine
14
5
–64%
Talnakh Enrichment Plant (TOF‑3)
194
123
–37%
Capitalised repairs
222
93
–58%
Purchase of equipment
322
219
–32%
Other Polar Division projects
578
579
0%
Kola MMC
350
233
–33%
Environmental program (Sulfur Programat the Nadezhda Smelter)
893
454
–49%
South cluster
298
248
–17%
Energy and gas infrastructure modernization
465
408
–12%
Bystrinsky project (Chita)
72
65
–10%
Other production projects
607
355
–42%
Other non‑production assets
70
52
–6%
TOTAL
4,298
3,038
–29%
In 2023, CAPEX decreased 29% (or ‑USD 1,260 million) to USD 3,038 million driven by the effect of the Russian rouble depreciation against US Dollar, optimization of settlements with contractors as well as the rescheduling of investment projects as voluntary self‑sanctions imposed by foreign suppliers of equipment and technologies resulted in redesign of investment projects.
Debt and liquidity management
Debt and liquidity,USDmillion
Indicators
As of 31 December 2022
As of 31 December2023
Change
USDmillion
%
Non‑current loans and borrowings
7,189
5,377
–1,812
–25%
Current loans and borrowings
4,295
4,335
40
1%
Lease liabilities
233
520
287
2x
Total debt
11,717
10,232
–1,485
–13%
Cash and cash equivalents
1,882
2,139
257
14%
Net debt
9,835
8,093
–1,742
–18%
Net debt /12M EBITDA
1.1x
1.2x
0,1x
n.a
As of December 31, 2023, the Company's total debt decreased by 13% to USD 10,232 million compared to December 31, 2022 partly following the depreciation of Russian rouble against US Dollar in 2023.
As of December 31, 2023, the Company's net debt decreased by USD 1,742 million due to decrease in total debt.
The Company fully honors its financial obligations in line with transactional documentation and fully complies with existing regulations.