OREANDA-NEWS. On June 13, 2007 Chelyabinsk Zinc Plant (LSE: CHZN, RTS: CHZNG), Russia’s largest producer of zinc and zinc alloys, announced its IFRS audited consolidated results for the full year 2006, reported the press-centre of  Chelyabinsk Zinc Plant.

Gross profit margin increased to 32% compared to 16% in the previous year, while EBITDA margin increased from 14% to 33%. All margins posted positive growth year on year since the rate of sales growth exceeded the rate of increase in cost of sales, and selling, general and administrative costs. This trend was partially offset by the increased cost of zinc concentrates and secondary raw materials for CZP relative to LME zinc prices. Thus, the cost of materials and consumables used increased by 218% to $ 298б6 million and represented 78% of the total cost of sales in 2006 against 61% in 2005. 

The cost of utilities and fuel increased by 54% to $34,3 million (2005: $22,3) and was primarily the result of higher production levels and, therefore, increased electricity consumption.

As a result of the consolidation of Nova-Zinc and salary increases, staff costs increased by 44% to $5,8 million (2005: $4,1 million). In 2006 CZP employed 2,955 people, of whom 1,126 were employed at Nova-Zinc.
 
Net Income margin growth was partially eliminated by increased net interest expenses that amounted $9,2 million in 2006 compared to close to zero in 2005. This increase was due to facility agreements of the total amount of $ 138,5 million CZP entered into on 31 March 2006 to fund the indirect acquisition of Nova-Zinc.

Commenting on the CZP 2006 results, Sergei Moiseyev, Chairman of the Board of Directors of CZP said: “We proud to exceed the consensus expectations on our first year as a public company. I have every confidence that 2007 will prove to be another successful year for CZP”.

IFRS Consolidated Financial Statements for the year ended 31 December 2006 are awailable to download at 'Investor Relations' section, 'Financials' subsection or following the link
http://www.zinc.ru/Files/CZP_financials_FY2006-3027.pdf