OREANDA-NEWS. Mechel OAO (NYSE: MTL), a leading Russian mining and steel group, today announced financial results for the full year 2013.

Oleg Korzhov, Mechel OAO's Chief Executive Officer, commented on the 2013 results: “In the past year, the Group's structure was subject to major transformation as part of our implementation of the revised strategy. Romanian steelmaking facilities were disposed of by the Group, chrome ore and ferrochrome producing enterprises were sold. “These steps had a positive impact on the company's condition as funds were no longer funneled into financing unprofitable enterprises, cash flow was freed and the sale of chrome assets brought in significant funds. The downside of the Group's asset restructuring was in lower revenues as well as major write-offs in our accounts. We have significantly cut down our capital investment program, which was largely due to the completion of the company's key investment projects or their implementation in the framework of project financing.

“Naturally, volatility in the global markets for metallurgical resources brings certain changes to our operations, complicates the deleveraging process and limits our capital investment capacity. Nevertheless we expect that the steps we take will have tangible positive effect in the medium term.”

• The major factor contributing to the 19-percent decrease in consolidated revenue as compared to 2012 was the 23-percent decrease in the steel segment's revenue due to the Group's disposal of unprofitable assets (Romanian facilities) and interruption of supplies from third parties due to the end of our partnership with Estar plants.

The decrease in the consolidated adjusted EBITDA was largely due to the decrease in prices for the mining division's key products.

The main reason for our net loss is in over 2 billion dollars of write-offs due to the negative results from discontinued operations, loss from disposal of non-current assets, impairment of long-term assets and goodwill, as well as provision for amounts due from related parties. Capital expenditure on property, plant and equipment and acquisition of mineral licenses for the FY2013 amounted to USD 558.1 million, of which USD 336.8 million was invested in the mining segment, USD 211.5 million was invested in the steel segment, USD 4.6 million was invested in the ferroalloy segment and USD 5.2 million was invested in the power segment.

• As of December 31, 2013, total debt was USD 9.0 billion. Cash and cash equivalents amounted to USD 269 million and net debt amounted to USD 8.7 billion (net debt is defined as total debt outstanding less cash and cash equivalents) at the end of 4Q 2013.