Nornickel reports full year 2022 audited consolidated IFRS financial results

PJSC MMC Norilsk Nickel the world’s largest palladium and high-grade nickel and a major producer of platinum and copper, reports audited consolidated IFRS financial results for the year ended December 31, 2022.

2022 HIGHLIGHTS

Consolidated revenue decreased 5% y-o-y amounting to USD 16.9 billion. Higher nickel and cobalt prices and recovery of production volumes following the liquidation of damages caused by incidents at Oktyabrsky and Taimyrsky mines and Norilsk concentrator were negatively offset by lower copper and PGM prices as well as decline in metal sales volume driven by logistics disruptions and reorientation of sales to new markets that requires additional time;

EBITDA decreased 17% y-o-y to USD 8.7 billion owing to lower revenue, higher operating cash costs driven mainly by increase in labour expenses and repairs. EBITDA margin amounted to 52%;

Net income was down 16% y-o-y to USD 5.9 billion mostly driven by lower EBITDA;

CAPEX increased 55% y-o-y to a record USD 4.3 billion driven by growth of investments into flagship environmental, mining and metallurgical projects as well as capital repairs aimed at improvement of industrial safety and mitigation of physical risks of production assets;

Net working capital amounted to USD 4 billion driven mostly by increase in metal inventories as well as amortization of advance payments form customers and termination of factoring services;

Free cash flow decreased from USD 4.4 billion to USD 0.4 billion driven mostly by lower EBITDA, increase of net working capital and higher CAPEX;

Net debt doubled y-o-y to USD 9.8 billion following the decrease of free cash flow and payment of dividends. Net debt/EBITDA ratio as of December 31, 2022 was at 1.1x. The Company continues to duly service all its debt liabilities;

In September 2022, the Company received the consent of holders of 5 issues of eurobonds for the total amount of USD 3.75 billion to amend transaction documents in order to split payments to Russian and foreign investors, simplify cancellation of notes and appoint new Trustee. This was the largest deal of that kind in Russia both in terms of total amount and number of issues;

In October and December 2022, Nornickel placed 9.75% RUB 25 billion exchange-traded bonds on the Moscow Exchange and two issues of CNY bonds in the total amount of CNY 9 billion, respectively;

Economic restrictions imposed on Russia by a group of countries pose risks for operating, commercial and investment activities of the Company. To mitigate these risks Nornickel is developing relationship with alternative clients and suppliers, setting up new logistic routes and exploring new capital markets.