According to the results of 2024, the financial indicators of two major Russian coal companies, Mechel and Raspadskaya, have catastrophically worsened.
The net loss of Mechel PJSC amounted to $430.2 million, compared to a profit of $259.3 million in 2023. The company's net debt stands at $3 billion. Production profitability decreased from 21% in 2023 to 14% in 2024.
For Raspadskaya PJSC, 2024 ended with a net loss of $133 million, compared to a profit of $440 million in 2023. The company's profitability is negative at -8% compared to 20% in 2023.
The reasons for the worsening financial indicators of the companies:
- High accounting and credit rates, which limit the servicing of the credit portfolio, including financing capital expenditures, repair, and environmental programs.
- A decrease in global coal prices. In 2024, the average price of 1 ton of coking coal on the global market decreased from $330 in 2023 to $290.
- Western sanctions. The EU imposed a ban on the purchase, import, and transfer of Russian coal. Mechel and Raspadskaya were also added to the U.S. sanctions list.
- Problems with railway transport. Against the background of increased freight flows to the east, there was a shortage of personnel and locomotives. Due to congestion in the eastern direction, the average speed of railway traffic fell below 35 km/h. This led to delays in coal exports and violations of contract terms with companies.
- A decline in demand for Russian coal products in Asian countries. In 2024, supplies to India fell to 25 million tons (a 37% decrease year-on-year), to Turkey – to 14 million tons (-35%), and to China – to 93.9 million tons (-7%).
In total, in 2024, Russian coal companies exported 195 million tons of products to foreign markets (down 17.5 million tons from the previous year). From January to November 2024, the coal industry in Russia earned a profit of $1.9 billion (-65%), while losses increased 4.3 times, reaching $2.7 billion.
If the current conditions on global coal markets and Western sanctions against Russia persist, the financial indicators of the Russian coal industry will continue to, as they say in Russia, "negatively grow."
