OREANDA-NEWS. OJSC "Kuzbasskaya toplivnaya company" (RTS/MICEX: "KBTK"), one of the fastest-growing thermal coal producers in Russia, is pleased to announce its operational results for the fourth quarter and full year 2012 ended December 31, 2012.

At the end of 12M 2012, the level of coal production remained at the 2011 level and totaled 8.71 mln. tonnes (2011: 8.73 mln. tonnes). Volume of coal sorting increased by 3% compared to 2011 and amounted 5.75 mln. tonnes. (2011: 5.56 mln. tonnes). The volume of high-quality coal produced by washing plant "Kaskad-1" from the production wastes amounted 0.81 mln. tonnes, which is 9% higher than level of 2011. Total volume of processed products of coal in the production of the Company increased from 72% in 2011 to 75% in 2012.

Sales volume in 2012, decreased by 4% to 10.20 mln. tonnes (2011: 10.66 mln. tonnes). Reduction of sales caused by weakening demand on export markets, which led to a reduction in export shipments by 8% to 5.91 mln. tonnes of coal in 2012 (2011: 6.45 mln. tonnes). Sales of coal in the domestic market increased by 2% to 4.29 mln. tonnes (2011: 4.21 mln. tonnes). The share of exports in total sales declined from 61% to 58% compared with 2011.

Average selling price of coal in 2012 amounted to RUB 1,294 per tonne, which is 5% higher than 2011 (RUB 1,228 per tonne). Average selling price of coal in the domestic market net of VAT and railroad tariff increased by 5% to RUB 1,276 per tonne (2011: RUB 1,213). The average export price in 2012 amounted to RUB 1,307 per tonne, which is 6% higher than in 2011 (RUB 1,237 per tonne).
In Q4 2012, the Company produced 2.39 mln. tonnes of coal, which is 7% higher than in Q3 (2.24 mln. tonnes). Compared with Q4 2011 (3.34 mln. tonnes), quarterly production fell by 7%.

Volume of coal sorting increased by 1% compared to Q3 (1.37 mln. tonnes) and amounted 1.38 mln. tonnes. The volume of washed coal production at the "Kaskad-1" washing plant decreased by 5% compared to Q3 2012 (0.21 mln. tonnes) and amounted 0.20 mln. tonnes. In comparison with the figure for the same period in 2011 production of washed coal increased by 5% (Q4 2011: 0.19 mln. tonnes).

Due to the traditional growth in trading activity in the Russian market of thermal coal during the heating season, the company's sales in the last quarter rose by 21% to 2.93 mln. tonnes of coal (Q3 2012: 2.42 mln. tonnes). Quarterly coal sales growth was higher than the growth of production, as the Company increased its resale of coal purchased from third-parties by 56% - up from 0.32 mln. tonnes to 0.50 mln. tonnes. This coal is sold through retail network in Western Siberia.

The main driver of the sales growth was domestic market, which increased by 36% (Q3 2012: 1.06 mln. tonnes) and reached 1.44 mln. tonnes of coal. In Q4 the volume of exports rose by 10% to 1.49 mln. tonnes (Q3 2012: 1.36 mln. tonnes). For the quarter share of exports in total sales of coal fell from 56% to 51%.

In the fourth quarter of 2012, the average selling price of coal fell by 1% compared with the previous quarter and reached RUB 1,269 per tonne (Q3 2012: RUB 1,276 per tonne). Compared with the same period in 2011, the average selling price of coal fell by 1% (Q4 2011: RUB 1,285 per tonne). The average sales price in the domestic market net of VAT and railroad tariff rose by 4% to RUB 1,312 per tonne (Q3 2012: RUB 1,259 per tonne). Average selling price of coal for export in Q4, excluding railroad tariff, decreased by 5% from RUB 1,288 per tonne to RUB 1,228 per tonne. The average export price in the Asia-Pacific region was RUB 1,237 per tonne, showing a decline by 4% compared to Q3 2012 (RUB 1,287 per tonne) and a decrease by 1% compared to Q4 2011 (RUB 1,250 per tonne). The average selling price in the European market decreased by 3% compared to Q3 2012 (RUB 1,267 per tonne) and amounted RUB 1,225 per tonne.

The Company plans to release its audited full year 2012 IFRS statements on April 4, 2012. Conference call to discuss the financial results will be held on the same day at 17.00 Moscow time (GMT +4.00), at 13.00 London time (GMT +0.00) and 9.00 New York City time (GMT -4.00). Details of the conference call will be published separately.