RUSSIA’S Norilsk Nickel has recorded a return to profit in 2009 thanks to a successful cost cutting programme.
The world’s top nickel and palladium miner posted a net profit of $2.65bn (£1.83bn) versus a revised loss of $555m in 2008. The results beat forecasts despite lower metals prices, analysts said.
“Labour expenses decreased by 25 per cent compared to 2008 as a result of our cost-cutting programme and the effect of (currency) translation … Other savings were driven by the placement of Australian nickel assets on care and maintenance mode,” it said.
The chief executive, Vladimir Strzhalkovsky, also ruled out the possibility of a merger with debt-laden Rusal.
Rusal, the world’s top aluminium producer, bought a 25 per cent stake in Norilsk at the start of 2008 and later suggested the two firms may merge.
About half of Rusal’s market capitalisation is related to its Norilsk stake, said investor relations spokesman Alexey Ivanov. He noted that this would give Norilsk a relatively small gain in terms of asset value while debt would grow to about $12bn from $3bn.
Nevertheless, the company is looking at ways to reduce costs at its Australian nickel plant, which has been idle for more than a year, and might sell some of the operations.
“Most likely we will keep the sulphides and sell the laterites,” said Ivanov.
Strzhalkovsky said the group does not expect to be affected by Australia’s proposed 40 per cent mining tax.