Nornickel, the world's top producer of refined nickel and palladium from Russia, said its 2024 net profit fell 37 percent to $1.8 billion as Western sanctions and low metal prices squeezed earnings.
Nornickel said its 2024 revenue fell 13 percent to $12.5 billion, while earnings before interest, taxes, depreciation and amortization fell 25 percent to $5.2 billion.
“Sanctions and restrictions as well as falling prices for our primary metals continue to weigh on our revenues, profitability and ability to generate cash flow,” Nornickel President Vladimir Potanin said in a statement.
While Nornickel has not been directly sanctioned by the West, the move has prompted some Western producers to avoid buying Russian metal, complicated payments and limited access to Western equipment, causing companies to shift sales to Asia.
Potanin said Nornickel managed to cut cash operating costs by 3 percent and halted net working capital growth, which he called a major negative trend in recent years as the company accumulated stocks of the metal it produces.
Nornickel said the ruble, a weaker Russian currency and stock reductions helped restrain net working capital growth last year.
The company said its management would recommend the board of directors not to pay a dividend in 2024.
“In the context of ongoing volatility in commodity markets and high geopolitical risks, our top priorities are maintaining the company’s financial stability, increasing operational efficiency, and investing in future markets and products,” said the Company’s CFO, Sergei Malyshev.
The company said it sees a global nickel surplus of 150,000 tonnes by 2025 and expects the global palladium market to balance this year.
Nornickel said the Trump administration's less aggressive electrification agenda was supporting the demand outlook for palladium, which is used in the exhaust systems of internal combustion engine vehicles.
He added that “a new wave of industrialization in the West fueled by the return of the Trump administration,” coupled with China’s economic stimulus, is supporting global copper demand.
Nornickel said it had adapted to supply disruptions linked to Western sanctions that have affected equipment deliveries for the overhaul of the main furnace at its flagship Nadezhda smelter, which resumed operations last year.
The company plans to invest $2.1 billion this year, including in research into potential new uses for the metals it produces.
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