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JSC CHELYABINSK ZINC PLANT: Q1 2012 Financial Results


NEWS RELEASE

For Immediate Release - 07 June, 2013


    Chelyabinsk Zinc Plant Announces Q1 2013 Consolidated Financial Results    

Chelyabinsk, Russia - June 07, 2013 - Chelyabinsk Zinc Plant (LSE, MICEX:
CHZN), Russia's largest producer of zinc and zinc alloys, is pleased to
announce its consolidated financial results for the three months ended March
31, 2013 based on consistent accounting policy (Unaudited).

Q1 2013 HIGHLIGHTS

  * Chelyabinsk Zinc Plant's (CZP) revenue totalled RUB 3,178 mln. 
      * EBITDA amounted to RUB 289 mln or 9% of revenue.
      * Net profit was RUB 74 mln.
    Consolidated financial results

(in millions of Russian Roubles)          Q1          Q1       Change, % 
                                                                         
                                         2013        2012                

Revenue 3,178 3,256 (2%)

Gross profit 444 627 (29%)


                                                                         
                     Gross margin, %          14%         19%            

EBITDA (1) 289 531 (46%)


                                                                         
                    EBITDA margin, %           9%         16%            

Profit before income tax 83 347 (76%)

Net profit 74 271 (73%)


                       Net margin, %           2%          8%            

(1) EBITDA, for any relevant period, represents operating profit before
interest, tax, depreciation and amortization.

EBITDA is not a measurement of CZP's operating performance presented in the
financial information, prepared in accordance with IFRS, and should not be
considered as an alternative to operating profit or any other performance
measure derived in accordance with IFRS or other relevant financial framework.

Revenue

Q1 2013 consolidated revenue decreased by 2% to RUB 3,178 mln as compared to Q1
2012.

The average LME zinc price in Q1 2013 stayed at the level of Q1 2012 and
amounted to US$ 2,033/tonne. The average LME lead quotes increased by 10% to
US$ 2,301/tonne.

Revenue structure

(in millions of Russian Roubles)          Q1          Q1       Change, % 
                                                                         
                                         2013        2012                

Zinc and zinc alloys 2,338 2,212 2%


                                                                         
                                 CZP        1,895       1,645         15%
                                                                         
                         Brock Metal          443         567       (22%)

Zinc tolling 231 411 (44%)

Lead concentrate 84 216 (61%)


                                                                         
                                 CZP           25          42       (41%)
                                                                         
                           Nova Zinc           59         174       (66%)

Other products 525 417 26%

Total revenue 3,178 3,256 (2%)

In Q1 2013, CZP's revenue from sale of zinc and zinc alloys increases by 15% as compared to the Q1 2012 and amounted to RUB 1,895 mln. Increase of the revenue was due to the growth of sales on the domestic market by 12% (Q1 2013: 27.1 thousand tonnes; Q1 2012: 24.2 thousand tonnes).

Revenue of The Brock Metal Company Limited for Q1 2013 amounted to RUB 443 mln, 22% lower than in Q1 2012. This decrease was due to 22% decrease of zinc alloys sales (Q1 2013: 6.0 thousand tonnes; Q1 2012: 7.7 thousand tonnes).

CZP received revenue of RUB 231 mln under tolling agreement in Q1 2013, which is 44% lower compared to Q1 2012. The decrease of tolling's volume (Q1 2013: 8.5 thousand tonnes; Q1 2012: 15.2 thousand tonnes) was due to growth of zinc and zinc alloys demand on the domestic market and seasonal fluctuations in sales under tolling agreement.

Revenue from lead concentrate sales for Q1 2013 amounted to RUB 84 mln (Q1 2012: RUB 216 mln). The decrease was due to Nova Zinc shipment of 3.0 thousand dry metric tonnes of lead concentrate in Q1 2012, partly from the 2012 opening balance (Q1 2013: 1.0 thousand dmt).

In Q1 2013, revenue from CZP's other by-products increased by 26% to RUB 525 mln as compared to Q1 2012. It was mainly due to the increase of sales of precious metals and indium.

Cost of Sales

(in millions of Russian Roubles) Q1 Q1


                                                             
                                         2013        2012    

Raw materials and consumables used 1,654 1,449 in production

Utilities and fuel 551 507

Depreciation and amortization 222 227

Staff cost 201 192

Repairs and maintenance 175 147

Change in work-in-progress 178 (42)

Mineral extraction tax 44 45

Cost of goods and material for 28 25 resale

Production overheads 24 24

Impairment of assets (2) -

Inventory provision (9) (2)

Change in finished goods (332) 56

Cost of sales 2,734 2,628

Cost of materials and consumables used primarily comprises of the cost of zinc concentrate, zinc containing raw materials, materials for alloys production and auxiliary materials used in the production process. The increase by 14% was due to the growth of usage of purchase zinc concentrate instead of tolling's, changes of raw materials structure (the growth of usage of import zinc concentrate), and also to the increase of auxiliary materials prices.

In Q1 2013, costs of utilities and fuel increased by 9% to RUB 551 mln. This increase was due to the growth of electricity tariffs for CZP (Q1 2013: RUB 2.21 per kWh: Q1 2012: RUB 1.93 per kWh).

Staff costs increased by 5% as compared to the relevant period of the previous year, to RUB 201 mln. The increase was due to the growth of average salaries.

Net profit

Net profit for Q1 2013 totalled RUB 74 mln compared to RUB 271 mln for Q1 2012.

About Chelyabinsk Zinc Plant

Chelyabinsk Zinc Plant is the leading Russian zinc producer. In 2012 the plant produced 160,002 tonnes of saleable SHG zinc.

According to consolidated IFRS accounts, revenue in 2012 was RUB 13,077 mln and EBITDA was RUB 1,499 mln.

Ordinary shares of CZP are traded on the Moscow exchange MICEX-RTS under ticker CHZN and Global Depository Receipts (GDR) are traded on the London Stock Exchange under ticker CHZN.


                                                   Investor and Media Contacts:
                                             Natalya Vasilieva, PR, ngv@zinc.ru
                                                        Tel: +7 (351) 799-01-52
                                              Evgeny Ponomarev, IR, eyp@zinc.ru
                                                          Tel: +7 963 998-55-58

This announcement may include forward-looking statements. CZP's actual results
may differ materially from those made in or suggested by the forward-looking
statements contained in this announcement. By their nature, forwarding-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. Even if
the actual results are consistent with the forward-looking statements contained
in this announcement, those results may not be indicative of results or
developments in future periods. CZP does not undertake any obligation to update
any forward-looking statements to reflect events that occur or circumstances
that arise after the date of this announcement. 

JSC CHELYABINSK ZINC PLANT

Summary Consolidated Statement of Financial Position (unaudited)

In thousands of Russian Roubles                  31 March 2013 31 December 2012

ASSETS

Non-current assets

Property, plant and equipment and advances for 5,180,393 5,311,993 capital construction

Intangible assets 76,782 74,591

Other non-current assets 305,883 37,800

Total non-current assets 5,563,058 5,424,384

Current assets

Inventories 2,075,719 2,012,523

Trade and other receivables 2,214,771 1,917,416

Current income tax prepayments 66,784 48,277

Loans issued 361,206 354,480

Short-term financial assets - 3,722

Bank deposits, restricted cash, cash and cash 1,431,968 1,915,548 equivalents(1)

Total current assets 6,150,448 6,251,966

TOTAL ASSETS 11,713,506 11,676,350

EQUITY

Share capital 127,635 127,635

Share premium 1,375,231 1,375,231

Legal reserve 3,011 3,011

Hedging reserve (9,297) -

Cumulative currency translation reserve (150,619) (159,721)

Retained earnings 9,140,335 9,066,144

TOTAL EQUITY 10,486,296 10,412,300

LIABILITIES

Non-current liabilities

Provision for asset retirement obligations 98,510 107,272

Deferred income tax liability 170,722 184,981

Other non-current liabilities 54,198 53,783

Total non-current liabilities 323,430 346,036

Current liabilities

Short-term financial liabilities 9,297 -

Accounts payable, accrued expenses and 698,657 774,633 advances from customers

Current income tax payable 2,838 7,188

Other taxes payable 192,988 136,193

Total current liabilities 903,780 918,014

TOTAL LIABILITIES 1,227,210 1,264,050

TOTAL LIABILITIES AND EQUITY 11,713,506 11,676,350

1. Including bank deposits at amount of RUB 1,146,405 thousand (RUB 1,489,345


    thousand as at 31 December 2012), restricted cash at amount of RUB 927
    thousand (RUB 817 thousand as at 31 December 2012), cash and cash
    equivalents at amount of RUB 284,636 thousand (RUB 425,386 thousand as at
    31 December 2012).
    JSC CHELYABINSK ZINC PLANT

Summary Consolidated Statement of Income (unaudited)

In thousands of Russian Roubles                      Three months ended        
                                                                               
                                                 31 March 2013    31 March 2012

Revenue 3,177,815 3,255,744

Cost of sales (2,734,133) (2,628,454)

Gross profit 443,682 627,290

Distribution costs (160,514) (128,933)

General and administrative expenses (190,745) (180,741)

Taxes other than on income (32,237) (30,015)

Other operating expenses, net (7,333) 3,104

Operating profit 52,853 290,705

Finance income/(costs), net 38,160 33,727

Foreign exchange gain/(loss), net (7,844) 22,600

Profit before income tax 83,169 347,032

Income tax expense (8,977) (75,921)

Profit for the period 74,192 271,111

Profit attributable to: 74,192 271,111

Shareholders of the Company

Profit for the period 74,192 271,111

Earnings per share - basic and diluted (in 1,4 5,0 RUB)

JSC CHELYABINSK ZINC PLANT

Summary Consolidated Statement of Cash Flows (unaudited)

In thousands of Russian Roubles Three months ended


                                         31        31                      
                                      March     March                      
                                       2013      2012                      

Cash flows from operating activities

Profit before income 83,168 347,032 tax

Adjustments for:

Depreciation and 236,885 240,526 amortization

Net gain on disposal (7,871) (8,809) of property, plant and equipment

Decrease in (8,771) (1,887) inventory provision

Finance income, net (38,160) (33,728)

Foreign exchange (976) (46,434) gain, net

Other non-monetary 39,517 (290) operating (income)/ expenses, net

Operating cash flows 303,792 496,410 before changes in working capital

Increase in trade (317,074) (518,947) and other receivables

(Increase)/decrease (50,649) 114,098 in inventory

(Decrease)/increase (13,890) 282,327 in trade payables and taxes payable

Increase in (110) (127) restricted cash balance

Cash generated from (77,931) 373,761 operations

Interest paid (235) (264)

Income taxes paid (48,428) (68,771)

Net cash generated (126,594) 304,726 from operating activities

Cash flows from investing activities

Purchase of (227,191) (255,402) property, plant and equipment and intangible assets

Purchase of (1,531) - exploration and evaluation assets

Proceeds from sale 120 508 of property, plant and equipment

Loans issued (145) (253)

Proceeds from 1,122 1,056 repayment of loans

Interest income received 28,177 8,051

Decrease/(increase) 350,357 (317,671) in bank deposits

Increase in (152,000) - long-term bank deposits

Net cash used in (1,091) (563,711) investing activities

Cash flows from financing activities

Finance lease payments - -

Net cash used in - - financing activities

Effect of currency (13,065) (4,556) translation and exchange rate fluctuations on cash and cash equivalents

Net decrease in cash and (140,750) (263,541) cash equivalents

Cash and cash 425,386 539,897 equivalents at the beginning of the period

Cash and cash 284,636 276,356 equivalents at the end of the period

END

-0- Jun/07/2013 06:00 GMT

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