OAO Mechel (MTLR) climbed the most in more than three months after Russia’s largest producer of coal for steelmakers said fourth-quarter profit surged almost eightfold as the ruble strengthened, leading to a foreign exchange gain.
Mechel rose 5.4 percent to 229.20 rubles by the close in Moscow, the biggest gain since Jan. 26, after rising as much as 5.8 percent earlier.
Net income in the fourth quarter increased to $201.15 million from $25.7 million in the third while revenue for the period declined 8.8 percent to $2.9 billion, the company said in a statement today.
“This is a positive surprise, profit exceeded our expectations,” Vladimir Sergievskiy, an analyst at Finam Investment Co., said by phone from Moscow. “This is due to the beneficial currency exchange rate.”
Net income in 2011 climbed to $727.9 million from $657.2 million the previous year, the company said.
Shareholders as of May 22 are eligible to vote on the dividend recommendation of 8.06 rubles a common share and 31.28 rubles a preferred share at a June 29 annual meeting, Mechel said today in a regulatory filing. Preferred shares surged 11 percent to 201.50 rubles.
Mechel has retreated 15 percent this year and trades at 3.8 times estimated earnings. Consol Energy Inc., the third-largest U.S. coal producer and a member of the S&P 500’s coal and consumable fuel sub-industry index, trades at 17.3 times estimated earnings, while the ratio for Peabody Energy Corp., the largest U.S. producer of the commodity, is 9.6.
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