Major Russian Zinc producer Chelyabinsk Zinc has reported an 80% drop in Net profit for Q1 2008 under IFRS.
Net Profit was down at 109 Million Roubles ($4.7 Million) for the 3 months to March 31, compared with 550 Million Roubles ($23.9 Million) for the same period 2007. The company attributes the fall in profit to falling global zinc prices, despite increased production and sales volumes. Sergey Krivokhizhin, Metals and Mining Analyst from Alfa Bank commented on the results for Business Today. Weak results were expected with the LME zinc price well down over the year, but we expected EBITDA of $22 Million and $11 Million Net Profit. We think the results are negative. The company has good revenues but is having trouble holding down costs.