Solway Group :: SOLWAY INVESTMENT GROUP SHOWS POSITIVE RESULTS FROM OPERATIONS IN 1H2015
4:29pm on Tuesday 13th October 2015
SOLWAY INVESTMENT GROUP SHOWS POSITIVE RESULTS FROM OPERATIONS IN 1H2015

Despite further deterioration of base metal markets, Solway Investment Group shows positive results from operations in 1H2015
• Sales Revenue stabilized at US$281 mln;
• Net income US$17 mln;
• EBITDA US$54 mln, EBITDA margin (19%) is above industry average;
• Net debt reducing to US$141 mln (down 21% since January 2015).
The key reasons for stable operating results amid stormy market conditions are:
• Strategic diversification of product mix (base metals / gold)
• Ramp-up of new projects nearing completion (Fenix debottlenecked now, capacity planned to exceed 2000 tons of Ni per month by 2016 / Kurilgeo at full speed now)
• Financial discipline as part of risk management procedures in place at Solway / careful approach with regard to entering new capital projects
• Cost reduction initiatives as part of production optimization programs being implemented at production units (waste-heat recovery technology and pulverized coal injection system now installed at Pobugsky, quick-fix cost-cutting projects underway at other plants)
• Support of state authorities and local communities.

Some positive impact is attributed to reduced pricing for local cost items resulting from local currency devaluation against USD, as well as reduction of USD nominated prices for key consumables (coal, diesel fuel and natural gas, power, etc.).
Major contributors to the Group's EBITDA are Cu and Zn&Pb segments: EBITDA margin at Macedonian SASA DOO above 60%; at Bucim DOO it exceeded 51% resulting from increased scope of leaching operations.
Key EBITDA growth point is gold asset at Kurils islands. Assets in Indonesia demonstrate planned reduction of losses due to less capital intensive phase of projects (discussions with banks on project financing are underway now).
Solway expects that steady implementation of approved growth strategy will yield in further improvement of Group's operating results in 2H2015.