JOHANNESBURG (miningweekly.com) – LSE- and Nasdaq-listed chrome miner Ruukki Group, which would now be led by Dr Danko Koncar as CEO, on Tuesday reported that revenue for 2012 dropped by 18% year-on-year to €130.4-million.

The fall in revenue came on the back of what Koncar described as “a very tough environment” for the company.

"During my over 20 years in the ferrochrome industry, I have never experienced a market as difficult to predict as 2012. In general, it has been a very tough environment with not much to cheer about.

“Early in the year, there were some positive signals but, after the seasonally weak European summer, there was no recovery, which many of us had hoped for,” he said in a statement.

While earnings before interest, taxes, depreciation and amortisation (Ebitda) for the year improved significantly to €10.9-million from €1.4-million in 2011, the company posted a loss of €18.1-million for the year. 

“Throughout 2012, we executed our plan successfully. Our 2012 results, especially our performance in the most recent quarter, show that even in a deteriorating market we improved our profitability. The whole year was, with a wide margin, our best year since entering into the mining and metals business in 2008,” Koncar noted.

Full-year production decreased by 18.6% to 288 095 t from 353 962 t in 2011, with sales from processed products decreasing by 37.9% to 66 449 t.

Cash flow from operations was €5.8-million.

Meanwhile, the company reported that it had decided to participate in parastatal Eskom's electricity buyback programme for its South Africa-based ferroalloys division, Mogale Alloys, until the end of first quarter of 2013.

It would also continue its cost-saving initiatives and restructuring of functions, which are expected to bring material costs savings in 2013, thus improving full-year performance.

“Unfortunately, we cannot trust the market to give us tailwind in 2013. Therefore, late last year, we made a plan to significantly restructure our organisation and the way we work. Our focus is on generating cash and on increasing profits independently of market movements,” said Koncar.

Ruukki expected a further significant increase in Ebitda this year, which it planned to achieve through a continued focus on value-added speciality products, a lower cost base and ongoing improvements across all operations.

“I believe that ferrochrome, particularly the speciality and super alloys segment, is a good market to be in. Ruukki is evaluating multiple initiatives which will strengthen our position in this market and will provide us with growth opportunities," he said.

He did, however, concede that the global economic outlook remained uncertain as the eurozone crisis continued and demand for commodities, primarily driven by Chinese consumption, remained weak.

In response to an expected continuation of volatility in the ferroalloy market and exchange rate, the group was preparing for significant price fluctuations and would continue to adapt its production levels accordingly.

Meanwhile, Koncar’s appointment as CEO followed an announcement in January that the company would undergo an extensive restructuring that would see former CEO Thomas Hoyer, as well as corporate affairs GM Markus Kivimäki and finance GM Kalle Lehtonen vacate their positions.
Koncar – the group’s former executive enterprise director – and his interested parties held 70.9-million Ruukki shares, representing 28.55% of the company's issued share capital.