Nornickel reports 1Н 2021 interim consolidated IFRS financial results

Moscow, August 5, 2021 — PJSC MMCMining and Metallurgical CompanyPublic Joint Stock Company "Mining and Metallurgical Company "Norilsk Nickel"Go to the glossaryGo to the glossary Norilsk Nickel the world’s largest palladium and high-grade nickel and a major producer of platinum and copper, reports interim consolidated IFRSInternational Financial Reporting StandardsGo to the glossary financial results for six months ended June 30, 2021.

1H2021 HIGHLIGHTS

  • Consolidated revenue increased 33% y-o-y to USD 8.9 billion owing to higher metal prices and increase of palladium sales volumes, which have more than offset production losses caused by the temporary suspension of Oktyabrsky and Taimyrsky mines due to their flooding and Norilsk concentrator, following an incident in February this year;
  • After the water inflow to the underground mines was effectively stopped in late March, the Oktyabrsky mine resumed full production by the middle of May, while the Taimyrsky mine has been restored to 80% capacity and is expected to return to full capacity by the end of this November. Norilsk concentrator has reached 85% of its design capacity and is expected to return to full operations in early October this year;
  • EBITDA increased three-fold y-o-y to USD 5.7 billion due to higher revenue and lower base effect of 1H2020, when USD 2.1 billion environmental provision related to the diesel fuel spill in Norilsk industrial area in May 2020 was recognized;
  • CAPEX increased 80% y-o-y to almost USD 1 billion driven by stepped up investments in Sulfur project, South Cluster development as well as increased capital repairs and equipment upgrades investments aiming at the improvement of industrial safety and modernization of core assets;
  • Net working capital increased more than two-fold to USD 1.8 billion mostly driven by one-off and seasonal factors such as changes in income tax payable and amortization of advance payments by customers. The Company confirms its working capital target of approximately USD 1 billion by the end of 2021;
  • Free cash flow decreased 48% y-o-y to USD 1.4 billion driven by the reimbursement for the environmental damages in the amount of USD 2.0 billion and increased capital expenditures;
  • Net debt increased 64% y-o-y to USD 7.7 billion owing to lower free cash flow, payment of final dividend for 2020 and the share buyback, with net debt/EBITDA ratio increased marginally to 0.7x as of June 30, 2021;
  • On June 1, 2021, the Company’s Board of Directors approved holistic environmental strategy covering six major areas (air, water, soil, tailings and waste management, biodiversity and climate change) and setting 21 concrete targets for 2030;
  • In June 2021, the Company paid final dividend for 2020 in the amount of RUR 1,021.22 (approximately USD 13.89) per ordinary share;
  • In June 2021, the Company completed share buyback, having repurchased from 5,382,079 ordinary shares at RUB 27,780 (around USD 384) per share for a total amount of approximately USD 2.1 billion.

RECENT DEVELOPMENTS

  • In July 2021, NornickelPublic Joint Stock Company "Mining and Metallurgical Company "Norilsk Nickel” and its subsidiariesGo to the glossary got a lawsuit from the Federal Agency for Fishery for 58.7 billion rubles. Based on the preliminary analysis the GroupPublic Joint Stock Company "Mining and Metallurgical Company "Norilsk Nickel” and its subsidiariesGo to the glossary believes that the amount of damages in monetary terms to aquatic bioresources resulting from the 2020 diesel fuel spill as stated in the lawsuit by Rosrybolovstvo is overstated. It exceeds by many times the results of investigations carried out by specialized scientific institutions and experts, which have assessed the impact of this incident on aquatic bioresources. After completion of the analysis of the lawsuit, management plans to defend position of the Company in court and provide it’s calculation of damages.

This announcement contains inside information in accordance with Article 7 of EU Regulation 596/2014 of 16 April 2014.

Full name and position of person making the announcement — Vladimir Zhukov, Vice — president, Investor Relations.

ABOUT THE COMPANY
MMC Norilsk Nickel is a diversified mining and metallurgical company, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper. The company also produces cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium, sulphur and other products.

The production units of Norilsk Nickel Group are located at the Norilsk Industrial District, on the Kola Peninsula and Zabaykalsky Krai in Russia as well as in Finland.

MMC Norilsk Nickel shares are listed on the Moscow and on the Saint-Petersburg Stock Exchanges, ADRAmerican Depositary Receipt; a security representing partial ownership in deposited securities of a foreign company certified by receipts issued by a US depositary bankGo to the glossarys are traded over the counter in the US and on the London, Berlin and Frankfurt Stock Exchanges.

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