Key Nickel Supplier Reports Financial Performance for Full Year 2023
In the ever-fluctuating world of metals, Norilsk Nickel, the global titan in palladium and top-tier nickel producer, faced a turbulent 2023. With the markets taking a roller coaster ride, the company's financials mirrored the ups and downs. Last year's revenue took a 15% hit, dropping to $14.4 billion, as the prices for its core metals like nickel, copper, palladium, and rhodium dipped. Despite the market's mood swings, Norilsk Nickel managed to sell off its entire metal production for the year, along with chipping away at the stockpile built up in 2022.
EBITDA, a key earnings measure, wasn't immune to the downturn, shrinking by 21% to $6.9 billion. Yet, in a silver lining, the EBITDA margin managed to hold its ground at a robust 48%. Cost management came into sharp focus as cash operating expenses saw a 19% reduction to $5.3 billion, a feat achieved partly thanks to the Russian rouble's decline and a strategic halt in buying metal from third parties. This savvy belt-tightening helped counterbalance the sting of new export duties and inflation's bite on expenses.
Investment in future growth also felt the pinch, with capital expenditure tapering off by 29% to $3 billion. This cutback was attributed to a softer rouble, more judicious payments to contractors, and a reshuffling of investment projects. The reshuffle came as a response to a pullback by foreign tech and equipment suppliers, a move Norilsk Nickel dubbed "voluntary self-sanctions."
On the balance sheet, the net working capital went down by 23% to $3.1 billion, thanks in part to the rouble's devaluation and strategic sales of previously hoarded metal. The company's net debt saw a welcome decline of 18% to $8.1 billion, maintaining a steady net debt/EBITDA ratio of 1.2x.
In a strategic maneuver to keep its debt in check and maintain liquidity, Norilsk Nickel continued to fine-tune its debt portfolio, ensuring all obligations were met while keeping a safety net of reserve credit lines. In a nod to the retail investor, a significant move came in December when shareholders green-lighted a stock split, chopping each share into 100 pieces to widen their market appeal.
