Russian mining company Nornickel reported a net profit of $2.87bn (Rbs262.8bn) for the year 2023, marking a 51% slump compared with $5.85bn in the previous year.

This decline was the result of a fall in prices for key metals such as nickel, copper, palladium, and rhodium.

The average price of palladium recorded a 37% decline to $1,337 per ounce while copper prices fell 4% to $8,478 per metric tonne.

Nickel prices on the London Metal Exchange (LME) decreased 16% to $21,474 per metric tonne.

In contrast, the average platinum price rose 0.4% to $965/oz in 2023.

Despite the rout in metal prices, the company sold all of its metal production in 2023, in addition to a portion of stock that had been assembled in 2022.

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Nornickel’s consolidated revenue decreased 15% to $14.4bn in 2023.

Its EBITDA fell 21% year-on-year to $6.9bn due to reduced revenue while its EBITDA margin stood at 48%.

The company’s total cash operating costs in 2023 were $5.29bn.

This decrease was primarily driven by a reduction in purchases of refined metals for resale, which dropped by $432m, a fall in mineral extraction tax and other levies by $319m, a $98m reduction in materials and supplies, and a $266m decrease in labour costs.

The savings were partially offset by the introduction of export customs duties from 1 October 2023, which added $121m to costs.

The capital expenditure of the group decreased 29% to $3bn.

This fall was influenced by the softening of the rouble exchange rate, optimisation of payments to contractors, and rescheduling of investment projects due to voluntary self-sanctions imposed by foreign equipment suppliers.

In FY 2023, the company’s net debt was $8.1bn, down by 18%. Its net debt/EBITDA ratio as of 31 December 2023 was 1.2x.

Nornickel president Vladimir Potanin said: “The year 2023 was marked by a slump of metal prices and a lingering external political pressure on Russian business that affected our financial results.

“Nevertheless, the Company managed to fully deliver on its production guidance and more importantly to sell all metals produced in the reported period by redirecting sales to friendly countries. Effective cost control measures backed by benign forex dynamics resulted in lower cash operating costs and solid EBITDA margin.”

In July 2023, Nornickel sold its exclusive distribution company for nickel, platinum group metals and cobalt in the Americas to TMP Metals Group.