Revenue
Revenue by segment
In 2016, revenue of Group GMK segment decreased 6% y-oy, while revenue of Group KGMK segment was down by 14% y-o-y, to USD 6,194 million and USD 664 million, respectively. In both segments the revenue decline was primarily driven by lower realized metal prices. In Group GMK segment this negative effect was partly offset by the sale of metal stocks.
Revenue of NN Harjavalta decreased 4% y-o-y to USD 727 million. This was primarily driven by lower realized metal prices, which was partly compensated for by an increase of metals output resulting from the reconfiguration of the Company’s metallurgical facilities in Russia.
Revenue of Other metallurgical segment decreased 77% y-o-y to USD 7 million following the sale of international assets in 2015.
Revenue of Other non-metallurgical segment increased 44% y-o-y to USD 1,699 million owing to the increased revenue of the Group’s trading subsidiaries, resulting from recovery in metal prices and the sale of metal stocks in 2016.
| 2016 | 2015 | Change | |
|---|---|---|---|
| Refined metals | |||
| Russian operations | |||
| Nickel, thousand t | 218 | 197 | 11% |
| Copper, thousand t | 374 | 343 | 9% |
| Palladium, koz | 2,779 | 2,464 | 13% |
| Platinum, koz | 669 | 590 | 13% |
| Finland | |||
| Nickel, thousand t | 53 | 43 | 23% |
| Semi-products | |||
| Finland | |||
| Copper cake, copper, thousand t Metal volumes are given in respect of metals contained in semi-products. | 10 | 13 | (23%) |
| Botswana | |||
| Nickel concentrate, nickel, thousand t Metal volumes are given in respect of metals contained in semi-products. | - | 1 | (100%) |
| Nickel concentrate, copper, thousand t Metal volumes are given in respect of metals contained in semi-products. | - | 1 | (100%) |
| South Africa | |||
| Nickel concentrate, nickel, thousand t Metal volumes are given in respect of metals contained in semi-products. | 13 | 4 | 225% |
| Nickel concentrate, copper, thousand t Metal volumes are given in respect of metals contained in semi-products. | 6 | 2 | 3x |
| Metal sales | |||
| Group | |||
| Nickel, thousand t All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 271 | 240 | 13% |
| Copper, thousand t All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 374 | 343 | 9% |
| Palladium, koz All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 2,779 | 2,464 | 13% |
| Platinum, koz All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 669 | 590 | 13% |
| Gold, koz All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 155 | 93 | 67% |
| Rhodium, koz All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 85 | 84 | 1% |
| Cobalt, thousand t All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 5 | 5 | – |
| Silver, koz All information is reported on the 100% basis, excluding sales of metals purchased from third parties. | 2,565 | 1,915 | 34% |
| Semi-products, nickel, thousand t Metal volumes are given in respect of metals contained in semi-products. | 13 | 5 | 160% |
| Semi-products, copper, thousand t Metal volumes are given in respect of metals contained in semi-products. | 15 | 16 | (6%) |
| Semi-products, palladium, koz Metal volumes are given in respect of metals contained in semi-products. | 115 | 100 | 15% |
| Semi-products, platinum, koz Metal volumes are given in respect of metals contained in semi-products. | 43 | 39 | 10% |
| Semi-products, gold, koz Metal volumes are given in respect of metals contained in semi-products. | 9 | 9 | – |
| Semi-products, silver, koz Metal volumes are given in respect of metals contained in semi-products. | 148 | 142 | 4% |
Revenue from metal sales
| Metal | 2016 | 2015 | Change |
|---|---|---|---|
| Nickel (USD / t) | 9,720 | 11 962 | (19%) |
| Copper (USD / t) | 4,912 | 5,585 | (12%) |
| Palladium (USD / oz) | 614 | 695 | (12%) |
| Platinum (USD / oz) | 977 | 1,057 | (8%) |
| Cobalt (USD / t) | 24,091 | 26,291 | (8%) |
| Gold (USD / oz) | 1,254 | 1,162 | 8% |
| Rhodium (USD / oz) | 669 | 884 | (24%) |
| USD mln | 2016 | 2015 | Change |
|---|---|---|---|
| Nickel | 2,625 | 3,010 | (13%) |
| Copper | 1,839 | 1,916 | (4%) |
| Palladium | 1,888 | 1,807 | 4% |
| Platinum | 654 | 631 | 4% |
| Semi-products | 216 | 193 | 12% |
| Other metals | 424 | 326 | 30% |
| Revenue from metal sales | 7,646 | 7,883 | (3%) |
| Revenue from other sales | 613 | 659 | (7%) |
| Total revenue | 8,259 | 8,542 | (3%) |
Nickel
Nickel remained the largest contributor to the Group’s revenue comprising 34% of total metal sales in 2016 down from 38% in 2015 as nickel price fell the most relative to other metals within the Company’s commodity basket.
In 2016, nickel revenue decreased by 13% y-o-y (or USD 385 million) to USD 2,625 million primarily due to lower nickel price (–USD 612 million) and reduction in re-sale of nickel purchased from third parties to meet contractual obligations (–USD 71 million) , which was partly offset by higher sales volume of nickel produced from own feed (+USD 298 million).
The average realized price of nickel produced in Russia from own feed decreased by 19% y-o-y to USD 9,720 per tonne in 2016 from USD 11,962 per tonne in 2015.
Sales volume of nickel produced in Russia from own feed increased by 10% y-o-y (or 20 kt) to 215 kt. The increase in sales volume was primarily driven by the sale of metal from a temporary stock accumulated by the Company in the fourth quarter 2015.
The volume of nickel sales from purchased semi-products increased by 1 kt to 3 kt in 2016.
Sales volume of nickel produced by Norilsk Nickel Harjavalta increased by 23% y-o-y in 2016 to 53 kt as Harjavalta started to process the Company’s own Russian feed in line with downstream reconfiguration.
Copper
In 2016, copper sales accounted for 24% of the Group’s total metal sales, down 4% y-o-y (or USD 77 million) to USD 1,839 million primarily owing to lower realized copper price (–USD 231 million) which was partly offset by the increase in sales volume (+USD 154 million).
The average realized price of copper produced in Russia from own feed was down by 12% y-o-y to USD 4,912 per tonne in 2016 from USD 5,585 in 2015.
Physical volume of copper sales from Russian feed increased by 9% y-o-y (or 29 kt) to 369 kt. The increase in sales volumes was driven by sale of metal from the temporary stock, which was built in the fourth quarter 2015.
Palladium
In 2016, palladium sales accounted for 25% of the Group’s total metal revenue. The Group’s palladium revenue increased by 4% y-o-y (or by USD 81 million) to USD 1,888 million. The negative impact of lower realized price (–USD 201 million) was partly offset by the increased sales volumes (+USD 193 million). Additional USD 184 million of palladium revenue in 2016 came from the re-sale of metal purchased in the open market to fulfil the Company’s contractual obligations (vs USD 95 million in 2015).
Sales of palladium produced in Russia from own feed remained unchanged y-o-y at USD 1,692 million. The revenue decline owing to lower realized palladium price (down 12% y-o-y) from USD 695 per troy ounce in 2015 to USD 614 per troy ounce in 2016 was fully compensated by higher palladium sales volume (up 13% y-o-y) resulting from the sale of metal from temporary stock.
Platinum
In 2016, platinum sales accounted for 9% of the Group’s total metal revenue. The platinum revenue increased by 4% y-o-y (or by USD 23 million) to USD 654 million primarily due to higher volumes of platinum sales (+USD 77 million) which was partly negatively offset by both lower realized platinum price (–USD 46 million) and lower re-sale of platinum purchased from third parties to meet contractual obligations (–USD 8 million).
The revenue from platinum produced in Russia from own feed increased by 6% y-o-y to USD 645 million. The revenue increased despite an 8% y-o-y decline in the average realized platinum price (from USD 1,057 per troy ounce in 2015 to USD 977 per troy ounce in 2016), which was fully offset by the increase in sales volumes (up 15% y-o-y) resulting from the sale of metal from temporary stock.
Other metals
The other metals revenue was up 30% y-o-y (or by USD 98 million) to USD 424 million owing to the increase in gold (up 80%), silver (up 46%) and cobalt (up 15%) revenues which was partly negatively offset by lower rhodium revenue (down 23%).
Increase of revenue from other metals was driven by the physical sale volumes owing to stock sale (USD 103 million), partly offset by lower realized prices (–USD 5 million).
Semi-products
In 2016, semi-products revenue (copper cake and nickel concentrate) increased by 12% y-o-y (or by USD 23 million) to USD 216 million, and accounted for 3% of the Group’s total metal revenue. The increase was mainly driven by higher physical sales to third parties instead of intragroup sales for further processing.
Other sales
In 2016, the other sales revenue of USD 613 million was down by 7% y-o-y primarily due to Russian rouble depreciation against US dollar (negative effect of USD 51 million) and divestiture of non-core assets (negative effect of USD 73 million), which was partly positively offset by the increase of prices of services provided to third parties (positive effect by USD 16 million). Additionally, the other sales increased in real terms (USD 62 million) primarily as result of higher revenue of the Company’s transport subsidiaries.