Adedokun Waliyu 
Nornickel (GMKN.MM), opens new tab reported a first-half profit on Friday that fell 22%, hurt by weak nickel prices, while the Russian miner also grappled with logistical difficulties and issues related to cross-border payments.
Russian companies have reported delays and cancellations of payments for goods with major trading partners such as China, as local banks strengthen their compliance efforts under pressure from Western regulators.
“The decline in nickel and palladium prices, logistical difficulties in the Red Sea, and increased challenges with cross-border payments have had an extremely negative impact on our revenue, profitability, and free cash flow,” Nornickel CEO Vladimir Potanin said.
Nornickel said average nickel price at the London Metal Exchange fell by 28% in the first half of 2024, and the miner forecast a surplus 100,000 tons of nickel in the global markets in 2024/25.
“Unfortunately, the adverse external conditions that Norilsk Nickel faced last year continued to put pressure on our business in the first half of 2024,” Potanin added.
Nornickel’s revenue fell 22% to $5.6 billion in the first half, while its core earnings decreased 30% to $2.35 billion.
The company also trimmed its capital expenditure forecast for 2024 to $3 billion from its prior view of between $3 billion and $3.20 billion.
Nornickel said the share of Asian markets in its exports was unchanged at 52% for the six-month period.
“Amid conditions of the ‘perfect storm’ created by high interest rates on debt instruments and limited access to capital markets, our absolute priorities are maintaining the financial stability of Norilsk Nickel,” Potanin said.
The company’s free cash flow fell 61% to $525 million in the first half of the year.
Last month, Nornickel, the world’s largest producer of palladium and a major producer of refined nickel, reported a 1% drop in nickel output for the first half, but stuck to its 2024 production forecast for both the metals.
Nornickel is not subject to direct Western sanctions, but some Western companies are avoiding dealing with it, hampering its operations.
