June 2, 2004 MMC Norilsk Nickel Group Audited Consolidated Annual Financial Statements 31 December...

June 2, 2004

MMC Norilsk Nickel Group Audited Consolidated Annual

Financial Statements 31 December 2003

22003 IFRS Financial Results

Basis of presentation

• The consolidated annual financial statements have been prepared in compliance with with International Financial Reporting Standards (IFRS) and audited by Deloitte & Touche in accordance with ISA

• The presentation currency - the United States of America Dollar


Consolidated income statement

(US Dollars million)Y-o-Y

change2003 2002 %

Metal sales revenues 5 196 3 094 68%

Cost of metal sales (2 870) (1 751)

Gross profit on metal sales 2 326 1 343 73%Gross profit margin 45% 43%

Selling, general and administrative expenses (750) (561)Other operating income/ (expenses) (60) 27

Operating profit 1 516 809 87%

Gains/(losses) on derivative transactions (44) 215 Net finance costs (3) (15)Other non-operating income/ (expenses) (131) (146)

Taxation (493) (286)

Minority interest 16 7

Net profit for the year 861 584 47%Net profit margin 17% 19%

Headline earnings 861 315 173%Percentage of metal sales revenues 17% 10%


Consolidated balance sheet

(US Dollars million)

2003 2002Y-o-Y

change%

ASSETS

Non-current assets 7 578 6 462 17Property, plant and equipment 7 218 6 350 14Other non-current assets 360 112 221

Current assets 3 675 3 277 12Inventories 1 492 1 836 -19Trade accounts and other receivables 426 347 23Other current and financial assets 803 670 20Cash and cash equivalents 954 424 125

Total assets 11 253 9 739 16

EQUITY AND LIABILITIES

Share capital and reserves 8 547 7 305 17

Non-current liabilities 1 080 958 13Long-term borrowings 181 147 23Other non-current liabilities 899 811 11

Current liabilities 1 626 1 476 10Current portion of long-term borrowings 143 74 93Short-term borrowings 122 382 -68Bank overdrafts 173 219 -21Other current liabilities 1 188 801 48

Total equity and liabilities 11 253 9 739 16


Cash at thebeginning of

the year

Cash flow from operating

activity

Cash flow from investing

activity

Cash flowfrom financing

activity

Effects ofinflation

Net cashat the end

of the year*

Consolidated cash flow statement

(In millions of US dollars)

* - Cash is shown net of bank overdraft

205

1 653

(616)

(486)25

781

0

500

1 000

1 500

2 000

788

603 (464)

(625)

(97)205

- 2002 data


150

450

750

1 050

1 350

1 650

1 950

2 250

00.01

.00

30.06

.01

27.12

.01

25.06

.02

22.12

.02

20.06

.03

17.12

.03

3 000

5 000

7 000

9 000

11 000

13 000

15 000

17 000

Ni

Cu

Pd

Pt

Au

Metal prices for joint productsU

S dollars per tonne (Ni)

US

doll

ars

per

ton

(Cu)

; U

S do

llar

s pe

r ou

nce

(Pt,

Pd,

Au)

1 Jan

uary

2001

1 Jul

y 200

1

1 Jan

uary

2002

1 Jul

y 200

2

1 Jan

uary

2003

1 Jul

y 200

3

1 Jan

uary

2004

Source: Bloomberg; LME; LPPM

Platinum (Pt) Palladium (Pd) Gold (Au)Copper (Cu)Nickel (Ni)


Revenues

Sales volume (In millions of US dollars)

13%

4%

23%

54%

6%

Platinum 12%

Gold 1%

Copper 19%Nickel 38%

Palladium 30%

-29%

2001 2002

16%

10%

7%

55%

12%

2003

5 1963 0944 382

+68%


Sales volumes


Including domestic sales 68 131 - - 11360 47 1 27-

TO BE UPDATED

1 673

834

1 304

544

27

1 689

718

187

387

113

2 824

828

640537

367

0

1 000

2 000

3 000

Никель Медь Палладий Платина Золото

2001

2002

2003

133 171 1 3 356

Platinum GoldCopperNickel Palladium


Europe62%

Asia12%

North America13%

Others0%

Russia13%

Europe72%

Asia8%

Russia10%Others

1%

North America9%

Sales by region

2002 2003

Sales volume (In millions of US dollars)

100% = 5 196100% = 3 094


Physical volumes sales

Nickel sales (Tons in thousand)

Copper sales (Tons in thousand)

Norimet & export sales

Domestic sales

Gold sales (In ths ounces)

Norimet & export sales

Domestic sales

214

296

11 12

0

50

100

150

200

250

300

350

2002 2003

70from

inventories

357 370

85 97

0

90

180

270

360

450

2002 2003

966

301

0

300

600

900

1200

1500

2002 2003


Cash operating cost

Cash operating cost(USD in million)

2003 2003 2002 2002Y-o-Y %

changeSMC

consolidation

Polyus full year

Other* excluding SWC,

Polyus and other

consolidated

excluding Polyus

and other

Labour 756 43 27 70 616 545 531 16%

Comsumables and spares 694 16 31 85 563 565 570 -1%

Cost of refined metals purchased 163 0 0 0 163 195 195 -16%

Tax on mining 117 0 18 0 99 42 41 141%

Transportation of metals 117 0 0 0 117 63 63 86%

Scrap copper metals purchased 81 0 0 0 81 38 38 113%

Repairs and maintenance 81 21 0 0 60 45 45 32%

Insurance 71 3 0 0 68 51 51 34%

Utilities 70 7 0 0 63 77 77 -18%

PGM tolling 45 0 0 0 45 47 47 -4%

Tailing pipe maintenance and moving 16 0 0 0 16 36 36 -56%

Sundry 50 10 1 0 39 16 16 144%

TOTAL 2 261 100 77 155 1 928 1 720 1 709 13%

Note: "Other" include P&L charge in respect of pension plans and change in inventory provision.

including


756

9311 032

836

0

250

500

750

1 000

1 250

2002 2003

Cash cost per unit

Production cost of Nickel

(In US dollars per ton) Polar Division

Kola Division

Production cost of Copper

(In US dollars per ton)

2 916

3 9724 465 4 595

0

1 000

2 000

3 000

4 000

5 000

2002 2003Polar DivisionKola Division

Production cost of gold

(In US dollars per ounce)

Polar DivisionKola Division

Polar DivisionZAO Polyus

180

222

113133

0

50

100

150

200

250

2002 2003


252

146131

0

100

200

300

2001 2002 2003

Social Costs

Social costs* (In millions of US dollars)

Note: (*) Social costs include expenses on maintenance of social sphere facilities and donations

-42%

-11%


Change in working capital


2 112

583 649

1 836

347 323

1 492

426 3680

500

1 000

1 500

2 000

2 500

Inventories Trade accounts andother receivables

Trade accounts andother payables

2001

2002

2003-13%

-39% -50%

-19%

+23% +14%

NOTE: 2002 data includes consolidation of last two months results of ZAO Polyus2003 data includes consolidation of last two quarters results of Stillwater

Mining Company and full year results of ZAO Polyus


15 26

1 848

142 67

382176 140 122

0

500

1 000

1 500

2 000

Долгосрочныезаймы

Текущая частьдолгосрочных

займов

Краткосрочныезаймы

2001

2002

2003

Long-term borrowings

Current portion of long-term

borrowings

Short-term borrowings

Debt structure





Capital expenditure in 2003

20022003

118 117

20

45

2823

118

139

32

7162

160

50

100

150

MaintenanceCapEx

Mining Enrichment Metallurgy Energy Infrastructure




June 2, 2004 MMC Norilsk Nickel Group Audited Consolidated Annual Financial Statements 31 December...

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