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. Last Updated: 07/27/2016

Norilsk: 2000 IAS Profit Leapt 132%

Metals and Mining Co. Norilsk Nickel's 2000 revenues restated under international accounting standards jumped 63 percent to $5.43 billion, the company announced Friday, although some analysts said revenues should be adjusted downward to about $4.9 billion.

After-tax profits grew 132 percent to $1.42 billion, according to the company's unaudited statements.

Some analysts said Norilsk's results should be lower since the company used an incorrect exchange rate when converting ruble amounts to dollars.

"According to our methodology, their revenues were about $4.9 billion," said Mikhail Selesnyov, an analyst at United Financial Group.

"It is a positive to see that MMC Norilsk Nickel is able to generate considerable cash flows. At $1.4 billion, their bottom line was at the upper edge of the forecast range," said Vladimir Titkov, metals analyst at Renaissance Capital.

"The negative comes mainly from two facts, that the cost of goods sold rose in dollar terms by 83 percent, while dollar-adjusted inflation was only 17 percent and output growth in physical terms rose a modest 3 percent to 5 percent," he said.

On Friday, company managers explained the surge in costs as a result of the Norimet consolidation, a controversial deal in which Norilsk Nickel acquired the London-based metals trader in a share swap, as well as stockpiling supplies at "advantageous prices."

The company began carrying out a previously announced tax-optimization scheme to liquidate a 17.64 percent stake in MMC Norilsk still held by Norilsk, its former parent company. The shares were transferred to Safiser Investment, an offshore affiliated company in the British Virgin Islands.