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. Last Updated: 07/27/2016

Costs Push Mechel Profit Down 72%

Metals and mining group Mechel said profit fell 72 percent in 2005, more than expected, as steel prices declined and raw materials costs rose.

Net income plunged to $381.2 million under U.S. generally accepted accounting standards, from $1.34 billion a year earlier, the company said on PR Newswire. Sales climbed 4.6 percent to $3.8 billion, matching expectations.

Mechel, Russia's No. 5 steel producer, said in October it would abandon plans to expand steel output to focus on mining coal, which is used to make steel. The company cut crude steel production by 5 percent to 5.9 million tons last year as prices weakened. It plans to raise annual coal output 60 percent from production in 2004, to 25 million tons by 2010. Export prices for Russian benchmark hot-rolled coil fell 30 percent last year, according to Metal Bulletin.

CEO Vladimir Iorich said in February he would sell his 42.2 percent stake in the company to chairman Igor Zyuzin and hand over his post to chief operating officer Alexei Ivanushkin next year.