SUEK Group is the number one
producer of thermal coal in Russia.
We benefit from our size and level
of resources and have
one of the lowest
production costs among
coal mining companies.
98.9 MtTOTAL PRODUCTION IN 2014
5.5 BtCOAL RESERVES UNDER JORC CODE
The favourable location of our coal assets
in Russia, with excellent access to transport
links combined with our own trading offices
in different countries and territories,
gives us a significant competitive advantage
in the coal industry.Russian
Our people are the main factor behind our
success as a business and we are proud
to be one of the largest employers in
Russia, providing jobs for 31,400 people.
$70mSPENT ON HEALTH & SAFETY
PROJECTS DURING 2014
position as a leader
In 2014, we continued to demonstrate marked progress in the implementation of our strategic objectives, despite the difficult economic and market environment. We are consistently strengthening our position as a leader of the Russian coal mining industry and one of the leading players in international coal markets.
Chairman of the Board of Directors, JSC SUEK
Leader of the coal industry
The coal mining industry experienced a difficult year in 2014. The sharp drop in global coal prices due to excessive supply in several key markets was exacerbated by deterioration in the Russian economic climate and increased geopolitical tension. Nonetheless, our position as the largest coal producer in Russia and supplier in both Russian and international markets remains strong. As a result of recent investment in the modernisation of our production assets and logistics chain and an extensive programme to improve operational efficiency, we continue to show sustainable growth in key operational indicators and to follow the same growth strategy.
Mission, Vision, Values
Our mission is to help fuel the world by producing coal safely and sustainably whilst delivering value to all our stakeholders.
We accomplish this by:
- Reliably supplying high‐quality coal products to our customers in Russian and international markets
- Building long‐term relationships with suppliers and partners
- Developing the skills and competence of all our human resources
- Contributing to the socio‐economic development of the country and of the communities in the regions where we operate
- Protecting the environment and leading the way in environmental standards
- Creating long‐term value for our stakeholders
Our vision is to be one of the world’s leading coal companies and to remain the largest coal producer in Russia. We will achieve this through:
- Expanding our existing mining and processing assets
- Investing in further development of transportation and logistics and increasing output from deposits located closest to the target markets
- Innovating across our business
The core values of our business are:
- Safety in all our operations
- Social and environmental responsibility
- Leadership in all areas
- Continuous development and improvement
- Financial and operational growth and stability
- Openness with customers and partners
- Professionalism and integrity in everything we do
Many factors contribute to our ability to maintain a leading position in coal mining and supply, both in Russia and internationally. Our business model and strategy have proven their stability over the years and our continued investments in efficiency ensure we remain well positioned for the future. We are aware of our strengths but also acknowledge that we must continually look to improve how we operate – both as a business and as an employer.
Reputation We are a coal company with
a track record as a reliable
supplier with a robust
presence in the Russian
market, as well as in the main
Vast mineral reserves Our extensive reserve base
ensures sustainable supply of
consistently high-quality coal
for our customers.
Favourable geographic position The advantageous location
of our assets in Russia and
their easy access to
infrastructure simplifies sales
to Europe and Asia.
Integrated business model Our vertically integrated
business model enables us to
control the production,
logistics and sales network,
from mining through to
Prudent corporate governance We are committed to high
standards of corporate
governance principles in line
with international good
Operating efficiency Investment in modern,
efficient mining systems has
productivity and is
underpinned by a disciplined
approach to cost control.
Investing in people We pride ourselves in being
the employer of choice in the
coal mining industry in Russia
and strive to develop the
expertise of our employees.
Health and safety We strive to achieve the
highest standards of health and
safety, placing special
emphasis on safety technology
and operational safety in our
Environmental commitment We have introduced and
achieved high environmental
standards including the
sustainable use of natural
resources. We continually
look to minimise the adverse
impact of our operations.
Leaders in fueling the world
SUEK Group is the number one coal producer in Russia – twice the size of our largest Russian competitor. We are also the sixth largest coal exporter in the world and one of the ten largest coal groups by reserves, with an estimated 5.5 billion tonnes under the JORC Code. We have large‐scale open‐pit and underground mines in Siberia and far eastern Russia.
Coal producer in Russia
Coal exporter from Russia
Coal supplier to Russian power
Customers in 36 countries
Employees, 23,200 of whom
are production staff
JORC Reserves. According to
our estimate, the Group is the
top ten largest coal company in
the world by reserves
The Group’s capital expenditure
in 2014. Our investment
programme is one of the largest
among coal companies in Russia
Spent on social and community
projects during 2014
Coal international sales by the world’s leading producers in 2014
Coal production in Russia
Thermal coal supplies in Russia
Well positioned to service
Global reach to key markets
We measure both financial and non‐financial performance in order to determine whether we are on track to achieve our long‐term goals.
In 2014, SUEK Group delivered solid results despite a very challenging market environment, our production increased and sales volumes rose. We also saw EBITDA rise and EBITDA margins grow even though revenue was down mainly due to a fall in the global coal price.
EBITDA margin Measurement: EBITDA is an indicator of the company’s financial performance and is calculated as earnings before interest, taxes, depreciation and amortisation within the calendar year. EBITDA margin is a measurement of the Group’s earnings before interest, taxes, depreciation, and amortisation as a percentage of its total revenue.
Relevance to the business: EBITDA is an important indicator of our financial health and measures our operating profitability. As EBITDA excludes depreciation and amortisation, the EBITDA margin can provide a more accurate view of our profitability.
EBITDA margin is the key financial indicator that demonstrates the Group’s operating profitability and measures success of implementation of its strategy.
Performance: In 2014, increased international coal sales and a decrease in cost of sales in US Dollar terms as a result of Russian Rouble devaluation compensated for the negative effect of the decline in the global coal price on our financial performance. Consequently, in 2014 the company’s EBITDA remained similar to 2013, amounting to $1,044m.
EBITDA margin increased from 19% for 2013 to 21% for 2014, indicating a better performance by the Group despite lower coal prices.
Net debt/EBITDA Measurement: Net debt to EBITDA calculated as the Group’s financial borrowings minus cash and cash equivalents divided by EBITDA.
Relevance to the business: Net debt to EBITDA is a measure of the ability of a company to pay off its debts and demonstrates the financial health and liquidity position of the Group.
Performance: The key financial ratio net debt to adjusted EBITDA as at 31 December 2014 equalled 2.99x, which was still well below the maximum value of 4.0x provisioned by the current loan agreements. These figures demonstrate that the Group had sufficient funds to meet its financial obligations.
Lost time injury
Sales to Russian market
Share of supplies
to Russian market
(tonnes per man-month)
2014 has been another eventful year for SUEK Group. We demonstrated several records across our operations and expanded our geographic reach with the opening of a new Chinese office, incorporating a subsidiary company in Indonesia and opening a new distribution company in Russia. We were also recognised for our achievements and received several prestigious business awards across various sectors.January
Raising a consortium loan
Subsidiary in Indonesia
New distribution operation
in the Altay regionFebruary
World record in
Winning Russian Business
New monitoring and tracking
systems in Kuzbass
World record in
Award for social entrepreneurshipAugust
‘Mining Olympics 2014’October
SUEK PLC’s credit ratingNovember
SUEK Group is praised for reporting quality
JSC SUEK is recognised as a leader in corporate
Vanino Bulk Terminal sets a new recordDecember
New production facility commissioned in Khakasia
New Russian coal production record in Kuzbass
Office opening in China
SUEK Group is a leading, vertically integrated producer of coal, one of the most important energy sources in the world. We create and deliver long‐term value to our shareholders at every stage of our value chain – mining production, processing, transportation, shipment through port facilities, sales and distribution. Our integrated business model enables us to benefit from economies of scale and helps us maintain our status as the leading coal exporter from Russia.
Strategy for growth
Securing our leading position in the industry is an important goal for SUEK Group. We continue to look for opportunities to reinforce our competitive advantage, expand our market share and develop a socially responsible business. To meet these objectives, we have identified five strategy pillars to focus on.
Strategic PrioritiesAchieving high safety standards
We will ensure compliance with the best
international standards in occupational
and industrial safety in all areas where
we operate and we will seek to reduce
injury rates and to prevent fatal accidents.Following the best corporate governance, social and environmental practices
Our current programme of employee
training and development will strengthe
n our reputation as one of the most
attractive employers in the coal mining
industry in Russia.
We plan to continue our investment
in a number of public, educational and
social projects to improve the welfare
of people in the regions where we
operate. In all aspects of our business,
we aim to minimise any adverse impact
on the environment.
Health & Safety
- Attaining the maximum level of industrial safety, occupational safety and health protection of our staff.
- Developing our employees and upgrading their professional skills;
- Improving programmes which motivate staff to improve operational efficiency and to ensure safe operations.
- Employing technologies to reduce the adverse industrial impact on the environment by introducing innovations in coal mining and coal processing.
- Improving the quality of life of those living in the regions where we operate;
- Encouraging sustainable
socio-economic development in these areas by participating in social projects;
- Developing open communication with stakeholders while meeting the
challenges of sustainable development.