MOSCOW, Aug 15 (Reuters) – Russia’s Norilsk Nickel reported a 3 percent fall in first-half core earnings on Tuesday, missing analysts’ forecasts, due to a stronger rouble and a jump in social expenses. The mining giant, known as Nornickel, said “one-off” costs lifted its social expenses to $196 million in the first half from $57 million a year ago.
This included the second tranche of a previously announced investment in a ski resort used in the 2014 Sochi Olympics and the provisional cost of a long-term social agreement with the Zabaikalsky region, where some of its deposits are located.
Its first-half earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 3 percent year on year to $1.7 billion. Analysts polled by Reuters had expected first-half EBITDA at $1.8 billion.
In 2016, some analysts criticised the company’s $250-million investment in the Rosa Khutor ski resort as it is owned by Nornickel’s co-owner Vladimir Potanin. Nornickel invested $150 million in the resort in 2016 and added the remaining $100 million in 2017.
Many Russian business owners tapped their companies’ cash flow for investments in Olympic projects and many Russian privately-owned companies spend money on major national sport projects or support regions where they operate.
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