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The Moscow Times Moscow Guide – Winter 2008

Since the middle of autumn one of the most important topics of discussion, could only be … no, not the financial crisis… New Year! The winter issue of The Moscow Times Moscow Guide is entirely devoted to New Years celebrations. Seven great ideas for celebrating the “Night of Nights” will help readers finalise their plans and choose how and where to party, give fresh ideas and lots of practical advice.

And don’t forget – problems will come by themselves, but happiness and luck need an invitation. That why the more cheerful and light-hearted your celebration of the coming holiday is, the happier and more successful 2009 will be for you.

The Crisis: Signs of a Kremlin Fearful Of Unrest
Sociologist Yevgeny Gontmakher has painted a disturbing picture of what might emerge from the financial crisis, forecasting continued unemployment, huge protests and spreading violence.

Market Matters: Huge Grain Harvest No Boon for Farmers
This year Russia is enjoying the biggest grain harvest it has ever seen -- and farmers couldn't be more worried.



Thursday, January 08, 2009 Updated at 31 December 2008 22:36 Moscow Time.

The Moscow Times » Issue 4036 » Business

Vladimir Filonov / MT

Strzhalkovsky talking Thursday at a conference, where he said Norilsk would cut investment by $600 billion next year.

Norilsk Profit May Fall 75% in 2009

21 November 2008By Nadia Popova / Staff WriterNorilsk Nickel's profit may fall by as much as 75 percent in 2009 as demand has fallen in the midst of the financial crisis, the firm's chief executive Vladimir Strzhalkovsky said Thursday.

Norilsk, the world's biggest nickel and palladium producer, plans to maintain its current level of production but will only invest $1.3 billion in 2009, about $600 million less than this year, and will close its unprofitable plants abroad, Strzhalkovsky said at a news conference.

Norilsk stockholders will not receive dividends this year, Strzhalkovsky said, breaking with a recent tradition of high dividend payments.

In 2007, Norilsk paid 112 rubles ($4) per ordinary share in dividends and 120 rubles per share in 2006, according to the company's web site.

Norilsk, which has seen its MICEX-listed shares plummet by 75 percent since May and nickel prices tumble to $10,250 per ton from $51,600 per ton last year, posted a net income of $2.7 billion in the first half of this year, 33 percent less than in 2007.

Strzhalkovsky, a former KGB officer and former head of the Federal Tourism Agency, started and finished the meeting — in a manner reminiscent of Soviet-style speeches — by quoting the country's leaders.

"The government will help the economy not only by increasing liquidity … but with tax measures as well, [President] Vladimir Putin has told us all today," Strzhalkovsky said.

A 4 percent reduction in the value-added tax, one of the measures Putin backed at the event, will save Norilsk Nickel $240 million, Strzhalkovsky said with a smile.

His mood changed quickly, however, when he was asked about next year's profit forecast.

"Our profit may fall by up to 75 percent," he said, becoming visibly upset.

"But we can live on our own money. We don't need any expensive loans," he said, adding that the company had already repaid a $400 million syndicated loan from BNP Paribas and Barclays Capital that was due in November.

"We will be tightening our belt," Strzhalkovsky said grimly. The company has cut 220 jobs in its Moscow office but said it would not cut any staff at its production spots.

Norilsk had planned to invest $2 billion this year, but Strzhalkovsky said the sum might be cut by 3 percent to 5 percent.

"Norilsk needs $1 billion a year to maintain its production facilities," UralSib metals analyst Dmitry Smolin said. "The rest will be spent on modernizing worn-out equipment, building new refineries, geological surveys and social programs."

Strzhalkovsky said in an interview published Thursday in Vedomosti that he had suggested to the government that state-owned Vneshekonombank buy United Company RusAl's stake in Norilsk of 25 percent plus two shares.