Russia's Norilsk Nickel (Nornickel) posted a 77 percent leap in first-half core earnings, with strong global prices offsetting the impact of U.S. sanctions on the company's co-owner.
The results mark the first test of Nornickel's financial health since the United States imposed sanctions in April on aluminium giant Rusal, which holds a 27.8 percent stake in the company.
At $3.1 billion, Nornickel's first-half earnings before interest, tax, depreciation and amortisation (EBITDA) beat expectations. Analysts polled by Reuters on Friday expected core earnings to rise 70 percent year on year to $2.97 billion.
"We enjoyed (a) favourable global commodity markets environment in the first half of 2018," Nornickel president and co-owner Vladimir Potanin said in a statement.
"As a result, average realised prices for all our key metals (except for platinum) rallied in the range of 20-40 percent."
The company said that first-half net profit jumped 81 percent to $1.65 billion, while consolidated revenue increased 37 percent to $5.8 billion.
Shares in the nickel producer were up 1.76 percent on the day, fully recovered from a sharp dip on Friday after news that Russia President Vladimir Putin would consider a proposal to raise further revenue for the state budget from metals and mining companies.
Nornickel, which vies with Brazil's Vale SA to be the world's biggest nickel producer, said it expects the nickel deficit on global markets to widen from 15,000 tonnes to 124,000 tonnes. The company attributed the forecast to a ramp-up in stainless steel operations in Indonesia and robust Chinese consumption.
The company is also the world's top producer of palladium, which in 2017 was its largest revenue generator amid soaring global prices.
"In 2018 we expect that palladium consumption will continue to grow further, predominantly on the back of higher demand," Nornickel said in a statement.
On copper, the company said it expects the market to remain well-balanced in the medium term.
