Chelyabinsk Zinc 2007 net profit drops 33 pct

MOSCOW (Reuters) - Chelyabinsk Zinc Plant (CHZNq.L), which produces 60 percent of Russia's zinc, posted a 33 percent decline in 2007 net profit as production costs rose and the value of the anti-corrosive metal declined.

Chelyabinsk said on Monday net profit fell to 1.91 billion roubles ($80.7 million) last year from 2.87 million in 2006, according to International Financial Reporting Standards. Revenue rose 4 percent To 15.53 billion.

The cost of materials and consumables, including raw materials purchased from outside the company for processing, rose 8 percent year-on-year while the cost of utilities and fuel required for production rose 32 percent.

Chelyabinsk said earnings before interest, tax, depreciation and amortisation (EBITDA) fell 24 percent to 3.77 billion roubles and EBITDA margin dropped to 24 percent from 33 percent.

Chelyabinsk Zinc Chairman Sergei Moiseyev said in a statement the company remained on track to raise zinc capacity to 200,000 tonnes per year and to be self-sufficient in raw materials by 2010.

Chelyabinsk produced 165,007 tonnes of zinc and zinc alloys last year, 11 percent more than in 2006. Sales rose 10 percent year-on-year to 147,300 tonnes, with exports accounting for 51 percent.

"The decrease of the U.S. dollar to the Russian rouble entailed lower growth of revenues compared to the growth of sales volumes," the company said in the statement.

Benchmark three-month zinc prices on the London Metal Exchange fell 44 percent over the course of the year.

(Reporting by Robin Paxton; Editing by David Holmes)