UPDATE 2-Russian steel firm Mechel's Q2 profit misses forecast
* Mechel changes debt covenants* Shares off more than 5 percent (adds share movement, comments from analyst call)By Alfred KueppersMOSCOW, Oct 11 (Reuters) - Russian steel and coking coal producer Mechel missed market expectations with a second-quarter net profit of $192 million, as losses at its steel division weighed on the overall results.The steel operations posted a net loss of $71 million, pushing its overall figure far below the $291 million net profit figure forecast given in a Reuters poll of analysts and also less than the $309 million first-quarter figure."The situation in the second quarter with regard to the steel segment was not the best," vice president for business-planning Oleg Korzhov said during a conference call with analysts on Tuesday.The shares were off 5.1 percent at $10.57 at 1614 GMT in New York.A number of steelmakers in Russia, the world's fifth largest producer, have missed market forecasts recently, including Severstal and Magnitogorsk Iron & Steel Works in August.Mechel also said earnings before interest, taxes, depreciation and amortisation (EBITDA) were $612 million, up from $567 million in the first quarter but short of the $683 million forecast given in the Reuters poll.Second-quarter revenue was up 18 percent on the first quarter at $3.47 billion.Mechel also said its net debt rose to $8.6 billion as of the June 30, up from $7.9 billion at the end of the first quarter.The company was forced to renegotiate debt covenants with lenders, who agreed to raise the company's net debt/EBITDA ratio to 3.5 from the earlier 3.0 level.However, Uralsib analysts noted that the new ratio could also prove challenging."Given trailing 12 months EBITDA of $2.4 bln, Mechel net debt/EBITDA ratio reached 3.6x," they said in a research note.Mechel, controlled by billionaire Igor Zyuzin, is investing heavily in its Elga coking coal mining and railway project in Yakutia.It said on Tuesday it expects to complete the Elga rail line in December.The project's total cost is $2.8 billion, and the deposit holds about 2.2 billion tonnes of coking coal.
