ST PETERSBURG, Russia - Norilsk Nickel returned to profit in the first half of 2009 after its first ever loss last year, and the world's largest nickel miner is looking to acquire a core asset in Russia, its CEO said.

Chief executive Vladimir Strzhalkovsky told reporters on Friday the company would use the proceeds from the sale of utility assets to fund any acquisition.

The funds from the sale of utility assets could be spent on the purchase of a certain core asset, Strzhalkovsky said at the St Petersburg Economic Forum. He did not name his target asset.

Norilsk, also the world's largest palladium miner, expects to bring in revenues of $7.5-8.0 billion and core earnings of $1.8-2.0 billion this year, Strzhalkovsky said.

This would be below 2008 revenues of $14.0 billion and adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of $5.8 billion.

The year is more likely to be profitable than 2008, when Norilsk took $4.7 billion in impairment charges to post a net loss of $449 million attributable to shareholders of its parent company.

Though the first half was profitable, Strzhalkovsky said a tough six months could yet lie ahead: The situation could get worse, so the little bit of fat we had in the second quarter could be devoured in the third and fourth quarters.

AUSTRALIAN ASSETS CLOSED

Norilsk has stopped production at all its Australian units due to the sharp fall in nickel prices. Strzhalkovsky said the company had no plans to restart output, but also had no desire to sell the assets at a low price.

We're not looking at relaunching them at the moment, as there is no premise to. When the nickel price is high, perhaps we will relaunch them, he said.

Nickel MNI3 was trading at $14,500 a tonne on Friday, 72 percent below its record high of $51,800 in May 2007.

Strzhalkovsky said he was comfortable with Norilsk's level of debt and the company would reduce its borrowings this year.

We have money and it's set aside for these purposes. There are no complications, he said. We will reduce our debt this year and will not take out any additional loans. (Writing by Robin Paxton and Melissa Akin; Editing by Dan Lalor)

Russia