The Russian steelmaker Severstal has announced that in 2009 its Italian subsidiary Lucchini registered a 56 percent decrease in its revenue to $1.757 billion compared to $3.989 billion in 2008.
Accordingly, Lucchini's sales volumes in 2009 were almost half those in 2008, with a significant negative impact on EBITDA, which in 2009 was minus $203 million compared to plus $430 million in 2008. EBITDA was also affected by a less favorable product mix effect, as well as by higher per unit costs, which were only partially offset by cost cutting initiatives.
However, due to the signs of rebound in the European market registered during Q4, Lucchini was able to increase its Q4 EBITDA to plus $9 million from minus $83 million in Q3 2009. The progress made in the European operation was mainly driven by the 45 percent increase in steel production volumes, although prices improved as well. In addition, Lucchini's cost per unit of billet production was 10.1 percent lower quarter on quarter in Q4 due to cost saving initiatives.
"During Q4, we continued to work on the initiatives outlined in our Q3 results announcement with a view to bringing about a sustained improvement in the operational performance of the Lucchini business. Whilst we do not anticipate that material changes in performance will result from these initiatives in the short term, we are encouraged by the improvements in performance delivered in Q4," reads Severstal's statement
"Given our strategic focus on vertically integrated steel operations, we are currently exploring all options to ensure the most appropriate structure for the long-term development of Lucchini."
As SteelOrbis previously reported, on March 4, 2010 Severstal acquired the remaining 20.2 percent stake in Lucchini from the Lucchini family, thus becoming the 100 percent owner of the company. At the same time, Severstal said that it is continuing to look for a buyer for its Italian asset.
"100 percent ownership of this subsidiary will provide Severstal with maximum flexibility in terms of developing strategic alternatives for the business going forward," Severstal noted in its 2009 results statement.