The Russian steelmaker Novolipetsk Steel (NLMK) has issued the Russian Accounting Standards (RAS) financial results for itself and its subsidiaries for the first quarter of 2009.
Accordingly, in Q1 2009 NLMK's net profit decreased by 98.13 percent to Ruble 139 million (approx. $4.23 million), while its operating profit went down by 95.9 percent to Ruble 400.7 million (approx. $12.2 million), both compared with Q1 2008. The company saw a decrease of 70.7 percent year on year in its gross profit to Ruble 3.97 billion (approx. $121 million), and a decline of 33.4 percent in its revenue to Ruble 25.714 billion (approx. $783.5 million) compared to Q1 2008. The decrease in sales volumes and prices, resulting from weaker demand for steel products, were the main factors leading to the decline in NLMK's financial results in Q1 2009 year on year.
In Q1 2009, NLMK's subsidiary VIZ-Stal also registered decreased financial results due to cuts in export and domestic sales volumes conditioned by the low global demand for transformer steel. In Q1, VIZ-Stal's net profit amounted to Ruble 572.7 million (approx. $17.45 million) - down 75.65 percent, while its revenue amounted to Ruble 1.265 billion (approx. $38.55 million) - down 73.99 percent, both compared to Q1 2008.
Meanwhile, the decline of 53.45 percent year on year in the Q1 2009 revenue of NLMK's iron ore subsidiary Stoilensky GOK to Ruble 2.853 billion (approx. $86.9 million) was due to 30 percent lower sales volumes to the Lipetsk-based production site and lower prices for saleable products. Meanwhile, Stoilensky GOK's Q1 net profit went down by 69.7 percent year on year to Ruble 1.058 billion (approx. $32.23 million).
Altai-koks' revenue for the first quarter of 2009 amounted to Ruble 2.75 billion (approx. $83.77 million), marking a decrease of 56.33 percent year on year. Higher supplies to NLMK's Lipetsk site in Q1 2009 offset lower sales volumes to other customers. As a result, this subsidiary's overall sales volumes remained at the levels of the previous quarter.
Meanwhile, NLMK's subsidiary NSMMZ registered a 39.89 percent decrease year on year in its revenue to Ruble 4.183 billion (approx. $127.5 million).
According to the release, due to the persistent low visibility regarding sales volumes and prices, NLMK deems it premature to provide a financial outlook for future periods. However, the company confirms its estimate for NLMK Group 2009 steel production volumes at around 10 million mt.