The Russian steelmaker Novolipetsk Steel (NLMK) has issued the Russian Accounting Standards (RAS) financial results for itself and its subsidiaries for the second quarter of 2009.
Accordingly, in Q2 2009 NLMK's net profit decreased by 39.5 percent to Ruble 22.323 billion (approx. $728 million), while its operating profit went down by 92.67 percent to Ruble 1.587 billion (approx. $51.76 million), both compared with Q2 2008. The company saw a decrease of 77.84 percent year on year in its gross profit to Ruble 5.672 billion (approx. $185 million), and a decline of 54.73 percent in its revenue to Ruble 26.685 billion (approx. $870 million) compared to Q2 2008. Key drivers of the year-on-year decline in the company's Q2 2009 financial performance were lower sales volumes and depressed prices resulting from subdued demand. However, the higher sales volumes, mainly of slabs and coated steel, coupled with the utilization of lower priced raw materials purchased in 2009 resulted in a 43 percent quarter on quarter rise in gross profit.
In Q2 2009, due to the decline in global demand for transformer steel, NLMK's subsidiary VIZ-Stal registered a 59.2 percent decrease year on year in its revenue and an 89.68 percent decline in its net profit, to Ruble 1. 906 billion (approx. $62 million) and Ruble 241.06 million (approx. $7.86 million) respectively. On the other hand, its Q2 sales volumes of transformer steel grew by 69 percent quarter on quarter due to the transfer of orders for transformer steel from NLMK's Lipetsk production site. In Q3, the company foresees a revival in the transformer steel market, and expects VIZ-Stal's sales volume to increase by 20 percent quarter on quarter.
Meanwhile, the decline of 17.35 percent year on year in the Q2 2009 revenue of NLMK's iron ore subsidiary Stoilensky GOK to Ruble 4.902 billion (approx. $159.9 million) was mainly due to the lower prices for iron ore concentrate and sinter ore. Stoilensky GOK's Q2 net profit went down by 46.29 percent year on year to Ruble 1.799.8 billion (approx. $58.7 million).
Altai-koks' revenue for the second quarter of 2009 amounted to Ruble 3.673 billion (approx. $119.8 million), marking a decrease of 49.9 percent year on year. Altai-koks' Q2 financial performance registered a year-on-year decrease due to lower sales volumes and lower prices of coke products. Meanwhile, on a quarter-on-quarter basis, in Q2 sales revenue at Altai-koks improved due to an increase in sales volumes resulting from increased steel production at NLMK's Lipetsk site coupled with the decommissioning of two coke batteries at the Lipetsk site's coke operations.
Meanwhile, NLMK's subsidiary NSMMZ registered a 60.42 percent decrease year on year in its revenue to Ruble 4.751 billion (approx. $155 million).
$1= Ruble 30.66