The Russian steelmaker Novolipetsk Steel (NLMK) has issued the Russian Accounting Standards (RAS) financial results for itself and its subsidiaries for the third quarter of 2009.
Accordingly, due to the higher domestic demand for galvanized and pre-painted steel products, as well as due to the higher exports of cold rolled steel and slabs, in Q3 2009 NLMK's main production site in Lipetsk saw a 37.2 percent quarter on quarter increase in its revenue to Ruble 36.62 billion (approx. $1.25 billion). In addition, NLMK's gross profit from operations at its Lipetsk site went up by 93.95 percent to Ruble 11 billion (approx. $375.7 million), while its operating profit at Lipetsk increased by 341 percent to Ruble 6.57 billion (approx. $224.4 million), both compared to Q2 2009. The profitability growth in Q3 at the Lipetsk site benefited from the increased share of high value-added products in the sales structure coupled with the low cost of production resulting from stable prices for raw materials.
The improvements in the transformer market allowed NLMK's subsidiary VIZ-Stal to double its sales quarter on quarter in the third quarter, resulting in a 70.5 percent increase in its revenue to Ruble 3.25 billion (approx. $111 million), and in a 241.3 percent increase in its net profit to Ruble 822.7 million (about $28.1 million), both compared to Q2 2009.
Meanwhile, the lower quarter-on-quarter sales volumes of iron ore and sinter ore led to a decline of 23.72 percent in the Q3 revenue of NLMK's iron ore subsidiary Stoilensky GOK to Ruble 3.74 billion (approx. $127.7 million), and to a decrease of 21.87 percent in its Q3 net profit to Ruble 1.435 billion (approx. $49 million), both compared to Q2 this year, when the normal average quarterly sales volumes were exceeded due to the considerable sales of stocks from previous periods.
The increased steel production at Lipetsk accounted for 70 percent of product sales by NLMK's coke producing subsidiary Altai-koks. This company's revenue for the third quarter of 2009 amounted to Ruble 4.27 billion (approx. $145.8 million), marking an increase of 16.27 percent quarter on quarter. An increase in coke prices coupled with the lower cost of production, due to lower quarter-on-quarter stock prices and an 80 percent utilization rate, led to a 162 percent increase in Altai-koks' operating profit to Ruble 955.9 million (about $32.65 million). The company's Q3 net profit amounted to Ruble 753.7 million (about $25.7 million), up from its Q2 loss of Ruble 78.37 million (about $2.68 million).
Meanwhile, in the third quarter of this year, NLMK's subsidiary NSMMZ registered a 23.75 percent increase quarter on quarter in its revenue to Ruble 5.879 billion (approx. $200.78 million), and a 112 percent quarter-on-quarter rise in its gross profit to Ruble 723.85 million (about $24.7 million), due to the higher quarter-on-quarter prices and sales, with the seasonal pickup in the construction sector allowing the company to expand its share of high value-added products.
$1 = Ruble 29.2795