NLMK releases second quarter RAS financial results

Wednesday, 04 August 2010 16:31:15 (GMT+2)

The Russian steelmaker Novolipetsk Steel (NLMK) has issued the Russian Accounting Standards (RAS) financial results for its subsidiaries for the second quarter of 2010.

Accordingly, due to higher prices and the seasonal improvement in demand, in Q2 2010 NLMK's main production site in Lipetsk saw a 32.7 percent quarter-on-quarter increase and a 75.3 percent year-on-year growth in its revenue to Ruble 46.77 billion ($1.57 billion). Meanwhile, its net profit for the period in question totaled about Ruble 11.688 billion ($392.5 million), a 4.4 times quarter-on-quarter increase, but a 47 percent year-on-year decrease due to the influence of higher 2009 dividends from subsidiaries.

Higher volumes of transformer steel sales to both domestic and exports markets allowed NLMK's subsidiary VIZ-Stal to increase its Q2 revenue by 49 percent to Ruble 2.84 billion ($95.4 million), while its net profit rose by 47 percent to Ruble 646.7 million ($21.7 million), both compared to Q1 2010.

Meanwhile, higher iron ore sales prices led to a growth of 76.9 percent in the Q2 revenue of NLMK's iron ore subsidiary Stoilensky GOK to Ruble 7.6 billion ($255.5 million), with its net profit increasing by 152.3 percent to Ruble 4.25 billion ($142.8 million), both compared to Q1 this year.

NLMK's coke producing subsidiary Altai-Koks saw its Q2 revenue increase by 47.6 percent quarter on quarter to Ruble 8.55 billion ($287.3 million), mainly driven by higher prices for coke and chemical by-products. Its net profit for this period went up by 3.3 times quarter on quarter to Ruble 2.4 billion ($80.5 million).

Seasonal improvement in demand from the construction sector resulted in increased sales volumes and higher prices for steel products, leading to a 47 percent quarter‐on‐quarter rise in NLMK subsidiary NSMMZ's sales revenue to Ruble 6.077 billion ($204.1 million). However, the company still registered a net loss of Ruble 673.4 million ($22.6 million), due to the high debt leverage.

$1 = Ruble 29.78

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