The Russian steelmaker Novolipetsk Steel (NLMK) has issued the Russian Accounting Standards (RAS) financial results for its main production site in Lipetsk for the first quarter of 2010.
Accordingly, in Q1 this year, NLMK's Lipetsk production site saw a 37 percent increase in its revenues and a 151.3 percent growth in its gross profit, both compared to the same period last year, due to the improvement in both export and domestic sales coupled with a rise in steel prices.
On a quarter-on-quarter basis, reduced sales volumes resulting from a seasonal decline in demand, particularly for semi-finished products and color-coated steel, coupled with the reduction of average sales prices, were the primary sources for the company's 11 percent decrease in revenue in Q1 2010. In addition, growing raw material prices, as well as increasing tariffs for the services of natural monopolies, put additional pressure on the Lipetsk production site's gross profit in Q1 2010.
Meanwhile, in Q1 2010 the company saw a net profit of Ruble 2.659 billion (about $87.88 million) compared to a loss of Ruble 4.014 billion (about $132.7 million) in Q4 2009, as there were no significant allowances for the devaluation of financial investments and bad debt.
Q1 2010(Ruble thousand) | Q4 2009(Ruble thousand) | Q1 2009(Ruble thousand) | Change Q1 2010/Q4 2009 | Change Q1 2010/Q1 2009 | |
Revenue | 35 256 816 | 39 557 344 | 25 714 204 | -10.87% | 37.11% |
Gross profit | 9 973 386 | 13 591 044 | 3 968 126 | - 26.62% | 151.34% |
Operating profit | 5 087 636 | 8 816 820 | 400 668 | - 42.30% | 13 times |
Net profit | 2 659 440 | -4 014 454 | 138 858 | - | 19 times |
In Q2 this year NLMK expects its main production site in Lipetsk to see an improvement following a seasonal pick-up of activity in the steel market and an ongoing recovery of steel prices. Growing demand for HVA flat-rolled steel will provide an additional driver for financial and operating performance in Q2 2010, said the company in its statement.