NLMK Group posts 79 percent rise in net profit for Q4

Thursday, 11 February 2021 18:01:34 (GMT+3)   |   Istanbul

Russian steelmaker NLMK Group has announced its financial results for the fourth quarter and the full year of 2020, according to International Financial Reporting Standards (IFRS).

Accordingly, in the fourth quarter last year, NLMK Group’s net profit grew 79 percent quarter on quarter to $558 million, due to an increase in operating profit.

The company’s sales revenues in the fourth quarter amounted to $2.4 billion, up seven percent quarter on quarter and up three percent year on year, supported largely by higher rolled product prices.  

In the period in question, NLMK Group saw EBITDA surge to $890 million, up 54 percent quarter on quarter and 85 percent year on year. This was mainly a result of the expansion of price spreads between raw materials and slabs, due to the recovery of production volumes at Stoilensky GOK, the accrued refund from the US Department of Commerce in line with the settlement agreement reached, and gains from Strategy 2022 projects. Meanwhile, its EBITDA margin increased to 37 percent, rising by 11 percentage point quarter on quarter and 16 percentage point year on year, respectively.

Consequently, in 2020 NLMK Group’s net profit decreased by eight percent year on year to $1.2 billion amid increased losses in its joint ventures’ performance, including due to the recognition of the NBH investment value impairment of $120 million in the second quarter. Without the impact of this non-cash transaction, net profit would have stood at $1.4 billion.

In the meantime, the company’s sales revenues in 2020 fell 12 percent year on year to 9.2 billion, due to a reduction in steel product prices during the third and fourth quarters and an increase in the share of semi-finished products in total sales by five percentage point points to 40 percent. In the same period, NLMK’s EBITDA rose by three percent year on year to $2.6 billion, supported chiefly by its investment programme, a weaker ruble and the above-mentioned refund from the US Department of Commerce following the settlement agreement.  Meanwhile, its EBITDA margin increased by five percentage points to 29 percent.

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