NLMK Group’s net profit rises in H1

Friday, 23 July 2021 10:42:37 (GMT+3)   |   Istanbul
       

Russian steelmaker NLMK Group has announced its financial results for the second quarter and the first half of the current year, according to International Financial Reporting Standards (IFRS).

Accordingly, in the second quarter, NLMK Group’s net profit grew 75 percent quarter on quarter to $1.4 billion, while the company’s net profit in the first half this year increased by 5.8 percent year on year to $2.1 billion due to gross profit growth and last year’s low baseline effect.

The company’s sales revenues in the second quarter amounted to $4.1 billion, up 44 percent quarter on quarter and up 90 percent year on year, with an increase in steel product prices and production and sales volumes. In the January-June period this year, NLMK’s sales revenues amounted to $7 billion, up by 51 percent year on year, amid higher average sales prices and an increase in the share of finished products in the sales portfolio.

In the second quarter this year, NLMK Group saw EBITDA growth to $2.1 billion, up 76 percent quarter on quarter amid increased sales and wider price spreads, while its EBITDA margin increased to 50 percent, rising by nine percentage points quarter on quarter. In the first half this year, the company’s EBITDA totaled $3.2 billion, increasing by 2.7 percent year on year, due to widening of the steel products/raw materials price spreads and the implementation of the company’s Strategy 2022 projects, while its EBITDA margin in the given period was 46 percent, up by 21 percent year on year. 

“In the second quarter of 2021, steel prices continued to grow across all key markets. In the US and the EU, prices hit new highs. Steel product consumption grew due to the realization of deferred demand and government support measures. Steel capacity utilization rates reached pre-crisis levels as facilities that were stopped during the first wave of the pandemic were relaunched. The outstripping growth in steel consumption relative to production led to a decrease in inventories to all-time lows, which brought about a further increase in prices,” Shamil Kurmashov, CFO of NLMK Group, said.

NLMK said that completion of overhauls in the hot-end operations at the Lipetsk site, the seasonal recovery of demand in the Russian market, sales of stocks accumulated at the end of the first quarter, and the high level of prices for steel products will have a positive impact on the company’s financial performance.


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