Russian steelmaker Severstal has announced its financial results for the first half of the current year. Accordingly, in the given period Severstal registered a net profit of $463 million, falling by 48.7 percent compared to the same period of the previous year, while its sales revenues decreased by 20 percent year on year to $3.37 billion, as a result of weaker pricing for steel products and lower steel sales volumes year on year.
Severstal's EBITDA moved down by 25.4 percent to $1.05 billion in the first half of the year when compared to the same period of 2019, primarily reflecting the lower revenues, which were partially offset by a decline in sales costs. Meanwhile, the company’s EBITDA margin in the same period was 31.4 percent, down from 33.7 percent recorded in the first half of the previous year.
In the second quarter of the year, lockdown restrictions throughout the EU and Russia with the spread of the coronavirus pandemic affected global steel demand, according to the statement by the company. Industry experts anticipate global steel demand will decrease by six percent year on year in 2020. However, domestic steel demand is expected to partially recover in the second half of the year, despite a significant drop in the second quarter. Severstal stated that its low cost position enables the steelmaker to sustain competitiveness in the market although there are many potential challenges in both the export and domestic markets, and they remain confident in the resilience of the company’s business model relative to its local and global peers.