Russia’s Severstal expects domestic steel usage to fall 6% in 2020

Thursday, 22 October 2020 16:03:11 (GMT+3)   |   Istanbul
       

Russian steelmaker Severstal has announced its financial results for the third quarter and the first nine months of the current year.

Accordingly, in the third quarter of the current year, Severstal registered a net profit of $167 million, decreasing by 57.3 percent compared to the previous quarter, while its sales revenues increased by 17.9 percent compared to the second quarter to $1.87 billion, driven by the recovery of steel prices and growth of steel sales volumes.

Severstal’s EBITDA moved up by 30.9 percent to $656 million in the third quarter this year, when compared to the previous quarter. Meanwhile, the company’s EBITDA margin in the same quarter was 35.0 percent, maintaining the group’s position of having one of the highest EBITDA margins in the steel industry globally. 

In the first nine months of the current year, Severstal registered a net profit of $630 million, falling by 54.8 percent compared to the same period of the previous year, while its sales revenues decreased by 17 percent year on year to $5.24 billion, due to weaker pricing dynamics for steel products and lower sales volumes in this period.

Severstal’s EBITDA moved down by 22.3 percent to $1.71 billion in the first nine months of the year when compared to the same period of 2019, primarily reflecting lower revenues, which were partially offset by a decline in sales costs. Meanwhile, the company’s EBITDA margin in the same period was 32.7 percent, down from 34.9 percent recorded in the first nine months of the previous year.

In the third quarter of the year, global steel demand recovered gradually with the lifting of lockdowns, according to the statement by the company. Severstal said it expects steel consumption in Russia to decrease six percent this year and global steel benchmark prices to remain solid in the fourth quarter. Severstal stated that its low-cost position enables it to sustain competitiveness in the market although there are many potential challenges in both the export and domestic markets, including a second wave of outbreaks of the coronavirus, and they remain confident in the resilience of the company’s business model relative to its local and global peers.


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