Severstal posts 51.4 percent increase in net profit for 2018

Tuesday, 05 February 2019 16:19:19 (GMT+3)   |   Istanbul
       

Russian steelmaker Severstal has announced its financial results for the fourth quarter of last year. Accordingly, in the given quarter Severstal registered a net profit of $578 million, rising by 27 percent compared to the third quarter of the year. In 2018, the company’s net profit reached $2.05 billion, increasing 51.4 percent compared to the previous year.

In the fourth quarter of last year, Severstal's sales revenues increased by 1.1 percent quarter on quarter to $2.08 billion, while in the whole year the company’s sales revenues amounted to $8.6 billion, up 9.3 percent year on year, supported by a favorable pricing environment for steel and commodities in 2018 and a two percent annual growth in steel sales volumes.

Severstal's EBITDA moved up by 3.4 percent to $794 million in the fourth quarter when compared to the third quarter, while it increased by 21.9 percent year on year to $3.14 billion in 2018. Meanwhile, the company’s EBITDA margin in the fourth quarter was 38.1 percent, up from 37.2 percent recorded in the third quarter of 2018. In 2018, its EBITDA margin was 36.6 percent, up from 32.8 percent recorded in the previous year.

According to Severstal’s statement, in the fourth quarter of 2018, global steel prices declined in both export and domestic markets due to lower-than-expected construction activity, the risk of trade wars and the slowdown of the Turkish economy. Severstal believes that China’s active environmental policy, and its introduction of selective production restrictions, should support steel prices in 2019. Global demand for steel and raw materials is expected to remain at good levels. Despite some signs of local demand softening, Severstal’s proximity to export routes continues to be a major competitive advantage, giving Severstal the flexibility to quickly redistribute shipments between domestic and export markets to take advantage of higher prices.


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