Severstal posts lower net profit for Q1

Monday, 29 April 2019 17:25:24 (GMT+3)   |   Istanbul

Russian steelmaker Severstal has announced its financial results for the first quarter of the current year. Accordingly, in the given quarter Severstal registered a net profit of $428 million, falling by 7.2 percent compared to the same quarter of the previous year.

In the first quarter, Severstal's sales revenues decreased by 6.5 percent year on year to $2.03 billion, as a result of weaker pricing for steel and lower steel sales volumes on year-on-year basis.

Severstal's EBITDA moved down by 6.1 percent to $663 million in the first quarter when compared to the same quarter of 2018, primarily reflecting the lower revenues which were partially offset by a lower cost of sales. Meanwhile, the company’s EBITDA margin in the first quarter was 32.6 percent, up from 32.5 percent recorded in the first quarter of 2018.

According to Severstal’s statement, in the first quarter steel this year product sales increased by three percent quarter on quarter to 2.84 million mt, following short-term maintenance works at rolling-mill facilities in the previous quarter. The share of domestic sales rose to 65 percent due to the increased attractiveness of domestic sales. Severstal increased production of color-coated and galvanized products following the launch of new product lines, which reached their full utilization rates in the first quarter of 2019.

In the second quarter, Severstal expects its financial results to be positively impacted by seasonal construction recovery in China and Russia, as well as by the effect of higher iron ore prices in the first quarter. Steel demand in Russia is expected to grow by one percent in 2019, supported by increased consumption in the automotive and energy industries. 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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