The Russian steel producer Severstal has announced its financial figures for the first quarter of 2009.
Accordingly, in Q1 2009 Severstal's revenue decreased by 30.4 percent compared to the fourth quarter of 2008, and by 36 percent year on year to $2.8 billion, as a result of lower sales volumes and unfavorable pricing. Severstal's cost of sales decreased in value by 31.3 percent quarter on quarter to $2.74 billion, its EBITDA was minus $158 million compared to plus $298 million in Q4 2008, its loss from operations totaled $375 million, while its net loss amounted to $644 million, including a $381 million pre-tax foreign exchange loss.
In addition, Severstal registered an increase in its net debts to $4.872 billion at the end of the first quarter, up from $4.78 million on December 31, 2008.
In its statement the company said that the results reflect a further worsening of the trading environment for steelmakers globally, after the global economic downturn hammered the sector in Q4 2008. In Q1 the prices for rolled steel products fell 33 percent, prices for iron pellets dropped by more than 50 percent, while the prices for coking coal concentrate went down by 28 percent, all compared to Q4 2008. In addition, Severstal noted that the steel prices in its main markets were lower in March and April than in February, but that a pick-up in long steel is likely in June or July.
In Q1 2009, Severstal continued to idle its production capacity and reduce employee numbers, and to exert strict control over capital expenditure.
"We continue to act decisively to reduce fixed costs and improve working capital management, with benefits already coming through in the first quarter. Although we have seen an increase in consumption from restocking in Q1, weak economic conditions continue to affect demand for our products," Severstal CEO Alexey Mordashov stated.
The company said it would not provide any 2009 earnings guidance until "market visibility" improves. The board of Severstal is not recommending payment of a dividend for Q1 2009.