Russian steelmaker Severstal has announced its financial results for the second quarter and the first half of the current year. Accordingly, in the second quarter Severstal registered a net profit of $469 million, rising 39.2 percent compared to the previous quarter. In the first half, the company's net profit amounted to $806 million, compared to a net profit of $130 million recorded in the corresponding period of the previous year.
In the second quarter of the current year, Severstal's sales revenues increased by 18 percent quarter on quarter to $1.8 billion, mostly due to the appreciation of the Russian ruble leading to higher average selling prices in US dollar and a moderate seasonal rebound in sales volumes in domestic and export markets both in steel and mining divisions. During the first six months, the company’s sales revenues amounted to $3.33 billion, down 20.1 percent year on year, as the impact of lower realized prices was only partially mitigated by moderate increases in sales volumes at Russian Steel and Resources.
According to Severstal, the global steel markets remain under pressure. Despite steel capacity utilization staying at subdued levels of 72 percent compared with 78 percent a year ago, the weakening of the Chinese economy with steel demand falling 5.1 percent year to date and the subsequent growth of steel product exports from China is putting pressure on steel and steel-related commodity prices. The spread between steel and raw material prices has been eroded to minimal levels. In this environment, despite the risks Severstal believes that the company remains in good shape and is well-positioned for the future.