Russian steelmaker Severstal has announced its financial results for the third quarter and the first nine months of 2013. Accordingly, in the third quarter Severstal registered a net profit of $157 million, down 52.3 percent year on year. In the third quarter of the current year, Severstal's sales revenues decreased by 11.1 percent year on year to $3.2 billion, due to softer prices and sales volumes at Severstal Russian Steel and at Severstal Resources' iron ore units.
During the first nine months, Severstal's net profit decreased by 82.8 percent year on year to $157 million, while the company's revenues saw a decrease of 9.6 percent to $9.9 billion, as a result of lower prices.
Severstal's EBITDA in the first nine months decreased by 18.8 percent year on year to $1.45 billion, as a result of a weaker steel and bulks pricing environment, while its EBITDA margin for the given period was 14.6 percent, down from 16.3 percent recorded in the corresponding period of 2012.
According to Severstal's statement, the company will continue its strong focus on costs and efficiency to continue to enhance its competiveness and deliver sustainable strong performance in all market conditions. In the last quarter of the current year, Severstal expects steel demand to be slightly weaker quarter on quarter in Russia and the US driven by seasonal factors. However, average steel prices will strengthen supported by a bottoming out of European demand. Chinese steel output continues to inch up which will result in oversupply and put downward pressure on prices.
Severstal also anticipates a slight weakening in iron ore prices in the fourth quarter. However, coking coal prices will remain relatively stable with some risk to the upside by the end of the year.