Russian steelmaker Severstal has announced that its net profit declined by 74 percent year on year to RUB 4.06 billion ($51.9 million) in the second quarter of 2026, while its revenue fell by nine percent to RUB 169.56 billion ($2.17 billion) amid lower average steel prices and a higher share of semis in its sales portfolio.
The company’s EBITDA decreased by 38 percent year on year to RUB 24.40 billion ($311.6 million), with its EBITDA margin narrowing by seven percentage points to 14 percent, while its free cash flow stood at a negative RUB 29.82 billion ($380.8 million) due to weaker earnings, working capital outflows and the implementation of its investment program.
In the given quarter, Severstal’s crude steel production rose by 12 percent year on year to 2.80 million mt, while its steel product sales increased by nine percent to 3.03 million mt. Sales of semis surged by 60 percent to 378,000 mt, commercial steel sales rose by seven percent to 1.22 million mt and high value-added product sales increased by one percent to 1.43 million mt.
Commenting on the results, Severstal CEO Alexander Shevelev stated that, although conditions in the Russian steel industry remained challenging, the company had observed initial signs of stabilization during the second quarter, supported by a slight recovery in construction activity in June, infrastructure projects and government programs. He added that domestic hot rolled sheet prices increased by three percent quarter on quarter, while Severstal maintained capacity utilization at close to 100 percent.
In the first half, Severstal’s revenue decreased by 14 percent year on year to RUB 314.88 billion ($4.02 billion), its EBITDA fell by 46 percent to RUB 42.34 billion ($540.6 million) and its net profit dropped by 89 percent to RUB 4.12 billion ($52.6 million), despite a four percent increase in steel product sales to 5.66 million mt.
Mr. Shevelev said that Severstal expects Russian steel consumption to decline by approximately seven percent in 2026, following a 7.5 percent year-on-year contraction in the first half, although demand is anticipated to stabilize gradually during the remainder of the year. Given weak domestic demand and negative free cash flow, the company has decided not to distribute dividends for the first half, allowing it to prioritize strategic investment projects and preserve its long-term financial stability.
