Severstal's Q3 2026 net profit rises 17 percent despite lower steel sales

Russian steelmaker Severstal reported a net profit of RUB 15.17 billion for the third quarter of 2026, up 17 percent year on year, while revenue declined by 3 percent to RUB 173.54 billion as lower sales volumes were partly offset by higher average selling prices and an improved product mix.

Higher prices and cost savings support profitability

The company's EBITDA increased by 13 percent year on year to RUB 39.98 billion, with its EBITDA margin rising by three percentage points to 23 percent, supported by recovering steel prices and cost optimization measures implemented in the first half.

Crude steel production remained broadly unchanged at 2.72 million mt, while steel product sales fell by 9 percent to 2.61 million mt, mainly reflecting reduced pig iron and slab shipments as more material was processed into finished products. High value-added product sales declined by 6 percent to 1.35 million mt, although their share of total sales increased to 52 percent.

Nine-month earnings remain under pressure

In January-September, Severstal's revenue decreased by 10 percent year on year to RUB 488.41 billion, EBITDA fell by 28 percent to RUB 82.32 billion and net profit declined by 61 percent to RUB 19.29 billion. Crude steel output increased by 2 percent to 8.24 million mt, while steel product sales remained broadly stable at 8.26 million mt.

Russian demand outlook improves, seasonal slowdown expected

Severstal CEO Alexander Shevelev stated that Russian steel demand increased by approximately 1 percent year on year in the first nine months, prompting the company to revise its full-year consumption forecast from a 7 percent decline to a decrease of around 0.5 percent. Nevertheless, demand is expected to soften seasonally in the fourth quarter.

The company maintained its 2026 capital expenditure forecast at RUB 112 billion, with key projects, including the Cherepovets pellet plant, scheduled for commissioning in the fourth quarter. Full-year free cash flow is expected to remain negative, while no dividends will be distributed for the nine-month period.