Severstal IFRS net profits down 18% for Q1
MOSCOW. May 24 (Interfax) - Russian steel major Severstal has reported that first-quarter net profits to International Financial Reporting Standards (IFRS) were down 18% year-on-year at $427 million.
An Interfax consensus forecast had predicted $269 million.
The company's EBITDA (earnings before interest, taxes, depreciation, and amortization) were also down - 30% to $562 million - and the EBITDA margin was 15%. Not counting a one-time write-off of $56.7 million put into reserves, EBITDA was at the consensus forecast level of $611 million.
Sales revenue was up 5.6% at $3.679 billion (forecast: $3.62 billion).
Severstal financial highlights, $ mln:
| Q1 2012 | Q4 | Change, % | Q1 2011 | Change, % | |
| Sales revenue | 3 679 | 3 727 | (1.3%) | 3 483 | 5.6% |
| EBITDA | 562 | 767 | (26.7%) | 798 | (29.6%) |
| EBITDA margin, % | 15.3% | 20.6% | 22.9% | ||
| Operating profit | 385 | 598 | (35.6%) | 643 | (40.1%) |
| Net profit | 427 | 463 | (7.8%) | 519 | (17.7%) |
The company expects demand for steel to rise in Russia in Q2, thanks to the seasonal increase in orders from the construction industry. Export markets will remain problematic as demand slumps in European countries. However, there could be somewhat of a rise in foreign-market prices in Q2 amid rising demand in Middle East countries in the run-up to Ramadan, Severstal says.
Severstal International's EBITDA increased 270% from the previous quarter to $66 million. Severstal anticipates steady demand in the United States through the second quarter.