NLMK ups output 3% to 2.9 mln tonnes in Q1
MOSCOW. April 19 (Interfax) - OJSC Novolipetsk Steel (NLMK) increased steel production 3.6% year-on-year to 2.9 million tonnes in the first quarter.
A company statement says that Q1 steel output was down 2.8% from the preceding quarter due to scheduled maintenance and repairs.
The company forecasts Q1 sales revenues of around $2.4 billion and an EBITDA margin of 20%-25%. Initial estimates are that the group's sales in Q2 will exceed those of Q1 thanks to rising demand among product buyers.
"In Q2 2011 we anticipate further growth in production volumes and an improvement in the sales mix towards an increased share of value added products. According to our preliminary estimates, increasing global raw material prices may help to sustain steel prices during the second quarter, which will remain flattish quarter-on-quarter with the possibility of growth in selected grades," NLMK said.
NLMK Group output in Q1 2011 (mln tonnes):
| Q1 2011 | Q4 2010 | Q1 2010 | Q1 2011/Q4 2010 | Q1 2011/Q1 2010 | |
| Pig iron | 2,161 | 2,338 | 2,320 | -7,6% | -6,8% |
| Saleable pig iron | 0,078 | 0,147 | 0,132 | -46,9% | -40,9% |
| Saleable slabs | 0,816 | 1,033 | 0,866 | -21,0% | -5,8% |
| Flat products | 1,503 | 1,400 | 1,438 | 7,4% | 4,5% |
| Long billets | 0,041 | 0,088 | 0,008 | -53,2% | 397,0% |
| Long products | 0,349 | 0,329 | 0,212 | 5,8% | 64,2% |
| Metalware | 0,053 | 0,053 | 0,049 | -0,6% | 8,4% |
| Total output | 2,840 | 3,051 | 2,706 | -6,9% | 5,0% |
The Group's Q1 2011 total sales amounted to 2.8 million tonnes, down 8.7% quarter-on-quarter and up 1.8% year-on-year.
Flat products sales grew by 6% quarter-on-quarter supported by improved demand from the main export markets (Europe, Middle East and South East Asia) and local markets backed by consumers' restocking before the seasonal price growth. Sales of long products grew by 4.4% driven mainly by improved product offering and expanded finished steel capacity after the launch of the new rolling facility in Berezovskiy.
In Q1 the Company increased finished steel output at the expense of slabs offered to third parties as sales of finished steel were more profitable. This factor coupled with a delay in recognition of export sales predetermined a 35% reduction in slab sales during the quarter. The sales of slabs to Steel Invest and Finance (the NLMK and Duferco JV) were flat quarter-on-quarter totaling 322,000 tonnes whilst deliveries to DanSteel increased to 94,000 tonnes (+67%) driven by improved demand from the European thick plates market.
NLMK Group sales in Q1 2011 (mln tonnes):
| Q1 2011 | Q4 2010 | Q1 2010 | Q1 2011/Q4 2010 | Q1 2011/Q1 2010 | |
| Pig iron | 0,153 | 0,077 | 0,094 | 98,2% | 62,0% |
| Saleable slabs | 0,715 | 1,108 | 1,008 | -35,4% | -29,1% |
| Flats | 1,480 | 1,395 | 1,326 | 6,1% | 11,6% |
| Long billets | 0,046 | 0,096 | 0,031 | -52,4% | 47,2% |
| Long products | 0,345 | 0,331 | 0,236 | 4,4% | 46,5% |
| Metalware | 0,054 | 0,053 | 0,048 | 1,4% | 11,7% |
| Total sales | 2,793 | 3,059 | 2,743 | -8,7% | 1,8% |
The NLMK Group includes the Russia-based Novolipetsk Steel Plant, iron ore miner Stoilensky GOK , coke producer Altai Koks, VIZ-Stal and Maxi Group, as well as DanSteel A/S in Denmark and Beta Steel in the U.S. Vladimir Lisin controls 85.9% of shares via Fletcher Group Holdings and LKB-Invest. Management owns 2.8% of shares. The free float is 11.3%.