Severstal posts net loss of $944 mln in H1
MOSCOW. Sept 7 (Interfax) - Severstal posted a net loss of $944 million in the first half of 2009 under International Financial Reporting Standards (IFRS) compared with a net profit of $2 billion in the same period last year, the steelmaker said in its financial statement.
Revenue totaled $5.6 billion and EBITDA measured $161 million.
Capital expenditure in the six months came to $477 million compared with target of $1 billion for 2009.
The company does not plan to pay a dividend for 2009.
Severstal closed the second quarter of 2009 with net losses of $290 million, revenue - $2.85 billion and negative EBITDA - $5 million. Analysts, in a consensus-forecast, said they thought profit would be $267 million, revenue - $2.7 billion and EBITDA - negative $7 million.
Severstal financial highlights ($ mln):
| H1 2009 | H1 2008 | |
| Sales revenue | 5 648 | 10 719 |
| EBITDA | (161) | 2 807 |
| Operating profit | (623) | 2 325 |
| Net profit | (944) | 1 967 |
Severstal has assets in Russia, North America, Europe, Ukraine and Kazakhstan. The general director, Alexei Mordashov, owns more than 82% of the company. The free-float is around 18%.
"The first six months of 2009 was the most challenging period in the last 20 years for both Severstal and the global steel industry," Mordashov said in the financial statement.
"The second quarter marked a turning point for the steel market, after prices reached their lowest levels in May. The combination of better market conditions, increased capacity utilisation and cost saving initiatives resulted in an improvement in performance during Q2," he said.
"Since June, there have been indications of some improvements in our markets, with production volumes and prices increasing so far in Q3 across the Group. Although these developments are encouraging, they remain fragile. A sustained recovery will depend on renewed global economic growth and discipline in production and pricing across the industry. With our very competitive cost structure in Russia, on-going cost saving and rationalisation programmes in our North American and European operations and solid financial position, we have a strong platform from which to compete in our core markets," he said.
Severstal's North American assets closed H1 with negative EBITDA of $479 million. "Management is currently finalising the Group's North American strategy to address what will remain a challenging US steel market. Our goal is to ensure our US business is both profitable and cash positive in the current market environment. We are committed to operating in North America, which is one of the world's most important long-term markets for steel, and will retain our most efficient units with a view to making them even more flexible and efficient," Severstal said.