NLMK Group sees improved net profit in Q1

NLMK Group sees improved net profit in Q1

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Russian steelmaker NLMK Group has announced its financial results for the first quarter of 2021, according to International Financial Reporting Standards (IFRS).

Accordingly, in the first quarter, NLMK Group’s net profit grew 39 percent quarter on quarter to $775 million, against the backdrop of an increase in gross profit.

The company’s sales revenues in the given quarter amounted to $2.9 billion, up 20 percent quarter on quarter and up 17 percent year on year, supported by growing rolled steel prices and an increase in the share of finished products in the sales structure. 

In the period in question, NLMK Group saw EBITDA growth to $1.2 billion, up 31 percent quarter on quarter and 96 percent year on year, driven by the expansion of the raw materials/steel products price spreads. Meanwhile, its EBITDA margin increased to 41 percent, rising by four percentage point quarter on quarter and 17 percentage point year on year, respectively.

In the first quarter, steel product consumption in Russia decreased by 6 percent quarter on quarter as a result of the high base of the previous quarter, when a deferred demand effect was observed after the decline in April-May 2020.

“In the first quarter of 2021, steel product prices continued to hit new highs due to limited supply coupled with strong demand from end users. Low steel product inventories in the supply chain served as an additional factor supporting price growth. China announcing its intention to reduce steel output in 2021 promoted further improvement of the pricing environment in March and April,” Shamil Kurmashov, CFO of NLMK Group said.

NLMK said that completion of overhauls in the hot-end operations at the Lipetsk site, seasonal recovery of demand on the Russian market, sales of stocks accumulated at the end of the first quarter, and the high level of prices for steel products will have a positive impact on the company’s financial performance.

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