In its financial results according to International Financial Reporting Standards (IFRS) for the third quarter of the current year, Russian steelmaker NLMK Group's net profit decreased by 47 percent year on year to $343 million, following the drop in operating profit and pressured by the higher effective income tax rate. The company's sales revenues amounted to $2.58 billion in the third quarter, down 18 percent year on year, due to lower sales volumes against the backdrop of ongoing overhauls at NLMK Lipetsk blast furnace and basic oxygen furnace operations. Additionally, revenue was affected by the downward price movement in the international steel markets.
In the third quarter of this year, NLMK Group's EBITDA was $654 million, falling by 36 percent year on year, while its EBITDA margin decreased to 25 percent compared to 32 percent in the corresponding period of the previous year, mainly due to the narrowing of the spread.
Meanwhile, in the first nine months of the year, the company’s net profit totaled $1.14 billion, decreasing by 34 percent, while its sales revenues totaled $8.24 billion, down by nine percent, both year on year. In the same period, the company’ EBITDA amounted to $2.08 billion, falling by 24 percent as compared to the same period of the last year.
NLMK expects steel output to increase following the completion of overhauls at NLMK Lipetsk blast furnace and basic oxygen furnace operations, with the Lipetsk site reaching planned output of 12 million mt in 2019.
“In the third quarter of this year, we saw the situation in the steel markets aggravate due to a weakening in demand and the resulting decline in steel prices, amid an economic growth slowdown in the company’s key international sales regions,” said Shamil Kurmashov, NLMK Group’s CFO.