The Russian steelmaker Novolipetsk Steel (NLMK) has announced that in 2010 it registered a 484 percent year-on-year increase in its net profit under US GAAP (Generally Accepted Accounting Principles) to $1.255 billion, with a 36 percent year-on-year rise in revenues, which reached $8.35 billion, driven by recovering prices and growing high value-added product sales as well as by substantial growth in output.
In 2010, NLMK's EBITDA rose by 63 percent year on year to about $2.35 billion and the EBITDA margin further improved reaching 28 percent, five percentage points up year on year. The company's capital expenditure increased by 31 percent in 2010 to $1.463 billion.
Accordingly, NLMK's 2010 steel product sales totaled 11.7 million mt - up 11 percent year on year, with the highest growth registered for domestic market deliveries - up 28 percent year on year to 3.7 million mt on the back of growing demand from the construction and machine-building sectors. The local to international sales ratio changed in favor of the Russian market to 32 percent/68 percent.
In 2010, NLMK's average selling price for steel products was $648/mt - up 26 percent year on year, which largely followed the global market trends. The increase in prices was mainly driven by growing raw material prices forcing steel producers to compensate against growing production costs.
As of 31 December 2010, NLMK's total debt was $2.624 billion while net debt amounted to $1.454 billion.
In 2011, NLMK expects to further increase its output by around 10 percent from the 11.5 million produced in 2010, mainly through the launch of the new blast furnace and convertor scheduled for mid-2011.
In Q1 2011, NLMK expects its sales to remain largely flat at around three million mt, while its EBITDA margin is expected to be in the range of 20-25 percent.