MOSCOW: Severstal, one of Russia’s biggest steelmakers, said on Thursday its core earnings more than doubled in the first quarter as it benefited from a rebound in metals prices, although the result lagged market expectations. Earnings before interest, taxation, depreciation and amortisation (EBITDA) totalled $578 million, up from $273 million in the first quarter of last year, but below a Reuters poll forecast of $591 million. Chief Executive Alexander Shevelev said Russian steel demand was likely to increase by 1.5-2 percent this year due to the improving domestic economy.
Russian steelmakers such as Severstal and market leader NLMK struggled over the last two years as world steel prices plumbed 11-year lows and Russia’s economic crisis sapped domestic demand, but their prospects have improved as metals prices picked up. They are seen brightening further this year as the Russian economy is expected to return to growth. “Severstal entered into 2017 delivering a robust financial performance supported by high raw material and steel prices,” Shevelev said in a statement. “Overall, we expect 2017 to be a better year for the steel industry globally.” Severstal, controlled by billionaire Alexei Mordashov, reported revenues of $1.77 billion for the first quarter, up 61 percent year-on-year. Net profit totalled $359 million, up 33 percent from the same period last year, the company said, but including a forex gain of $19 million. “Adjusting for this non-cash item, Severstal would have posted an underlying net profit of $340 million,” it said in the statement.
