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UPDATE 1-Russian steelmaker NLMK beats Q3 expects despite slip in earnings
October 27, 2017 / 9:43 AM / 21 days ago

UPDATE 1-Russian steelmaker NLMK beats Q3 expects despite slip in earnings

(Adds comment, details, background)

MOSCOW, Oct 27 (Reuters) - Russian steelmaker NLMK on Friday beat forecasts despite a 4 percent slide in third-quarter core earnings to $648 million.

That topped the $636 million expected by analysts polled by Reuters.

Controlled by billionaire Vladimir Lisin, NLMK said its net profit fell 8 percent to $357 million.

Quarter on quarter NLMK said core earnings rose 7 percent and net profit rose 4 percent.

NLMK said core earnings benefited from a “widening of spreads between prices for steel products and raw materials” and operational efficiency programmes.

It said net profit in quarter-on-quarter terms was driven by higher returns that offset an increase in expenses related to early repayment of debt.

Its net debt in the third quarter fell to $743 million from $1.045 billion in the second quarter, driven by a 64 percent quarter-on-quarter increase in free cash flow to $533 million.

Steelmakers in Russia, such as market leader NLMK and its closest competitor Evraz, have struggled over the last two years as oversupply helped push world steel prices to 11-year lows.

Russia’s economic crisis also hurt domestic demand.

But prices have picked up and prospects for the sector are expected to improve further this year as the economy is expected to return to growth.

NLMK’s third quarter revenue jumped 15 percent to $2.55 billion. (Reporting by Diana Asonova; writing by Andrey Ostroukh and Denis Pinchuk; editing by Jason Neely)

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