30 November 2007
9M 2007 NLMK Group Consolidated Financial Results under US GAAP
OJSC Novolipetsk Steel (NLMK), the LSE listed leading Russian steel producer, today announces its consolidated results for 9M 2007.
Strong 9M 2007 financial results:
- Revenues amounted to USD 5,545.6 million (+29% year-on-year)
- Operating cash flow reached USD 1,979.0 million
- EBITDA* amounted to USD 2,463.2 million (+35% year-on-year); EBITDA margin was 44% (+1 per cent point year-on-year)
- Cash and cash equivalents as of 30 September, 2007 amounted to USD 1,388.5 million
- Disposals of non-core assets in accordance with the Group’s internal restructuring plan:
§ Disposal of stakes in energy assets for USD 78.7 million in February 2007. Proceeds from the transaction were directed to the modernization and development of in-house energy facilities;
§ Disposal of the Company’s 54.88% stake in OJSC Lipetskcombank for USD 47.7 million in June 2007.
- Total capex in 9M 2007 reached USD 616.0 million. In Q3 2007, the major projects under way as part of Phase 2 of the Technical Upgrading Programme were as follows:
§ EUR 23 million contract signed with Siemens VAI (Germany) to supply two new 160 tonne ladle furnaces for BOF production at the Company's main site in Lipetsk. These will substantially expand NLMK’s product mix enabling the Company to better supply the automotive industry, white goods producers and the electrical engineering industry;
§ EUR 33 million contract signed with Sundwig (Germany) to supply an additional pre-painting line, with an annual production capacity of 200,000 tonnes of steel.
Commissioning the group’s third pre-painting line will lift galvanized steel capacity to 1.1 million tonnes, including 0.6 million tonnes of pre-painted steel.
§ Commissioning a new high-tech 300,000 tpy pickling line for hot rolled grain-oriented and carbon steel at the Lipetsk production site. In addition to reducing costs, the company’s wastewater discharge into the Voronezh river will be reduced by 800 tpy (or 8%).
§ Continuous furnace #4 relined increase production capacity of the hot rolling mill. The project capex is around USD 60 million.
- In November 2007, NLMK has entered into an agreement with Tebian Electric Apparatus Stock Co., Ltd (TBEA), the major Chinese transformer producer, to create a joint Russian-Chinese service centre to process (cutting and packing) and sell transformer and dynamo steels in the city of Shenyang, Lyaolin province, China. The service centre project is aimed at increasing sales volumes and service quality in the rapidly developing Chinese transformer steel market.
- At NLMK’s Extraordinary General Meeting held on 28 September, approval was granted for H1 2007 dividends of RUR 1.5 per ordinary share. Funds for dividend payments on Global Depositary Shares (GDSs) were transferred to the depositary bank on 20 November, 2007. The depositary bank makes payment no later than 5 days after the receipt of funds.
Key financials for nine months ended 30 September, 2007