NLMK Group is pleased to announce its Q2 and 6M 2016 financial results.
In Q2, steelmaking capacity utilization rates reached 100% (94% in Q1 2016). EBITDA increased by 59% qoq to $460 m; EBITDA margin reached 25% (+7 p.p. qoq). Net debt / EBITDA stood at 0.7.
Q2 2016 highlights:
6M 2016 highlights:
Comment from NLMK Group CFO Grigory Fedorishin:
“In Q2, prices for steel products recovered on a qoq basis on the back of the increase in raw material prices and restocking at customers. Company revenue increased by 19% to $1.9 bn, despite the sales recognition lag in a growing market (for export operations it is up to 2 months after shipment). The bulk of products, up to 67%, was sold in the Group’s local markets: the US, the EU, and Russia.
“As prices recovered from record lows at the end of the year, EBITDA increased by 59% qoq to $460 m. Group EBITDA margin gained 7 p.p. qoq to 25%; EBITDA margin of the Group’s international companies increased to 14%, hitting a peak since 2008.
“Gains from the operational efficiency programme totalled $37 m, or 8% of EBITDA.
“Capex remained at a conservative level, totalling $160 m in Q2, down by 13% yoy. On a qoq basis, capex increased by 33% on the back of active efforts to complete the construction of the pelletizing plant at Stoilensky. The launch of the plant is schedules for the end of Q3 2016.
“Free cash flow totalled $158 m on the back of a high operational cash flow and conservative capex level.
“Due to the payment of dividends in the amount of $324 m in June, net debt as at 30th June 2016 increased by 6% compared to the end of 2015 to $1.16 bn; net debt to EBITDA was 0.7х. NLMK’s debt level remains one of the lowest in the industry.
“We continued to work actively on optimizing our debt portfolio. In June, we redeemed Eurobonds with maturities in 2018 and 2019 for a total of $571 m. This was financed by a new issue of 7-year Eurobonds for a total of $700 m with a coupon rate of 4.5%.
“NLMK’s Annual General Meeting of Shareholders held in June 2016 approved dividends for Q4 2015 in the amount of RUB 2.43 per share; and in the amount of RUB 1.13 per share for Q1 2016. Recommendations for Q2 2016 dividends will be reviewed by NLMK’s Board of Directors on August 12, 2016.”