In Q3, revenue increased by 19% qoq to $2.2 bn, driven by a 7% qoq growth in sales to 4.2 m t. EBITDA increased by 46% qoq to $673 m; EBITDA margin reached 30% (+5 p.p. qoq), including 18% for NLMK’s international companies. Net income doubled qoq to $385 m. Net debt / EBITDA decreased to 0.4х.
Q3 2016 highlights
9M 2016 highlights
Q4 2016 Outlook
Comment from NLMK Group CFO Grigory Fedorishin:
“In Q3 2016, NLMK revenue grew by 19% qoq to $2.2 bn, driven by the increase in deliveries and the increase in average sales prices; and improvements to the structure of sales. The Group’s local markets, Russia, the EU, and the US, accounted for approximately 66% of steel product sales.
“The increase in the revenue, coupled with operational efficiency gains, supported a 46% qoq increase in EBITDA to $673 m. Group’s EBITDA margin gained 5 p.p. qoq to 30%, hitting its highest since Q2 2010. NLMK Group’s international companies in the US and Europe posted a Q3 EBITDA margin of 18% on the back of improved market conditions, hitting a peak since 2008.
“Gains from operational efficiency programmes (projects not requiring capex), rolled out across all Group sites, totalled $48 m for 9M 2016 vs. 2015.
“In November 2016, Stoilensky is planning to receive the first output of pellets at its new pelletizing plant, the latter covering 100% of the Group’s iron ore pellet needs. This will enable the company to achieve a reduction in steel production costs, consolidating its position as one of the most cost-efficient manufacturers in the world.
“The increase in operating cash flow (+76% qoq) supported a threefold increase in free cash flow qoq to $474 m; and a 37% decrease in net debt vs. the beginning of 2016 to $0.7 bn. Net debt to EBITDA was 0.4х.
“Q3 dividends will be recommended at a meeting of NLMK’s Board of Directors on 17 November 2016.”