Q1 2007 NLMK Group Consolidated Financial Results under US GAAP
Strong Q1 2007 financial results
- Sales revenues amounted to USD 1,750.2 million (+61% YoY)
- Cash flows from operating activities were USD 459.3 million
- EBITDA* amounted to USD 748.1 million (+93% YoY); EBITDA margin 43%
- Cash and cash equivalents USD 898.3 million as of 31 March, 2007
M&A and investment activities. The company continued to implement a dynamic M&A strategy and actively manage its asset portfolio in Q1 2007:
- Disposal of stakes in energy assets for USD 78.7 million in February 2007. According to the decision of the Board of Directors, NLMK’s stakes in energy assets were classified as non-core investments. Proceeds from the transaction will be directed to the modernization and development of in-house energy facilities.
- In April 2007, the Prokopievskugol Group of Coal Companies was sold to a Municipal State Company representing the City Administration of Prokopievsk. The transaction price was USD 1.
- NLMK-Duferco JV has reached an agreement to acquire substantially all the assets of Winner Steel INC. (Pennsylvania, USA) and certain of its liabilities. Winner Steel is one of the largest independent galvanized steel producers in the United States with combined annual capacity of around 1.2 million tonnes. The transaction was closed in June 2007.
The total value of investments in fixed assets for Q1 2007 amounts to USD 173.2 million.
The following major projects were realized under the Technical Upgrading Programme:
- Signing an equipment supply agreement with the Austrian company Andritz AG. Andritz AG will supply two rolling mills, each with 110,000 tpy capacity, for the production of grain and non-grain-oriented steel and new hot-dip galvanizing line with 300,000 tpy capacity.
- Installation of a new coil slitting line with a capacity of 60 tpy. The new equipment will enable the company to introduce a new product – grain-oriented (GO) steel strip, with a width ranging from 80 to 400 mm, and a thickness of 0.23 to 0.30 mm.
- Re-commissioning of a 460,000 tonnes per year coke battery #2 after major renovation at the production site in Lipetsk.
The Annual General Meeting (AGM) held on 5 June, 2007 approved the final dividend for 2006 of RUR 3.0 per ordinary share. Including the interim dividend of RUR 1.5 per ordinary share already paid for the first six months of 2006, the AGM approved the payment of an additional RUR 1.5 per ordinary share. Payment of the dividend on ordinary shares will be made before 3 September, 2007. NLMK will transfer funds for dividend payments on Global Depositary Shares (GDSs) to the depositary bank on 25 July 2007.
Key financials for Q1 2007