Q3 and 9M 2014 NLMK Group Trading update
Q3 2014 highlights
- In Q3 2014, the Group’s capacity utilization rate increased by 2 p.p. to 96%, with capacities at the main production site in Lipetsk running at 100%.
- NLMK Group’s steel output increased by 9.5% q-o-q to 4.131 m t.
- Total sales decreased by 2.4% to 3.741 m t due to the fact that a part of long products was sold through sales channels with longer periods of revenue recognition. At the same time, Steel Segment (flat steel production) sales increased by 6.2% to 3.088 m t. In Q4, we expect Group sales to grow by 3-5% driven by recognition of the respective sales and exports growth.
- Semis sales grew by 11.3% to 1.181 m t, driven by the positive pricing trend in the pig iron market (sales grew to 151,000 t in Q3 vs. 4,000 t in the previous quarter) and planned maintenance works of the hot-rolling mill at the Lipetsk site in September. As a result, rolled product sales reduced by 7.7% q-o-q to 2.56 m t.
- In 9M 2014 NLMK Group steel output increased by 3.9% y-o-y to 11.813m t.
- NLMK Group sales increased by 11.443 m t (+1.6% y-o-y). Sales to the Russian market grew by 15.0% y-o-y to 4.978 m t.
In Q4, we expect steel and rolled product output to decrease insignificantly due to planned maintenance works during the seasonal slowdown in demand in the domestic market, as well as resumed activities to master the production of sections at NLMK Kaluga.