Despite the tough conditions in the global steel markets, in 2012 NLMK Group demonstrated high operational efficiency. Steel production grew 25% to 14.9 million tonnes, with Russian assets accounting for approximately 95%. Based on year-end results, NLMK became the leading steelmaker in the country – the Group’s Russian assets produced approximately 20% of all steel in Russia.

Group sales hiked 18.4% to 15.2 million tonnes, including +27% for HVA (to 5.1 million tonnes).

In Q4 NLMK Group sales totalled 3.7 million tonnes (-3% q-o-q). Responding to the slump in demand for rolled steel in the export markets, NLMK grew its sales of semi-finished products that enjoyed stable demand.

Outlook

Q4 revenue is expected to decline by c.8% q-o-q resulting from weaker market conditions and seasonal decline in sales at year end. We believe Q1 2013 steel output will remain sequentially flat. The beginning of 2013 brought a mild improvement in pricing due to finished product restocking and a corresponding revival in demand, as well as growth in raw material prices.