OJSC Novolipetsk Steel (NLMK), the LSE listed leading Russian steel producer, today announces its consolidated US GAAP results for the first half of 2006.

Highlights:

- Strong H1 2006 financial results


Sales revenues were USD2,601.7 million
Cash flows from operating activities were USD527.8 million
EBITDA* margin was 38%
Net profit was USD943.8 million
Cash and cash equivalents USD1,385.6 million as of 30 June, 2006

- Consistent strategy to increase self sufficiency in raw materials:

Acquisition of Altai-koks, the largest independent coke producer in Russia, located in Western Siberia. 
Acquisition of Prokopievskugol, a coal mining company producing high quality coking coal in Western Siberia. 

- Commencement of the second phase of the technical upgrading program (2006-2010). Total value of investments in fixed assets for H1 2006 amounts to USD239.8 million.

- The Board of Directors recommended dividend payment in respect of the first six months of 2006 of RUR1.5 per ordinary share (1 GDS = 10 ordinary shares). The dividend payment is subject for the approval of shareholders meeting on 29 September, 2006. The Annual General Meeting (AGM) held on 6 June, 2006 has approved final dividends for 2005 of RUR2.0 per ordinary share. Including earlier paid interim dividend of RUR1.0 per ordinary share for the first six months of 2005, the total dividend for 2005 is RUR3.0 per ordinary share.

 - Within the framework of the previously announced internal restructuring plan, the AGM approved Mr. Alexey Lapshin as the President of NLMK (Chairman of the Management Board) on 6 June, 2006. The membership of the Management Board was approved by the Board of Directors as advised by the President.

 Financial highlights for the first half ended 30 June, 2006