OJSC Novolipetsk Steel (NLMK), the LSE listed leading Russian steel producer, today announces its preliminary results for the year ended 31 December, 2005.

HIGHLIGHTS

- Strong 2005 financial results

• Sales revenues were USD 4,469 million
• Cash flows from operating activities were USD 1,515 million
• EBITDA* margin was 47%
• Cash and cash equivalents USD 1,897 million as at 31 December, 2005
• 65% total dividend increase to USD 0.1063 per ordinary share

- Continued dynamic development through M&A activities

• Acquisition of a license to develop a high quality coking coal deposit, Zhernovskoe-1, scheduled to supply 50% of the company’s needs by 2009
  
• Building up steel rolling capacity in core markets through the acquisition of DanSteel A/S, the Danish steel manufacturer, for USD 104 million
  

- Successful completion of the USD 1.26 billion first phase of the technical upgrading program, bringing NLMK to highly competitive operational level. The Company continues to implement second stage of the program estimated at USD 3.2 billion.

- Successful listing on the LSE representing 7.46%** of the existing issued ordinary share capital, global offering raised USD 609 million, resulting in a market capitalisation of USD 8.7 billion.

- Launch of an internal restructuring plan to optimise the management structure and maximise operational efficiency.

- NLMK received the highest corporate credit ratings among Russian steel companies.

Continued M&A activity in 2006
o Altai Koks, Prokopievskugol
o Lebedinsky GOK, KMAruda

Financial highlights for year ended 31 December, 2005