Q1 2017 NLMK Group consolidated financial results under IFRS

NLMK Group (MICEX and LSE: NLMK) is pleased to announce a 19% growth in EBITDA in Q1 2017.

Key highlights

'000 t/$ m	Q1 2017	Q4 2016	QoQ	Q1 2016	YoY
Steel product sales	3,677	3,635	1%	4,126	-11%
Revenue	2,156	1,965	10%	1,577	37%
EBITDA	618	518	19%	290	2.1x
EBITDA margin	29%	26%	+3 p.p.	18%	+11 p.p.
Net profit for the period	323	308	5%	57	5.7x
Free cash flow	208	182	14%	275	-24%
Net debt	938	761	23%	1,048	-11%
Net debt/EBITDA	0.41x	0.39x		0.66x

Growth of revenue: revenue grew by 10% qoq to $2.16 bn driven by higher steel prices and a 1% qoq increase in sales.
Growth of profitability: EBITDA gained 19% qoq to $618 m (+113% yoy). EBITDA margin expanded to 29% (vs. 26% in Q4 2016 and 18% in Q1 2016). Net profit grew by 5% qoq to $323 m.
Growth of cash flow: Free cash flow grew by 14% qoq to $208 m, driven by higher profitability and lower capex. Debt leverage remains low, with Net debt/EBITDA at 0.4.

Comment from NLMK Group acting CFO Sergey Karataev:

“In Q1 2017, NLMK Group was able to grow sales in the EU and US markets against a backdrop of higher internal demand; and to expand export deliveries of flats, offsetting the seasonal weakening in demand in Russia.

“Group’s capacity utilization gained +1 p.p. to 96%; sales climbed by 1% qoq to 3.7 m t.

“Stable sales and the uptick in prices for steel products supported by high prices for raw materials pushed revenue up by 10% qoq to $2.16 bn.

“EBITDA grew by $100 m to $618 m, $57 m attributable to gains from operational efficiency efforts and capex projects vs. the 2016 level. EBITDA margin expanded by 3 p.p. to 29%.

“Profitability growth and moderate capex in Q1 supported a 14% qoq increase in free cash flow to $208 m.

“Debt leverage is at a comfortable level, Net debt/EBITDA at a stable 0.4х.”