Q1 2018 NLMK Group consolidated financial results under IFRS
NLMK Group (MICEX and LSE: NLMK) is pleased to announce an EBITDA growth of 3% qoq to a record $812 m. Q1 2018 free cash flow increased 3-fold qoq to $599 m, driven by strong performance.
Q1 2018 key highlights
- Group revenue in Q1 2018 declined by 1% to $2.79 bn (+30% yoy), due to a seasonal drop in sales(-5% qoq), which was offset by the growth in prices.
- EBITDA grew to $812 m (+3% qoq), driven by the growth in steel prices and new operational efficiency programmes.
- Q1 free cash flow increased 3-fold qoq to $599 m, driven by the growth of profitability, partial release of working capital, and lower investment.
- Net income grew by 17% qoq (+56% yoy), driven by higher operating profit.
- Net debt/EBITDA decreased to 0.31х due to reduction of net debt and growth of profitability.
Comment from NLMK Group Acting CFO Sergey Karataev:
“The growth of sales in the Group's home markets of Europe and US, and an improvement in the pricing environment in international markets enabled NLMK to maintain its revenue practically flat compared to the strong Q4 (-1% qoq), despite a seasonal 5% drop in sales qoq.
“The widening of steel product/raw material price spreads, gains from completed capex projects, and operational efficiency gains were the key drivers behind the growth of EBITDA to a ten-year high of $812 m (+3% qoq). EBITDA margin was 29% (+1 p.p. qoq).
“It’s important to note that Q1 2018 operational efficiency gains totalled $57 m, with the annual target set at $130 m.
“Investments in Q1 decreased vs. the high level at 2017 year-end and amounted to $131 m.
“Business profitability growth, conservative capex and the reduction in working capital supported a 3x qoq increase in the Company’s free cash flow to $599 m, resulting in a Net debt / EBITDA reduction to 0.31х.
“A significant liquidity cushion and a strong balance create favourable conditions for high dividend payments, while maintaining financial stability and conditions for further business development.”
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