• Group revenue in Q3 2018 totalled $3.13 bn (+0.5% qoq, +23% yoy). The decrease in average sales prices was offset by the 1% qoq growth in sales volumes and the increase in the share of HVA products in the Group’s portfolio.
• EBITDA growth by 11% qoq to $1,015 m (+57% yoy) was driven by product portfolio improvements, the drop in coal prices and the weakening of the ruble. Net income grew by 11% qoq (+82% yoy), driven by higher operating profit.
• Q3 free cash flow increased 2.2-fold qoq to $638 m, impacted by the increase in EBITDA, and stable working capital.
• Net debt/EBITDA decreased to 0.25x.

Comment from NLMK Group Deputy CFO Nelli Meshcheryakova: “In Q3 2018, demand for steel products at our key international sales markets remained relatively stable. Russia saw a weakening in activity of rolled product buyers due to high stock levels at large traders. At the same time, the uptick in demand for long products enabled the Company to grow its consolidated sales qoq (growth of long product sales totalled 46% qoq), maintaining high steelmaking capacity utilization rates. “Group revenue totalled $3.1 billion, flat qoq. The decrease in average sales rates was offset by the seasonal growth of consolidated sales and product portfolio improvements. “Company EBITDA was 11% higher than the record level set last quarter, reaching $1,015 m. This is the best result since 2008. This growth was driven by product portfolio improvements, the decrease in coal prices, the weakening of the ruble, and impact from capex projects and operational efficiency programs. EBITDA margin was 32%. “Free cash flow grew 2.2-fold qoq to $638 m, driven by stable working capital, and record-high EBITDA. “Net debt/EBITDA decreased to 0.25x, which is testimony to the Group’s financial stability. This is confirmed by NLMK’s investment grade credit ratings from Fitch, Moody’s and S&P. Moreover, NLMK was awarded a high ruAAA credit rating by RAEX (Expert RA) (see Press Release).”