Severstal steel giant reports 29 pct net profit drop in Q3 to $429 mln

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Russia's largest steelmaker Severstal posted on Thursday a 28.7 percent net profit drop in July-September 2011, quarter on quarter, to $429 million to IFRS.

Russia's largest steelmaker Severstal posted on Thursday a 28.7 percent net profit drop in July-September 2011, quarter on quarter, to $429 million to IFRS.

The company's revenue grew 8.9 percent in July-September 2011 to $4.772 billion. Earnings before Interest, Taxation, Depreciation, Amortization (EBITDA) rose 1.9 percent to $1.130 billion, while the EBITDA margin decreased by 1.6 percentage points to 23.7 percent.

"Our financial position remains strong with net debt/EBITDA ratio falling to 1.0x, while our cash cushion increased to $1,995 million. Though the global economic landscape remains uncertain and we expect lower orders from customers at the end of the year, in Q1 2012 the market is expecting some positive signs of recovery in the industry," Severstal CEO Alexei Mordashov was quoted in the statement.

The company's cash capital expenditures stood at $600 million in the third quarter of 2011, a 34.5 percent increase compared with the second quarter of this year.

"In Russia, despite relatively strong demand, Q4 2011 is traditionally comparatively weak, so some decrease in consumption is anticipated. In the U.S., we forecast demand to slow in Q4 2011 due to steel market seasonality, especially in the automotive and construction markets," the company also said in the statement.

Severstal's net profit in the first nine months of this year amounted to $1.550 billion after a $225 net loss year-on-year, while its revenue rose 30.8 percent in January-September 2011 to $12.882 billion.

 

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