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22 Jan 2010 10:20
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NLMKΒ Q4Β 2009 Trading Update
NLMK (Novolipetsk Steel) (LSE: NLMK) today announces the following regular trading update forΒ Q4 2009.
NLMK Group:Β FY2009 andΒ Q4 2009 operating highlightsΒ 1
- ProductionΒ FY20092*
- Crude steel: 10.6 million tonnes (+1%Β year-on-year)
-Β FinishedΒ products: 10.6Β million tonnes (-0.3%Β year-on-year)
- ProductionΒ Q4Β 2009*
- Crude steel: 2.9Β million tonnes (-2%Β quarter-on-quarter)
-Β FinishedΒ products:Β 2.9Β million tonnes (-3%Β quarter-on-quarter)
- SalesΒ FY2009
- SalableΒ products:Β 10.6 million tonnes (+3%Β year-on-year), including
- SalesΒ Q4 2009
- SalableΒ products: 2.8 million tonnes (-12% quarter-on-quarter), including
-Β Slabs: 0.9Β million tonnes (-14% quarter-on-quarter)
-Β Flat products: 1.3Β million tonnes (-10% quarter-on-quarter)
-Β Billets: 0.08Β million tonnes (+37% quarter-on-quarter)
-Β Long products: 0.3 million tonnes (-26% quarter-on-quarter)
-Β Metalware: 0.04 million tonnes (-25% quarter-on-quarter)
.OutlookΒ
InΒ Q1 2010Β we expectΒ thatΒ steelΒ productionΒ willΒ amountΒ toΒ 2.8Β million tonnesΒ remaining flat quarter-on-quarter.Β
InΒ Q1 2010 the Group's financial performanceΒ will beΒ supported by growing steel pricesΒ onΒ bothΒ the international and domestic markets.Β Β
* - NLMK Group's and NLMK's (Lipetsk productionΒ site) steel production volumes please seeΒ inΒ Appendix
Disclaimer:
This announcement may contain a number of forward-looking statements relating to, among others, the financial condition and results of operations of the Company. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by them and are based on assumptions regarding the Company's present and future business strategies and the environment in which the Company and its subsidiaries operate both now and in the future. Forward-looking statements speak only as at the date of this announcement and save as required by applicable legal and/or regulatory requirements the Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements.NLMKΒ Group:Β
NLMK Group Q4Β 2009 sales volumes2:Β
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Pig Iron |
Β |
0.233 |
0.221 |
5.3% |
0.048 |
381.7% |
0.559 |
0.616 |
-9.3% |
|
|
Slabs |
Β |
0.912 |
1.063 |
-14.2% |
0.764 |
19.4% |
3.443 |
3.108 |
10.8% |
|
|
Flats |
Β |
1.262 |
1.409 |
-10.4% |
0.760 |
66.0% |
4.922 |
4.769 |
3.2% |
|
|
Billets |
Β |
0.082 |
0.060 |
36.7% |
0.110 |
-25.0% |
0.271 |
0.541 |
-49.8% |
|
|
Long products |
Β |
0.271 |
0.364 |
-25.7% |
0.168 |
61.1% |
1.228 |
1.090 |
12.7% |
|
|
Metalware |
Β |
0.043 |
0.058 |
-25.3% |
0.032 |
34.3% |
0.187 |
0.145 |
28.8% |
|
|
Total sales products |
Β |
2.804 |
3.175 |
-11.7% |
1.882 |
48.9% |
10.611 |
10.270 |
3.3% |
MainΒ production site in Lipetsk
Β Lipetsk production siteΒ Β steel sales volumes in Q4Β 2009:Β
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Pig Iron |
Β |
0.163 |
0.229 |
-29.0% |
0.062 |
163.4% |
Β |
0.503 |
0.636 |
-20.9% |
|
Slabs |
Β |
1.047 |
1.073 |
-2.4% |
0.776 |
34.9% |
Β |
3.625 |
3.511 |
3.2% |
|
Hot-rolled steel3 |
Β |
0.473 |
0.564 |
-16.1% |
0.217 |
117.7% |
Β |
1.933 |
1.594 |
21.3% |
|
Cold-rolled steel |
Β |
0.405 |
0.454 |
-10.8% |
0.237 |
70.7% |
Β |
1.515 |
1.435 |
5.6% |
|
Hot-dip galvanized steel |
Β |
0.103 |
0.107 |
-4.5% |
0.082 |
24.4% |
Β |
0.325 |
0.423 |
-23.0% |
|
Pre-painted steel |
Β |
0.096 |
0.097 |
-0.7% |
0.061 |
57.9% |
Β |
0.331 |
0.340 |
-2.7% |
|
Dynamo steel |
Β |
0.047 |
0.042 |
11.2% |
0.051 |
-8.1% |
Β |
0.160 |
0.315 |
-49.3% |
|
Transformer steel |
Β |
0.010 |
0.004 |
154.1% |
0.037 |
-73.0% |
Β |
0.032 |
0.160 |
-80.2% |
|
Total sales products |
Β |
2.343 |
2.570 |
-8.8% |
1.524 |
53.8% |
Β |
8.424 |
8.412 |
0.1% |
DanSteelΒ A/S.Β
DanSteel A/S sales volumesΒ in Q4Β 2009:
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
ThickΒ plates |
Β |
0.052 |
0.045 |
15.6% |
0.110 |
-53.0% |
Β |
0.219 |
0.504 |
-56.5% |
BetaΒ SteelΒ Corp4
BetaΒ Steel Corp. sales volumes in Q4Β 2009:
|
Million. t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Hot-rolled steel |
Β |
0.101 |
0.128 |
-21.3% |
0.017 |
503.3% |
Β |
0.367 |
0.408 |
-10.1% |
|
Slabs |
Β |
0.010 |
0.014 |
-28.7% |
0.000 |
Β |
Β |
0.024 |
0.000 |
Β |
VIZ-StalΒ
VIZ-Stal sales volumes in Q4Β 2009:
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Transformer steel |
Β |
0.038 |
0.036 |
6.4% |
0.042 |
-10.1% |
Β |
0.101 |
0.183 |
-44.9% |
Stoilensky
Stoilensky sales volumes in Q4Β 2009:
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Iron ore concentrate |
Β |
2.941 |
2.927 |
0.5% |
1.833 |
60.4% |
Β |
11.875 |
10.592 |
12.1% |
|
Sinter ore |
Β |
0.510 |
0.545 |
-6.4% |
0.147 |
246.9% |
Β |
1.996 |
1.299 |
53.7% |
Altai-koks
Altai-koks sales volumes in Q4Β 2009:
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
CokeΒ (dry) |
Β |
0.785 |
0.877 |
-10.4% |
0.551 |
42.4% |
Β |
3.043 |
3.249 |
-6.4% |
Long products division companies5
Q4 2009 sales volumes of the companiesΒ enteringΒ theΒ LongΒ products division:
|
Million,Β t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Billets |
Β |
0.067 |
0.069 |
-3.6% |
0.077 |
-13.0% |
Β |
0.240 |
0.541 |
-55.7% |
|
Rebar |
Β |
0.179 |
0.288 |
-37.9% |
0.199 |
-10.4% |
Β |
0.902 |
0.977 |
-7.6% |
|
Wire rod |
Β |
0.049 |
0.078 |
-37.7% |
0.047 |
3.6% |
Β |
0.217 |
0.204 |
6.5% |
|
Metalware |
Β |
0.043 |
0.058 |
-25.3% |
0.032 |
34.3% |
Β |
0.187 |
0.145 |
28.5% |
|
Ferrous and nonferrous scrapΒ 6 |
Β |
0.610 |
0.899 |
-32.1% |
0.497 |
22.7% |
Β |
2.446 |
2.703 |
-9.5% |
1Β Q4Β 2009 production and sales data is preliminary and subject to further update
2Β Excluding inter-group operations and including sales of trading companiesΒ
3Β Including hot-rolled pickled steelΒ
4Β Beta Steel was consolidatedΒ sinceΒ November 2008.Β Beta Steel sales given for theΒ 12MΒ 2008Β forΒ comparisonΒ purposes
5Long products sector includes the following companies: NSMMZ,Β BEMZ, UZPS and scrapΒ collecting facilities
6Β Including sales of NSMMZΒ
Β Β MANAGEMENT COMMENTSΒ
NLMK Group Operating Review
NLMK Group's steel production in 2009 amountedΒ toΒ 10.6 million tonnes which corresponds to 2008 production levels. The Group was able to maintain high production volumes in the post-crisis period primarily due toΒ theΒ timelyΒ launchingΒ ofΒ theΒ blast furnacesΒ that wereΒ stopped in 2008Β and consolidating BetaSteel Corp as part of the NMLK Group. In Q3 2009 NLMKΒ managedΒ toΒ exceed pre-crisis steel production volumesΒ mainly due toΒ low production costsΒ andΒ an activeΒ sales policyΒ pursuing profit maximization.Β The overall utilization rateΒ ofΒ Group'sΒ steelmaking operationsΒ reached 93% in 2009.Β
In Q4 2009 the Group produced 2.9 million tonnes of steelΒ representing a sequential decline of 2%Β which is in line withΒ the previously planned volume.Β TheΒ production facilitiesΒ were run at approximately 87%Β capacity, including our main production site in Lipetsk, where utilizationΒ rate reachedΒ 99%, and theΒ LongΒ products divisionΒ operations, where utilizationΒ rate grew toΒ 73%.Β
The Group's totalΒ steelΒ product sales amounted to 2.8 million tonnes, a 12% decrease quarter-on-quarter and a 49% increase year-on-year. Improved results compared toΒ theΒ last year are due to low sales volumes in Q4 2008 caused by theΒ weakΒ steel market conditions.
Q4Β 2009Β slab sales toΒ DufercoΒ JV companies increased by 17% quarter-on-quarter representingΒ approximately 38% of the total slabΒ sales.Β In 2009 ourΒ sales toΒ DufercoΒ JV companies totaledΒ overΒ 1,214,000Β tonnes of slabs.
The main factors influencingΒ theΒ sales dynamics in Q4 included both active deliveries in Q3 2009, some of which had an impact on Q4 according to the production/sales cycle, andΒ the regularΒ seasonal decline in demand for steel products.Β
Our sales geography remained largely unchanged from Q3 2009.Β In Q4 2009 the company's domestic sales reached 28%. SalesΒ to Europe grew modestly as a result of an increased level of supplies to EuropeanΒ assets ofΒ Duferco JV. Sales to South East Asia were lower quarter-on-quarter.
MainΒ productionΒ site in LipetskΒ
Despite challenging market conditions, steel production in 2009Β remained unchanged from theΒ previousΒ year level. Average run rates over the year amounted to 93%,Β which is lowerΒ thanΒ usualΒ due to theΒ temporary stoppage of furnaces at theΒ endΒ of theΒ lastΒ year.
In Q4Β 2009Β production in Lipetsk grew toΒ 2.4 million tonnes, aΒ 2%Β increaseΒ quarter-on-quarter.Β Β
In Q4 2009, sales volumesΒ reachedΒ 2.8 million tonnes,Β aΒ 9%Β decreaseΒ quarter-on-quarter due to theΒ seasonal declineΒ of demand from finalΒ customers.Β However,Β Q4 2009Β sales volumes increasedΒ 54% year-on-year.Β
There were no significant changes in our sales structure compared to Q3 2009.
Demand for flatΒ productsΒ (and pre-painted steel in particular) on the domestic market remainsΒ stableΒ which is partially attributable to the traders' intentions to replenish steel stock before the next season.Β
Transformer steel sales growth in Q4 2009 is primarily driven by launching production facilities stopped for repairΒ at Lipetsk plantΒ in April 2009. Despite the restored production,Β theΒ total run rate of the transformer steel line is relatively low due to weak market activity.
Favourable market conditions on international markets allowedΒ maintainingΒ high levelΒ of slabs, hot-rolled and cold-rolledΒ deliveries to the export market. Q4 2009 export sales representedΒ 75% of total volumes.
DanSteel A/S
InΒ 2009 reduced demand for thick plates resulted in a 57% decrease in production and sales volumes year-on-year.Β Though,Β demand and stockΒ beganΒ to restore graduallyΒ starting fromΒ Q3 2009.
Following annual repair activities in Q3 2009, thick plate production increased by 48% and reached 53,000Β tonnesΒ in Q4 2009.Β
Demand remainsΒ lower thanΒ historical rates. However, partial market recovery allowedΒ the companyΒ toΒ increase Q4 sales by 16% quarter-on-quarter.Β
Q4 2009 pricesΒ forΒ thick plates sequentiallyΒ decreasedΒ by 2%.
Beta Steel Corp.
Steel production in 2009 amounted to 378,000Β tonnes, a 13% decrease year-on-year.Β Β
TheΒ 21%Β quarter-on-quarter decrease in salesΒ reflected the seasonal declineΒ inΒ demandΒ and totaled 101,000 tonnes.Β
Prices for hot-rolled steelΒ demonstrated a sequential increase ofΒ 10% in Q4 2009.
VIZ-Stal
Excessive transformer steel stock in the world at the beginning of 2009 resulted in reduced production and sales.Β
In 2009Transformer steel productionΒ decreasedΒ 46% year-on-year.Β Β
Transformer steel sales in Q4 reached 38,000Β tonnes,Β which is in line withΒ theΒ previous quarter volume (a 6% increase). StableΒ demand in H2 2009 allowedΒ the company to increase its sales byΒ 165%Β comparedΒ toΒ H1 2009Β sales. In Q4Β theΒ utilization rateΒ reachedΒ 76%.Β Exports represented approximately 80% of total sales portfolio.Β
Market conditions and lowerΒ USD/RUR FX rate contributed to price declineΒ of 12%Β in Q4 2009. Β
StoilenskyΒ
Throughout 2009Β iron oreΒ production dynamics largely corresponded toΒ theΒ Lipetsk production site run rate. Total iron ore concentrate and sinter ore production in 2009Β decreasedΒ 4% year-on-year.
In Q4 2009,Β sales of iron ore concentrate and sinter ore were 2.9 million tonnes and 0.5 million tonnesΒ respectively, whichΒ corresponds to the previous quarter level.Β InΒ Q4 2009Β thirdΒ party sales totaledΒ 134,000Β tonnes.
Altai-koks
In 2009 total coke sales reduced by 6% to 3.043 million tonnes. An insignificant quarter-on-quarter decrease in coke production and sales (-10%)Β wasΒ driven mainlyΒ by a seasonalΒ decline in demand.Β
Long products divisionΒ
In 2009 steel production decreased to 1.7 million tonnes (-11% year-on-year), largely due toΒ slowΒ activity in theΒ construction sector. H1 2009 saw the most significant decrease,Β whenΒ Β salesΒ fellΒ 30% year-on-year. However, demand picked up in H2 2009,Β lifting sales.
In Q4 2009 steel production reduced to 0.4 million tonnes (-15%) due toΒ theΒ seasonal decline in demand.Β
The seasonal decline in demand from the construction sector on the domestic market resulted in a weaker pricing environment andΒ Β a decrease in the share of high value added products, such as wire rod and metalware, by 38% and 25% respectively. Seasonal decline in demand from the construction sector andΒ tradingΒ companies also led toΒ lowerΒ rebar sales by 38% (179,000Β tonnes).Β
Exports accounted for approximately 32% of total Q4 2009 sales of ourΒ LongΒ products division. Conducive export market conditions allowedΒ the companyΒ to preserve billet sales at almost the same level quarter-on-quarter (67,000Β tonnes in Q4 2009).
The fall in scrap sales in Q4 2009 is related to lower scrap collection in the winter period.Β
Prices on main products fell insignificantly, from 2% to 7%. Billet prices grew by 6%Β driven byΒ relatively high demand on export markets.
Outlook
We believeΒ thatΒ Q4Β 2009 revenue willΒ preliminarily increase overΒ USD1.7 billion,Β and the EBIDTA margin will be in the range of 25-30%.Β
In Q1 2010Β we expect an insignificant reduction in production and salesΒ volumesΒ driven mostly by a seasonal decline in demand.Β Within the period of low demand the Group companies will perform repair works at main production facilities.
Q1 2010 financial performanceΒ will beΒ driven byΒ positiveΒ steel price dynamicsΒ both on theΒ internationalΒ and domestic markets.Β
For more information:Β
NLMK
Investor Relations
+7 495 915 1575
Email: st@nlmk.comΒ
Financial Dynamics
Β Jon SimmonsΒ
Tel: +44 207 831 3113
Email: jon.simmons@fd.com
APPENDIX
NLMKΒ GroupΒ Q4 2009Β productionΒ volumes7:
|
Million, t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4Β 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Pig Iron |
Β |
2.374 |
2.384 |
-0.4% |
1.367 |
73.7% |
Β |
8.476 |
8.408 |
0.8% |
|
Slabs |
Β |
2.886 |
2.940 |
-1.8% |
1.756 |
64.4% |
Β |
10.614 |
10.500 |
1.1% |
|
Commercial pig iron |
Β |
0.170 |
0.229 |
-25.7% |
0.062 |
175.8% |
Β |
0.510 |
0.636 |
-19.7% |
|
Commercial slabs |
Β |
1.019 |
0.878 |
16.1% |
0.482 |
111.5% |
Β |
3.420 |
3.093 |
10.6% |
|
Flats |
Β |
1.311 |
1.411 |
-7.1% |
0.862 |
52.0% |
Β |
5.020 |
5.005 |
0.3% |
|
Billets |
0.075 |
0.064 |
17.0% |
0.071 |
6.0% |
Β |
0.268 |
0.542 |
-50.6% |
|
|
Long products |
0.273 |
0.338 |
-19.2% |
0.232 |
17.7% |
Β |
1.176 |
1.196 |
-1.6% |
|
|
Metalware |
Β |
0.043 |
0.061 |
-29.5% |
0.033 |
29.9% |
Β |
0.190 |
0.146 |
30.1% |
|
Total production |
Β |
2.892 |
2.982 |
-3.0% |
1.742 |
66.0% |
Β |
10.583 |
10.617 |
-0.3% |
NLMK (Lipetsk production site) steel production volumes in Q4 2009:Β
|
Million, t |
Β |
Q4Β 2009 |
Q3Β 2009Β |
Q4 09 /Β Q3 09Β |
Q4Β 2008Β |
Q4 09 /Β Q4Β 08Β |
Β |
2009 |
2008 |
Β 2009 /Β 2008Β |
|
Β |
Β |
|||||||||
|
Pig IronΒ |
Β |
2.374 |
2.384 |
-0.4% |
1.367 |
73.7% |
Β |
8.476 |
8.408 |
0.8% |
|
Steel |
Β |
2.352 |
2.295 |
2.5% |
1.373 |
71.3% |
Β |
8.507 |
8.514 |
-0.1% |
|
Slabs |
Β |
1.084 |
0.908 |
19.4% |
0.591 |
83.3% |
Β |
3.598 |
3.612 |
-0.4% |
|
Hot-rolled steel8 |
Β |
0.493 |
0.561 |
-12.2% |
0.261 |
88.5% |
Β |
2.023 |
1.719 |
17.7% |
|
Cold-rolled steel |
Β |
0.410 |
0.438 |
-6.4% |
0.249 |
64.5% |
Β |
1.546 |
1.494 |
3.5% |
|
Hot-dip galvanized steel |
Β |
0.113 |
0.112 |
0.6% |
0.088 |
27.5% |
Β |
0.350 |
0.450 |
-22.2% |
|
Pre-painted steel |
Β |
0.094 |
0.093 |
1.7% |
0.066 |
41.8% |
Β |
0.333 |
0.357 |
-6.7% |
|
Dynamo steel |
Β |
0.047 |
0.042 |
12.9% |
0.045 |
6.0% |
Β |
0.162 |
0.318 |
-49.2% |
|
Transformer steel |
Β |
0.010 |
0.004 |
165.6% |
0.038 |
-74.1% |
Β |
0.029 |
0.163 |
-82.5% |
7Β Excluding inter-group operationsΒ
8Β Including hot-rolled pickled steel
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