OREANDA-NEWS. According to the press-service of Company, Severstal’s consolidated revenues increased by 31.1% to $7,711 million in H1 2007 from $5,883 million in H1 2006, attributable to higher average pricing levels in all geographies, volume growth and product mix improvements.

Costs were $5,362 million in H1 2007, compared with $4,330 million in H1 2006. The primary drivers behind this change were higher raw material, energy and labour costs. Cost of revenues as a percentage of consolidated revenues decreased to 69.5% (H1 2007), from 73.6% in H1 2006, reflecting the company’s ability to pass cost increases to end customers.

Gross profit increased by 51.2% from $1,554 million in H1 2006 to $2,349 million in H1 2007.

Profit from operations increased by 81.0% to $1,484 million in H1 2007 from $820 million in H1 2006. This increase was largely due to positive steel prices. Group operating margin went up to 19.2% in H1 2007 from 13.9% in H1 2006.

Consolidated EBITDA increased by 60.7% from $1,303 million in H1 2006 to $2,094 million in H1 2007. This growth is mainly attributable to the strong performance of Russian Steel, which successfully exploited opportunities in the Russian domestic market. Our Mining business and Lucchini also contributed to the overall improvement.

Income tax charges for H1 2007 were $384 million compared with $270 million in H1 2006.

In H1 2007, Severstal reported consolidated net profit attributable to shareholders of
$999 million compared with $426 million in H1 2006.

EPS for the first half of 2007 amounted to $0.99, 115.2% higher than for the first half of 2006.

Cash surplus, calculated as the difference between financial debt and cash and cash equivalents plus short-term bank deposits, increased for the three months ended June 30, 2007 from $173 million to $403 million. Total indebtedness decreased from $3,009 million to $2,869 million. Cash, cash equivalents and short-term bank deposits increased from $3,182 million to $3,272 million, mainly attributable to the results of operating activities.

Dividend
Severstal's Board of Directors, held on 30-31 August 2007, has recommended an interim dividend of 10.0 rubles per share and correspondingly per global depositary receipt ("GDR") for Q2 2007 with the record date of 20 August 2007. Each GDR represents one share in the Company. The Board’s recommendation is based on the company’s strong financial results in H1 2007. Approval of the dividend payment is expected at the company’s EGM on 28 September 2007.  Severstal is to maintain its dividend policy of paying a minimum of 25% of net profits received by the end of the reporting period (calculated according to IFRS).