OREANDA-NEWS. April 07, 2010. In general, NLMK has reported sound financials for 2009, but the restrained targets for profit margins set by management could exert pressure on the market price of the shares.

Steelmaker NLMK released consolidated financial results for 4Q and FY2009. The report says that revenues dropped 48% y-o-y to USD 6.1 billion, EBITDA plunged 68% to USD 1.4 billion and net income plummeted 10x to USD 215 million. In the 4Q, revenue grew 4% q-o-q and EBITDA margin increased to 29%.

In 4Q, the company managed to slightly raise its margin indicators over the previous quarter, despite 20% growth in slab production costs. The company itself attributes growth in its EBITDA margin to 29% to improvements in its sales structure.

The financial results from the steelmaker have appeared slightly below our expectations on all key indicators (see the table below), primarily due to growth in production costs in 4Q and marginally lower sales volumes.


The company makes cautious forecasts for the first quarter, expecting stable sales volumes and EBITDA margin contraction to 20-25% under pressure from production costs. As before, the company targets full-year production of 11.6 million tons in 2010.