OREANDA-NEWS. March 25, 2011. On Mar 25 Alchevsk Steelworks provided the full disclosure of its FY10 financial results. The company’s net sales have declined by 12.3% qoq in 4Q10, while its gross and EBITDA margins took a further dip. However, the net loss narrowed down from UAH 434mn in 3Q10 to UAH 262mn in 4Q10 thanks to the UAH 244mn qoq decline in other expenses. Accounts receivable have decreased from UAH 3.9bn in 3Q10 to UAH 2.0bn in 4Q10. Other balance sheet items did not have any significant changes since the 3Q10.

Millennium Capital: the news is MIXED for ALMK with a slight negative tint. The 4Q10 sales came out way below expectations ( UAH 2,236mn actual vs MFKe UAH 2,576mn) meaning we are seeing an upswing in transfer pricing. The negative impact, though, was fully offset by lower COGS where we have not observed any transfer pricing at all. The resultng gross margin was at -10.2% vs MFKe -10.8%. There was also some noise below the gross profit line with other operatng income firmly positive (UAH 42mn) and substantial income tax benefit (UAH 85mn). Ultimately, EBITDA was at - UAH 87mn (-3.9% margin) vs our forecast of - UAH 191mn (-7.4% margin).