OREANDA-NEWS. April 28, 2011. Azovstal reported dismal performance in the 1Q11 with net loss in-line with 4Q10 result at UAH 246mn (-3.1% margin) despite improved pricing environment for slabs and flat products. EBITDA came in at a negative UAH 16mn (-0.2% margin), reported the press-centre of Millennium Capital.

The news is NEGATIVE for AZST. Despite a healthy pricing environment that has improved significantly compared to the 2H10, the bottom line remained deep in the red (UAH 246mn net loss) as the hike in the price realized (+11.2% qoq) was offset by the equivalent growth in costs.

Although the stock had been reluctant to react to bad financials previously, this time market participants were truly upset. The share price is understandably down more than 3%, and we believe the drift is here to last.