OREANDA-NEWS. August 10, 2012. NLMK (LSE: NLMK) announces its Q2 2012 Russian Accounting Standards (RAS) financial results for its major companies.

Novolipetsk (NLMK's parent company)

 

Q2 2012

Q1 2012

Q2 2011

Q2 2012/ Q1 2012

Q2 2012/ Q2 2011

 

 

 

 

Revenue

62 595 821

60 446 405

60 594 089

3.56%

3.30%

Gross profit

11 426 387

8 053 757

15 644 036

41.88%

-26.96%

Operating profit

4 469 142

2 293 509

10 182 539

94.86%

-56.11%

Net profit

10 609 017

3 437 568

28 063 781

208.62%

-62.20%

VIZ-Stal

 

Q2 2012

Q1 2012

Q2 2011

Q2 2012/ Q1 2012

Q2 2012/ Q2 2011

 

 

 

 

Revenue

2 567 990

2 024 400

2 182 884

26.85%

17.64%

Gross profit

374 150

164 928

320 784

126.86%

16.64%

Operating profit

150 265

-70 672

94 913

 

58.32%

Net profit

222 877

-133 225

77 356

 

188.12%

Stoilensky

 

Q2 2012

Q1 2012

Q2 2011

Q2 2012/ Q1 2012

Q2 2012/ Q2 2011

 

 

 

 

Revenue

10 691 825

9 174 935

10 818 849

16.53%

-1.17%

Gross profit

7 735 612

6 706 763

8311939

15.34%

-6.93%

Operating profit

7 061 863

6 220 043

7 813 323

13.53%

-9.62%

Net profit

7 346 280

4 254 733

6 235 328

72.66%

17.82%

NSMMZ

 

Q2 2012

Q1 2012

Q2 2011

Q2 2012/ Q1 2012

Q2 2012/ Q2 2011

 

 

 

 

Revenue

9 850 183

8058394

9 612 749

22.24%

2.47%

Gross profit

1 329 992

843 698

1 252 109

57.64%

6.22%

Operating profit

740 972

341 625

119 767

116.90%

x6 times

Net profit

-65 343

-288 691

-811 007

-77.37%

-91.94%

NSMMZ is a key asset of NLMK Long Products Division.

Altai-Koks

 

Q2 2012

Q1 2012

Q2 2011

Q2 2012/ Q1 2012

Q2 2012/ Q2 2011

 

 

 

 

Revenue

10 388 923

11 140 223

10 280 286

-6.74%

1.06%

Gross profit

2 266 491

1 932 216

2 133 579

17.30%

6.23%

Operating profit

1 814 582

1 576539

1 446 362

15.10%

25.46%

Net profit

1 396 944

1 162 636

1 142 487

20.15%

22.27%

KEY HIGHLIGHTS

•           Improved financials for Novolipetsk

In Q2 2012 NLMK revenue increased 4% q-o-q driven by higher product prices coupled with stable sales. Y-o- y revenue climbed 3% as sales grew 15% while prices dropped 6% y-o-y and share of semi-finished products in total sales increased. The growth in revenue was the main factor driving gross profit and operating profit up 42% and 95% q-o-q, respectively. Novolipetsk profit margins also increased, by 3 p.p. q-o-q.

Q2 net profit totalled RUB10,609 million, more than tripling q-o-q, as a result of the distribution of dividends for 2011 from NLMK's subsidiaries.

Y-o-y net profit contracted by 62%, pressured by lower operating profit and the fact that Q2 2011 financials included the divestment of NTK (Independent Transportation Company).

•           Improved financials for VIZ-Stal

The seasonal growth in demand supported an increase in transformer steel sales. As a result, Q2 2012 revenue grew 27% q-o-q and 18% y-o-y.

The 27% increase in gross profit q-o-q was supported by higher demand for high value-added flat steel products. The decrease in fixed costs per tonne of steel in Q2 served as an additional growth factor for the financial and operating performance of the company.

VIZ-Stal's Q2 net profit totalled RUB223 million (against a RUB133 million loss in Q1), supported by higher operating income, as well as the positive effect of FX differences.

•           Improved financials for Stoilensky

Revenue grew 17% q-o-q, impacted mainly by higher sales of iron ore concentrate to the parent company, as well as to the external market.

Gross profit and operating profit increased 15% and 13% q-o-q, respectively, driven by the growth in revenue.

Net profit increased 1.7 times q-o-q, with positive FX differences being included into Other income.

•           Higher operating profit and lower net loss for NSMMZ

The seasonal pick-up in demand for long products from the local construction sector led to significant increase in sales. This was the key driver for the 22% revenue growth q-o-q.

Revenue growth was the main factor for the 117% q-o-q increase in operating profit.

The company's net loss is still determined by its high debt burden. The company was able to significantly reduce its losses, mainly due to by high financial results from operating activities.

The company was able to reduce its losses y-o-y by partially repaying its loan.

•           Improved financials for Altai-Koks

As product prices fell, the company's revenue reduced mildly (-7%). The impact of this factor was partially offset by the 5% increase in sales.

The opportunity to cut production costs was ensured by coal concentrate price adjustments, the use of captive tar pitch starting from Q2, as well as lower consumption rates supported by high battery utilization and satisfactory charge quality. These factors drove gross profit and operating profit up 17% and 15% q-o-q, respectively, and 6% and 26% y-o-y.

Sales margins grew 3 p.p. q-o-q, as production cost reduced at a higher pace than revenue.

The 20% increase in net profit q-o-q was determined by the higher operating profit.