11.05.2007, 07:34
Q1 2007 RAS Financial Results for NLMK Group’s Major Companies
OREANDA-NEWS. On May 07, 2007 Novolipetsk Steel (NLMK) (LSE: NLMK) announced Q1 2007 Russian Accounting Standards (RAS) financial results for the Group’s major Russian companies, reported the press-centre of Novolipetsk Steel.
The filing of RAS accounting results is a Russian regulatory requirement. In addition, NLMK has been preparing financial reports in accordance with the US GAAP accounting standards since 1998. RAS accounting results differ materially from US GAAP accounting results and are not comparable to financial statements prepared in accordance with US GAAP. The RAS accounting results of the Group’s major Russian companies are not indicative of the financial condition or results of these entities under US GAAP. Reference should be made only to consolidated financial statements prepared in accordance with US GAAP for information with respect to NLMK Group’s financial condition and results of operations.
Highlights
NLMK’s financial results decreased in Q1 2007 compared to Q4 2006 due to a weak pricing environment
Slab, hot-rolled and cold-rolled steel prices in Q1 2007 were below the record levels of Q4 2006 due to seasonal factors. The weak pricing environment negatively impacted NLMK’s financial results in Q1 2007 compared to the previous reporting period. Steel prices started to rebound only towards the end of Q1 2007.
Sales revenue, gross profit and operating profit increased in Q1 2007 compared to Q1 2006 due mainly to the growth of prices and sales volumes as well as changes to delivery terms. The lower growth rate of operating profit compared to gross profit was caused by increased SG&A expenses associated with changes to delivery terms in March 2006.
Net profit in Q1 2007 amounted to RUR 9,5 billion. The 73,3% net profit increase in Q1 2007 compared to Q4 2006 is primarily attributable to impairment losses and accretion expense on asset retirement obligations of the Prokopievskugol Group of Companies. Net profit decreased by 37% in Q1 2007 compared to Q1 2006 caused by lower gains on financial investments. The proceeds from the divestment of NLMK’s stake in Lebedinsky GOK in Q1 2006 substantially exceeded the proceeds from the divestment of energy assets in Q1 2007
VIZ-Stal’s sales revenue decreased in Q1 2007 compared to Q4 2006
Sales revenue declined slightly during the reporting period due to the decrease of sales volumes. The apparent slight decrease in VIZ-Stal’s sales volumes is due to the fewer number of calendar days in Q1 2007 against Q4 2006. The strong pricing environment resulted in an increase of VIZ Stal’s sales revenue in Q1 2007 compared to Q1 2006. The decrease in production costs also contributed to the growth of gross profit, operating profit and net profit.
Stoilensky GOK demonstrates stable financial results increase compared to Q1
2006
The strong pricing environment combined with the increase of Stoilensky GOK sales volumes in Q1 2007 compared to Q1 2006 resulted in an increase of sales by 99,1% and 0,7% compared to Q1 2006 and Q4 2006 respectively. Growing iron ore prices and sales volumes resulted in gross profit and operating profit increase in Q1 2007 compared to Q1 2006 by 164,7% and 179,3% respectively. The gross profit and operating profit in Q1 2007 were close to the level of Q4 2006.
Net profit at Stoilensky GOK in Q1 2007 amounted to RUR 3 bln. Net profit increased by 5,8% compared to Q4 2006 and 186,1% compared to Q1 2006. The net profit increase increase was primarily attributable to growth of sales revenue and interest income.
Financial results decrease at OJSC “Altai-koks”
Altai-koks financial results decrease in Q1 2007 compared to Q4 2006 is due to a continuing weak pricing environment as well as growing coal concentrate prices.
Increased coke sales volumes, following the commissioning of coke battery #5 and substantial growth of chemical products prices in Q1 2007 compared to the same period of the previous year, resulted in an improvement in financial results.
Financial results increase at OJSC "Lipetskcombank"
The improvement of OJSC Lipetskcombank’s financial results was primarily attributable to growth of the credit portfolio. As a result, net profit in Q1 2007 amounted to RUR 48,9 mln, an increase of 6,8% and 87,0% compared to Q4 2006 and Q1 2006 respectively.
US dollar weakness and low volume of transshipments resulted in OJSC “TMTP” financial results deterioration
A decrease in the volume of transshipments, due to poor weather conditions resulted in lower sales revenue and profits in Q1 2007 compared with Q1 and Q4 of the previous year. Moreover, another factor contributing to the decrease in the company’s financial results was US dollar weakness because the sea port tariffs are regulated by state authorities and denominated in US dollars.
Financial results increase at LLC “NTK”
The growing volume of logistics and transportation services, as well as the ongoing optimization of the transportation routes resulted in a substantial growth of financial results of LLC “NTK” in Q1 2007 compared to the same period of the last year. Increased quantity of shipments by company owned railcars enabled LLC “NTK” to cut railcars usage fees paid to “Russian Railways”, which, in turn, contributed to the increase of sales revenue and net income of LLC “NTK”.
The filing of RAS accounting results is a Russian regulatory requirement. In addition, NLMK has been preparing financial reports in accordance with the US GAAP accounting standards since 1998. RAS accounting results differ materially from US GAAP accounting results and are not comparable to financial statements prepared in accordance with US GAAP. The RAS accounting results of the Group’s major Russian companies are not indicative of the financial condition or results of these entities under US GAAP. Reference should be made only to consolidated financial statements prepared in accordance with US GAAP for information with respect to NLMK Group’s financial condition and results of operations.
Highlights
NLMK’s financial results decreased in Q1 2007 compared to Q4 2006 due to a weak pricing environment
Slab, hot-rolled and cold-rolled steel prices in Q1 2007 were below the record levels of Q4 2006 due to seasonal factors. The weak pricing environment negatively impacted NLMK’s financial results in Q1 2007 compared to the previous reporting period. Steel prices started to rebound only towards the end of Q1 2007.
Sales revenue, gross profit and operating profit increased in Q1 2007 compared to Q1 2006 due mainly to the growth of prices and sales volumes as well as changes to delivery terms. The lower growth rate of operating profit compared to gross profit was caused by increased SG&A expenses associated with changes to delivery terms in March 2006.
Net profit in Q1 2007 amounted to RUR 9,5 billion. The 73,3% net profit increase in Q1 2007 compared to Q4 2006 is primarily attributable to impairment losses and accretion expense on asset retirement obligations of the Prokopievskugol Group of Companies. Net profit decreased by 37% in Q1 2007 compared to Q1 2006 caused by lower gains on financial investments. The proceeds from the divestment of NLMK’s stake in Lebedinsky GOK in Q1 2006 substantially exceeded the proceeds from the divestment of energy assets in Q1 2007
VIZ-Stal’s sales revenue decreased in Q1 2007 compared to Q4 2006
Sales revenue declined slightly during the reporting period due to the decrease of sales volumes. The apparent slight decrease in VIZ-Stal’s sales volumes is due to the fewer number of calendar days in Q1 2007 against Q4 2006. The strong pricing environment resulted in an increase of VIZ Stal’s sales revenue in Q1 2007 compared to Q1 2006. The decrease in production costs also contributed to the growth of gross profit, operating profit and net profit.
Stoilensky GOK demonstrates stable financial results increase compared to Q1
2006
The strong pricing environment combined with the increase of Stoilensky GOK sales volumes in Q1 2007 compared to Q1 2006 resulted in an increase of sales by 99,1% and 0,7% compared to Q1 2006 and Q4 2006 respectively. Growing iron ore prices and sales volumes resulted in gross profit and operating profit increase in Q1 2007 compared to Q1 2006 by 164,7% and 179,3% respectively. The gross profit and operating profit in Q1 2007 were close to the level of Q4 2006.
Net profit at Stoilensky GOK in Q1 2007 amounted to RUR 3 bln. Net profit increased by 5,8% compared to Q4 2006 and 186,1% compared to Q1 2006. The net profit increase increase was primarily attributable to growth of sales revenue and interest income.
Financial results decrease at OJSC “Altai-koks”
Altai-koks financial results decrease in Q1 2007 compared to Q4 2006 is due to a continuing weak pricing environment as well as growing coal concentrate prices.
Increased coke sales volumes, following the commissioning of coke battery #5 and substantial growth of chemical products prices in Q1 2007 compared to the same period of the previous year, resulted in an improvement in financial results.
Financial results increase at OJSC "Lipetskcombank"
The improvement of OJSC Lipetskcombank’s financial results was primarily attributable to growth of the credit portfolio. As a result, net profit in Q1 2007 amounted to RUR 48,9 mln, an increase of 6,8% and 87,0% compared to Q4 2006 and Q1 2006 respectively.
US dollar weakness and low volume of transshipments resulted in OJSC “TMTP” financial results deterioration
A decrease in the volume of transshipments, due to poor weather conditions resulted in lower sales revenue and profits in Q1 2007 compared with Q1 and Q4 of the previous year. Moreover, another factor contributing to the decrease in the company’s financial results was US dollar weakness because the sea port tariffs are regulated by state authorities and denominated in US dollars.
Financial results increase at LLC “NTK”
The growing volume of logistics and transportation services, as well as the ongoing optimization of the transportation routes resulted in a substantial growth of financial results of LLC “NTK” in Q1 2007 compared to the same period of the last year. Increased quantity of shipments by company owned railcars enabled LLC “NTK” to cut railcars usage fees paid to “Russian Railways”, which, in turn, contributed to the increase of sales revenue and net income of LLC “NTK”.
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