NLMK Group Announces Q4 2012 and FY2012 RAS Financial Results
OREANDA-NEWS. NLMK (LSE: NLMK), the LSE-listed leading Russian steel producer, today announces the Q4 2012 and FY 2012 Russian Accounting Standards (RAS) financial results for its major Russian companies.
NLMK Group Q4 2012 and FY2012 RAS Financial Results
NLMK (LSE: NLMK), the LSE-listed leading Russian steel producer, today announces the Q4 2012 and FY 2012 Russian Accounting Standards (RAS) financial results for its major Russian companies1.
More detailed information on NLMK’s Q4 2012 and FY 2012 RAS financial results is presented below.
Note: Russian Accounting Standards (RAS) results differ materially from US GAAP results and are not comparable to financial statements prepared in accordance with 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 to be published in March 2013.
• Novolipetsk grows revenue in 2012
In 2012, revenue increased by 8.6% to RUB 240 billion, supported by higher export and domestic sales. An increased share of high value added products in the sales mix served as an additional growth factor, offsetting the overall year-on-year softening in steel prices.
Operating profit was down year-on-year, pressured by lower average steel prices and higher prices for some type of raw materials and energy.
Despite the Q4 growth in sales quarter-on-quarter, lower prices and the seasonally lower share of high value added products were the key factors driving Novolipetsk revenue down to RUB 57.3 billion in Q4 (-4% quarter-on-quarter). As steel price falls were outpacing raw material prices, gross profit and operating profit went down 29% and 74%, respectively, quarter-on-quarter. Repair and maintenance activities planned for the end of the year resulted in higher maintenance costs. This also contributed to lower operating performance.
Q4 net profit hike versus operating profit was driven by a RUB 4.7 billion increase in accrued interim dividends from NLMK affiliates. Q4 2012 net profit decreased by 39% quarter-on-quarter due to tighter operating profit margins and an increase in allowances at the end of the year.
• VIZ-Steel shows weaker financials
In 2012, a decrease in prices was the main reason for lower revenue year-on-year. The same factor put pressure on gross profit and operating profit in 2012, bringing them down by 40% and 97%, respectively, year-on-year. VIZ-Steel FY2012 financials were impacted by the narrowing GO steel-HRC spread.
Lower GO steel sales, due in part to delayed sales recognition for export supplies, coupled with unfavorable market conditions, resulted in lower revenue, gross profit and operating profit in Q4 2012 year-on-year.
• Stoilen provisions, the company reduced its net loss by 90%.
The 14.5% reduction in Q4 revenue quarter-on-quarter was driven by the seasonal decrease in sales and prices. Gross profit and operating profit decreased by 60% and 88.5%, respectively, as steel product price falls outpaced raw material prices; and utilization rates were seasonally down.
In Q4, the bad debt provision was recovered, positively impacting NSMMZ net profit that totaled RUB 113 million.
• Altai-Koks posts higher net profit
In 2012, revenue fell by 6% year-on-year, pressured mainly by a dive in prices for coke and chemical products. This factor also drove Altai-Koks gross profit down (-2%) year-on-year. At the same time, operating profit was up 8% year-on-year, as shifts in the geography of sales towards the Russian and the CIS markets resulted in lower transportation costs.
In 2012, net profit increased by 18% on the back of operating profit growth.
Coke and chemical product sales decelerated and prices softened, leading to a 20% decrease in the company’s revenue in Q4 quarter-on-quarter. These factors drove gross profit and operating profit down by 43% and 56%, respectively.
In Q4 2012, weaker operating performance resulted in lower net profit: -45% quarter-on-quarter.