OREANDA-NEWS. Severstal Russian Steel (RSD) reports its Q4 and FY 2015 financial results for the period ended 31 December 2015.

Steel product sales decreased 13% q/q to 2.63 mln tonnes due to seasonal factors and short-term scheduled maintenance at the hot-rolling shop at Cherepovets Steel Mill.

Despite seasonally weaker demand, the share of domestic sales volumes within the sales mix decreased only marginally to 64% (Q3 2015: 67%), reflecting Severstal's ability to efficiently reallocate sales volumes between markets and target higher margin domestic sales.

Moreover, the share of HVA products within the sales mix remained at 47%, despite seasonally lower demand for galvanised and metallic coated coil and colour coated coil.

Reflecting the continuing downward adjustment in global steel prices and a seasonally soft domestic market, which resulted in Russian steel producers reducing their prices, USD-denominated average steel prices for rolled products at RSD decreased q/q for almost all products (except for LDPs). Ongoing RUB devaluation put additional pressure on USD-denominated prices.

Reflecting all of the abovementioned factors, revenue decreased 17.7% q/q to USD 1,256 million (Q3 2015: USD 1,527 million). The negative impact of lower selling prices and volumes was further exacerbated by higher raw material input prices and only partially mitigated by lower production costs on the back of RUB devaluation. As a result,

EBITDA decreased 26.5% q/q to USD 313 million (Q3 2015: USD 426 million) and the EBITDA margin compressed 3.0 ppts to 24.9% (Q3 2015: 27.9%).