In Q3 NLMK Group EBITDA growth totaled 11% QoQ, to $1,015 million. EBITDA margin was 32%.
Net income grew by 11%, to $646 million. Free cash flow doubled to $638 m. Net debt/EBITDA hit its minimum in a decade of 0.25x.
Group revenue in Q3 totaled $3.13 billion (+0.5% QoQ, +23% YoY). The decrease in average sales prices was offset by the 1% QoQ growth in sales volumes and the increase in the share of HVA products in the group’s portfolio.
EBITDA growth by 11% QoQ, to $1,015 million (+57% YoY) was driven by product portfolio improvements, the drop in coal prices and the weakening of the ruble.
Net income grew by 11% QoQ and by 82% YoY, driven by higher operating profit.
Q3 free cash flow increased 2.2-fold QoQ, to $638 million, influenced by the increase in EBITDA, and stable working capital.
Net debt/EBITDA decreased to 0.25x.
NLMK Group Deputy CFO Nelli Meshcheryakova commented: “In Q3 demand for steel products at our key international sales markets remained relatively stable. Russia saw a weakening in activity of rolled product buyers due to high stock levels at large traders. At the same time, the uptick in demand for long products enabled the company to grow its consolidated sales QoQ (growth of long product sales totaled 46%), maintaining high steelmaking capacity utilization rates. Group revenue totaled $3.1 billion, flat QoQ. The decrease in average sales rates was offset by the seasonal growth of consolidated sales and product portfolio improvements. Company EBITDA was 11% higher than the record level set last quarter, reaching $1,015 million. This is the best result since 2008. This growth was driven by product portfolio improvements, the decrease in coal prices, the weakening of the ruble, and impact from capex projects and operational efficiency programs. EBITDA margin was 32%. Free cash flow grew 2.2-fold QoQ, to $638 million, driven by stable working capital, and record-high EBITDA. Net debt/EBITDA decreased to 0.25x, a testimony to the group’s financial stability. This is confirmed by NLMK’s investment grade credit ratings from Fitch, Moody’s and S&P. Moreover, NLMK was awarded a high ruAAA credit rating by RAEX (Expert RA)”. (NLMK/Ukrainian metal)