Russia's fourth largest steelmaker, Novolipetsk Steel, saw its third-quarter net profit fall 62 percent, quarter on quarter, to $225 million to US GAAP, the firm said in a statement on Wednesday.
"In Q3, with the Eurozone financial crisis still unfolding, steel market conditions deteriorated significantly, with a dramatic drop in prices and softening in demand occurring across the European markets. Production costs continued to grow, driven by the industry’s extended production cycle, related to the increase in the price of raw materials purchased in the previous periods," the statement said.
The company's revenue grew 12 percent in the reporting period to $3.334 billion, while operating profit decreased 61 percent to $271 million.
Earnings before Interest, Taxation, Depreciation and Amortization (EBITDA) fell 43 percent in July-September 2011 to $478 million, while the EBITDA margin decreased to 14 percent in the reporting period from 28.1 percent in April-June this year.
The company's net debt increased 95 percent to $2.933 billion while the net debt/EBITDA ratio rose to 1.23 percent from 0.57 percent.
The company's net profit in the first nine months of 2011 grew nine percent to $1.204 billion year-on-year.
The company's revenue rose 43 percent in January-September 2011 to $8.675 billion, while Earnings before Interest, Taxation, Depreciation and Amortization (EBITDA) went up two percent to $1.9 billion.
"The company reconfirms its full year production outlook in the range of 12 million tons of steel. In Q4 we expect steel production output to grow 7 percent, as well as sales, following the launch of the new blast furnace. We expect Q4 profitability to be in the range of 15 percent," Novolipetsk Steel also said.
