Russia’s NLMK boosts net profit jump as steel prices rise
Russian steel producer NLMK on Thursday posted a jump in second-quarter net profit to $1.4 billion from $77 million a year earlier helped by rebounding demand and higher prices.
NLMK’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to $2.1 billion from $582 million on revenue up 90% to $4.1 billion, it said.
Steel prices rose across all of NLMK’s key markets, reaching new highs in the United States and the European Union, Chief Financial Officer Shamil Kurmashov said in a statement.
“Consumption of steel product grew due to the realisation of deferred demand and government support measures,” he said.
The growth in demand combined with curtailed output due to the pandemic cut inventories to all-time lows, further boosting prices, he added.
NLMK’s board of directors recommended a dividend payment of 13.62 roubles ($0.1849) per share, or $1.1 billion in total, the company, controlled by Russian billionaire Vladimir Lisin, added.
From next month until December Russia has imposed new export taxes on steel, nickel, copper and aluminium.
The move is aimed at protecting Russia’s defence and construction sectors from further cost increases but is expected to cost metals producers $2.3 billion.
Source: Reuters (Reporting by Anastasia Lyrchikova; writing by Polina Devitt; editing by Edmund Blair and Jason Neely)