Severstal posts $531 mln Q1 net profit

Russian steel giant Severstal posted a net profit of $531 million for the first quarter of 2011 to IFRS following a $785 million net loss in the same period a year ago, the firm said on Tuesday.

Severstal’s net profit was above analysts’ forecasts of $500.6 million.

Revenue grew by 35.9 percent in the first three months of 2011 to $3.7 billion. First quarter EBITDA increased to $934 million from $583 million in 2010, while EBITDA margin stood at 25.1 percent compared with 21.3 percent in January-March 2010, the company said in a statement.

Net debt/EBITDA ratio fell to 1.2 by the end of the first quarter. Severstal plans to sell 2,252,964 Global Depositary Receipts (GDRs) and 246,373 ordinary shares to reduce its net debt.

“In Q1 we focused on increasing profitability by selling more value-added products. Despite the growth of raw materials prices, EBITDA margin increased to 25.1 percent as a result of our vertical integration and improved steel assets structure,” Severstal CEO Alexey Mordashov was quoted in the statement.

“Our net debt/EBITDA level continued to decline to 1.2 below the targeted 1.5 and we are committed to maintaining this reasonable level of debt and strong liquidity position. We expect further improvement in our operating and financial performance in Q2 2011 and are confident about our full-year outlook,” he said.

Severstal’s board of directors has recommended paying dividends at 3.9 rubles or about $0.14 per share for January-March 2011.

MOSCOW, May 17 (RIA Novosti)

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