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    NLMK   US67011E2046

NOVOLIPETSK STEEL

(NLMK)
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Novolipetsk Steel : NLMK Group Q2 2021 IFRS Financial Results

07/22/2021 | 04:08am EDT

NLMK Group's EBITDA (LSE, MOEX: NLMK) in Q2 2021 totalled $2.1 bn; EBITDA margin grew by 9 p.p. qoq to 50%. Free cash flow (FCF) reached $864 m. NLMK Group Board of Directors recommended approving Q2 2021 dividends in the amount of 13.62 RUB/share (127% of the FCF).

Q2 2021 key highlights

  • Revenue grew by 44% qoq to $4.1 bn (+90% yoy) with an increase in steel product prices and production and sales volumes.
  • EBITDA grew by 76% qoq to $2.1 bn (+3.5х yoy) amid increased sales and wider price spreads. EBITDA margin grew by 9 p.p. qoq to 50%.

  • Free cash flow grew by 91% qoq to $864 m (+2.8х yoy), driven by stronger financial performance.

  • Net profit grew by 75% qoq to $1.4 bn (+18х yoy).

6M 2021 key highlights

  • Revenue grew by 51% yoy to $7.0 bn amid higher average sales prices and an increase in the share of finished products in the sales portfolio.
  • EBITDA grew by a factor of 2.7 yoy to $3.2 bn due to the widening of the steel products/raw materials price spreads and the implementation of Strategy 2022 projects. EBITDA margin was 46% (+21 p.p. yoy).

  • Free cash flow increased by a factor of 2.1 yoy to $1.3 bn, driven by EBITDA growth. This was partially offset by higher investment and the outflow of funds for working capital replenishment amid growing prices.

  • Net profit increased by a factor of 5.8 yoy to $2.1 bn due to gross profit growth, and last year's low baseline effect amid NBH investment cost impairment.


Comment from NLMK Group CFO Shamil Kurmashov:

'In Q2 2021, steel prices continued to grow across all key markets. In the US and the EU, prices hit new highs. Steel product consumption grew due to the realization of deferred demand and government support measures. Steel capacity utilization rates reached pre-crisis levels as facilities that were stopped during the first wave of the pandemic were relaunched. The outstripping growth in steel consumption relative to production led to a decrease in inventories to all-time lows, which brought about a further increase in prices.

'Sales growth and favourable pricing conditions contributed to an increase in NLMK Group's revenue by 44% qoq to $4.1 billion, and an EBITDA growth by 76% qoq to $2.1 billion. EBITDA margin reached 50%. Free cash flow increased by 91% to $864 million.

'Net debt/EBITDA stood at 0.4x; net debt decreased by 6% qoq to $2 billion.

'In line with the Group's Dividend Policy, the management recommended to the NLMK Board of Directors to pay $1.1 billion in Q2 2021 dividends.'

Disclaimer

OAO NLMK - Novolipetskiy Metallurgicheskiy Kombinat published this content on 22 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 July 2021 08:07:07 UTC.


ę Publicnow 2021
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Financials (USD)
Sales 2021 16 501 M - -
Net income 2021 5 202 M - -
Net Debt 2021 2 044 M - -
P/E ratio 2021 3,89x
Yield 2021 22,3%
Capitalization 18 447 M 18 447 M -
EV / Sales 2021 1,24x
EV / Sales 2022 1,55x
Nbr of Employees -
Free-Float -
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Mean consensus OUTPERFORM
Number of Analysts 11
Last Close Price 30,78 $
Average target price 38,07 $
Spread / Average Target 23,7%
EPS Revisions
Managers and Directors
Grigory Vitalyevich Fedorishin President & Chairman-Management Board
Shamil Ravilyevich Kurmashov CFO, VP & Member-Management Board
Vladimir Sergeevich Lisin Chairman
Irene Spitzberg Vice President-Technology Development
Dmitry Kholkin Vice President-Digital Transformation & IT