RNS Number : 2859W
Novolipetsk Steel
22 April 2021
 

Press release

22 April 2021

NLMK Group Q1 2021 IFRS Financial Results

NLMK Group (LSE: NLMK, MOEX: NLMK) increased its revenue by 20% qoq to
$2.9 bn, EBITDA totalled $1.2 bn (+31% qoq), EBITDA margin increased to 41% (+4 p.p. qoq).

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Sales volumes

3,908

4,220

-7%

4,505

-13%

Revenue

2,867

2,385

20%

2,457

17%

EBITDA 2

1,166

890

31%

594

96%

EBITDA margin

41%

37%

+4 p.p.

24%

+17 p.p.

Profit for the period 3

775

558

39%

289

2,7x

Free cash flow 4

452

229

97%

331

37%

Net debt 5

2,087

2,495

-16%

1,770

18%

Net debt/EBITDA 5

0.65x

0.94x

 

0.72x

 

 

 Q1 2021 key highlights

·    Revenue increased to $2.9 bn (+20% qoq; +17% yoy), supported by growing rolled steel prices.

·    EBITDA reached $1.2 bn (+31% qoq; +96% yoy), driven by the expansion of the raw materials/steel products price spreads. EBITDA margin stood at 41% (+4 p.p. qoq; +17 p.p. yoy).

·    Free cash flow doubled qoq reaching $452 m (+37% yoy), following EBITDA growth and seasonal capex reduction that was partially offset by the cash outflows for working capital replenishment amid the growing market.

·    Net profit grew by 39% qoq to $775 m (a 2.7x growth year-on-year) against the backdrop of an increase in gross profit.

 

 

1 Consolidated financial results are prepared under IFRS. Reporting periods of the Company are 3M, 6M, 9M and 12M. Quarterly figures are obtained by calculation, including in the segment reporting. Figures for comparable periods may differ from figures posted earlier because of rounding off to integers.

2 EBITDA is the operating profit before equity share in financial results of joint ventures, impairment of capital assets and losses from retirement of fixed assets, allowed for amortization and depreciation. EBITDA calculations and further details are presented in the Appendix.

3 Profit for the period attributable to NLMK shareholders.

4 Free cash flow is determined as net cash from operations plus interest received net of interest paid and capital investment. Free cash flow calculations are presented in the Appendix.

5 Net debt is calculated as the sum of long-term and short-term borrowings less cash and cash equivalents, as well as short-term deposits at period end. Net debt / EBITDA is represented by net debt as at the end of the reporting period and EBITDA as last 12 months EBITDA. Net debt calculations are presented in the Appendix.

 

 

Comment from NLMK Group CFO Shamil Kurmashov:

"In Q1 2021, steel product prices continued to hit new highs due to limited supply coupled with strong demand from end users. Low steel product inventories in the supply chain served as an additional factor supporting price growth. China announcing its intention to reduce steel output in 2021 promoted further improvement of the pricing environment in March and April.

"In this context, NLMK Group increased its revenue by 20% qoq to $2.9 bn, and its EBITDA by 31% qoq to $1.2 bn in Q1 2021. EBITDA margin grew to 41%.

"Higher business profitability and a seasonal decline in fixed asset investment led to a two-fold increase in free cash flow to $452 m, as compared to Q4 2020.

"The Company's net debt decreased by 16% qoq to $2.1 bn, driven by an increase in free cash flow. Net debt/EBITDA ratio declined to 0.65x (vs. 0.94x at the end of 2020).

"A significant liquidity cushion and a strong balance sheet allowed the management to recommend to the NLMK Board of Directors to pay $600 m as Q1 2021 dividends." 

 

 

Investor relations contact:

Dmitriy Kolomytsyn, CFA

+7 (495) 504 0504

ir@nlmk.com

Media relations contact:

Maria Simonova

+7 (915) 322 62 25

simonova_mn@nlmk.com

 

TELECONFERENCE

NLMK is pleased to invite the investment community to a conference call and webcast with the management of NLMK:

Thursday, April 22, 2021

·      10:00 am (New York)

·      3:00 pm (London)

·      5:00 pm (Moscow)

To join the conference call and webcast, please dial:

US Number:

+1 929-477-0324 (Local access) // 800-458-4121 (Toll free)

United Kingdom Number:
+44 (0)330 336 9434 (Local access) // 0800 279 7209 (Toll free)

Russian Number:
+7 495 646 9190 (Local access) // 8 10 8002 8675011 (Toll free)

 

Conference ID: 8375151

To join the webcast, please follow the link

https://www.webcast-eqs.com/nlmk20210422

 

* We recommend that participants start dialing in 5-10 minutes prior to ensure a timely start of the conference call.

 

MANAGEMENT COMMENTS

Q1 2021 market review

·     Apparent steel product consumption in the US increased by 12% qoq (-8% yoy), due mainly to an increase in imports against the backdrop of a record price premium vs. global benchmarks. The recovery of capacity utilization in the US was slower than in other key regions.

·     Steel demand in the EU remained flat qoq (-2% yoy), held back by the slow pace of recovery in the automotive industry.

·     In China, consumption of steel products decreased by 4% qoq (+14% yoy), due to the slowdown in business activity during the Chinese New Year celebrations.

·     Steel product consumption in Russia decreased by 6% qoq (-5% yoy) as a result of the high base of the previous quarter, when a deferred demand effect was observed after the decline in April-May 2020.

Q1 2021 prices

·      Raw material prices: Australian coking coal prices increased by 15% qoq (-19% yoy) as a result of active restocking by steel producers outside of China at the beginning of the year. In China, coking coal prices increased by 48% qoq (+39% yoy) due to limited supply of raw materials from Australia and Mongolia. Iron ore prices rose by 27% qoq (+85% yoy) backed by strong demand in China and a seasonal shortage of scrap.

·      Market prices** for flat steel grew by 53% qoq (+89% yoy) in the US and by 34% qoq (+58% yoy) in Europe as business activity continued to recover and the cost of the raw material basket stood high.

·      Uncoated steel prices on the Russian market denominated in dollars grew by 44% qoq (+39% yoy), following global prices. Dollar-denominated rebar prices grew by 44% qoq (+52% yoy).

·      Export slab prices (FOB Black Sea) grew by 35% qoq (+62% yoy).

 

* Data on steel consumption trends on regional markets are estimates.

** Market prices reflect the level of prices for a given calendar period and differ from the average sales prices of the Company and its segments due to the time lag of the production & sales cycle.
 

Q1 2021 output and sales breakdown

·    Steel output* grew by 12% qoq to 4.4 m t (+4% yoy) with equipment ramp-up to full capacity following the completion of overhauls at the Lipetsk site steelmaking operations in Q4 2020 and growth of utilization rates at the Russia Long Products segment to 97%.

·    Sales decreased to 3.9 m t (-7% qoq; -13% yoy) due to reduced sales of pig iron (overhauls in the BF operations at NLMK Lipetsk) and recovering slab deliveries to NLMK USA (241,000 t in Q1 2021) to meet local demand for finished rolled products (in stocks at the end of Q1; will be processed into finished products and sold in Q2).

·    Sales of semi-finished products to third parties declined by 29% qoq (-27% yoy) to 0.7 m t with recovering slab deliveries to NLMK USA. Slab shipments to NBH decreased by 18% qoq (-35% yoy) to 0.5 m t due to the NLMK La Louvière Hot Strip Mill upgrade.

·    Sales of finished products totalled 2.7 m t (+3% qoq; -2% yoy).

 

* Hereinafter NLMK Group steel output and sales in home markets include NBH. Consolidated sales are given without NBH. Sales to home markets mean sales of the Group's companies in the regions where production capacities are located in Russia, Europe, and the US.

 

NLMK GROUP KEY FINANCIALS

Q1 2021 revenue

·     Revenue grew by 20% qoq to $2.9 bn (+17% yoy) due to higher rolled steel prices and an increase in the share of finished products in the sales structure.

·      Revenue from sales of semi-finished products totalled $0.7 bn (-6% qoq; -8% yoy) against the backdrop of a decrease in sales volume. The share of semi-finished products in the revenue decreased by 7 p.p. qoq to 23% with an increase in slab stocks in the supply chain.

·      Revenue from sales of finished products increased by 36% qoq to $2.1 bn (+39% yoy) due to an increase in average prices and volumes. The share of finished products in consolidated revenue reached 73% (+8 p.p. qoq). The share of HVA products was 36% (+3 p.p. qoq).

·     The Russian market accounted for 46% of the revenue (+4 p.p. qoq; +5 p.p. yoy). The share of Asian countries in the revenue returned to the traditional level, amounting to 1% in Q1 2021 (-3 p.p. qoq; flat yoy) due to the recovery of demand in the Company's traditional sales markets. The EU share was 17% (-2 p.p. qoq; -4 p.p. yoy); the US share was 15% (+1 p.p. qoq; -5 p.p. yoy).

 

 

Q1 2021 EBITDA

Net profit

·    In Q1 2021, net profit increased to $775 m (+39% qoq; 2.7x growth yoy) against the backdrop of EBITDA growth.

 

Q1 2021 free cash flow

·     Free cash flow (FCF) increased two-fold qoq to $452 m (+37% yoy) due to an increase in EBITDA and a seasonal reduction in investment.

·     Operating cash flow increased by 32% qoq to $691 m (+12% yoy).

Working capital replenishment totalled $289 m due to:

o  - $304 m: an increase in receivables due to higher prices for steel products, higher sales in the Russian market and the low base effect of the 2020 year-end (accelerated settlement with buyers amid high demand);

o  - $115 m: an increase in the cost of raw materials and finished products in stocks amid rising prices;

o  + $127 m: an increase in payables amid rising coal prices and increasing tax arrears with rising product prices.

 

Investment

·     The Group's investment in Q1 2021 decreased by 15% qoq (-19% yoy) to $232 m against the backdrop of a seasonal slowdown of investment activity in line with the project schedule.

Dividends

·     On 22 April 2021, the Board of Directors recommended that shareholders approve the payment of Q1 2021 dividends in the amount of RUB 7.71 per share.

Debt management

·     Total debt declined by 16% qoq to $2.9 bn against the backdrop of planned repayment of a part of the revolving lines.

·     Net debt decreased by 16 % qoq to $2.1 bn due to increased free cash flow. Net debt/EBITDA was 0.65х.

Q2 2021 outlook

·     Completion of overhauls in the hot-end operations at the Lipetsk site, seasonal recovery of demand on the Russian market, sales of stocks accumulated at the end of Q1 2021, and the high level of prices for steel products will have a positive impact on the Company's financial performance.

NLMK Russia Flat Products

Q1 2021 highlights

·    Sales were down by 6% qoq to 3.0 m t (-14% yoy) due to lower pig iron sales amid repairs at NLMK Lipetsk BF operations and stocks piling up in the Black Sea ports due to bad weather conditions.

·    Revenue in the Segment grew by 19% qoq to $2.1 bn (+18% yoy) due to higher average sales prices, despite the increasing share of semi-finished product in the sales mix. The share of intersegmental revenue reached 25% (+5 p.p. qoq).

·     EBITDA grew by 66% qoq to $772 m (more than a two-fold growth yoy) due mainly to wider steel product/raw material price spreads.

 

NLMK Russia Long Products

Q1 2021 highlights

·     Sales increased by 8% qoq to 0.7 m t (+30% yoy) with increased output after the completion of repairs in the previous quarter and due to strong demand for rebar from service centres on the Russian market.

·     Revenue was $522 m (+17% qoq; +65% yoy) thanks to an increase in the revenue from external buyers amid an increase in long product sales and prices. Intersegmental revenue decreased to $73 m
(-40% qoq; +30% yoy) as a result of a seasonal decline in scrap collection.

·     The Segment's EBITDA displayed three-fold growth qoq, amounting to $90 m with the expansion of the scrap/long products spread, as well as with an increase in sales volumes.

 

Mining and Processing of Raw Materials

Q1 2021 highlights

·    Sales declined by 1% qoq to 4.8 m t (+4% yoy), following a comparable decline in output volumes amid repairs.

·    Revenue increased by 24% qoq to $521 m (+67% yoy) against the backdrop of an increase in prices for concentrate by 20% qoq (+80% yoy) and pellets by 28% qoq (+49% yoy).

·    EBITDA increased by 27% qoq to $432 m (+90% yoy) thanks to rising prices and investment project gains.

 

NLMK USA

Q1 2021 highlights

 

NLMK DanSteel*. Q1 2021 highlights

·    Plate sales increased to 0.17 m t (+23% qoq, +6% yoy) backed by continued recovery in demand in the EU from the wind energy and transport machine building segments.

·    Revenue grew by 52% qoq to $144 m (+11% yoy), driven by rising prices and sales volumes.

·    EBITDA remained flat qoq at -$4 m due to the simultaneous increase in slab and plate prices.

 

* NLMK DanSteel and plate distribution network.

 

JV performance (NBH). Q1 2021 highlights

·    NBH sales declined by 10% qoq to 0.5 m t (-18% yoy), due to lower shipments of hot-rolled products against the backdrop of the planned NLMK La Louvière Hot Strip Mill upgrade (Strategy 2022 project).

·    Revenue increased by 10% qoq and yoy to $422 m, due to the increase in average steel product sales prices, which was partially offset by a decrease in sales.

·    EBITDA grew to $8 m vs. -$28 m in the previous quarter and -$19 m a year earlier, due to the expansion of spreads in the EU Strip segment.

 

Appendix No. 1 Operating and financial results

 (1) Sales markets

k t

Total

Sales markets

Russia

EU

Russia

Middle
East and Turkey

Russia

Other

NLMK Group (with NBH)

3.921

1.679

789

472

539

226

216

Division sales to third parties:

 

 

 

 

 

 

 

NLMK Russia Flat

2.084

1.162

93

33

463

216

117

NLMK Russia Long

740

514

79

-

68

6

72

International subsidiaries and affiliates, incl.:

1.098

4

616

439

7

4

27

NLMK USA

431

-

-

431

-

-

-

European rolling facilities (NLMK DanSteel and NBH)

667

4

616

9

7

4

27

 

(2) NLMK Russia Flat

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Steel product sales, incl.:

2,997

3,172

-6%

3,469

-14%

external customers

2,082

2,433

-14%

2,500

-17%

semis to NBH

479

582

-18%

734

-35%

intersegmental sales

435

158

2,8x

235

85%

Revenue, incl.:

2,117

1,776

19%

1,788

18%

external customers

1,596

1,415

13%

1,376

16%

intersegmental operations

521

361

44%

412

26%

EBITDA

772

466

66%

355

2,2x

EBITDA margin

36%

26%

+10 p.p.

20%

+16 p.p.

 

(3) NLMK Russia Long

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Steel product sales

740

682

8%

569

30%

Revenue, incl.:

522

445

17%

316

65%

external customers

449

323

39%

260

73%

intersegmental operations

73

122

-40%

56

30%

EBITDA

90

32

2,8x

14

6,4x

EBITDA margin

17%

7%

+10 p.p.

4%

+13 p.p.

 

 

(4) Mining Segment

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Iron ore products sales, incl.:

4,785

4,819

-1%

4,604

4%

sales to Lipetsk plant

4,763

4,680

2%

4,529

5%

Revenue, incl.:

521

421

24%

312

67%

external customers

4

20

-80%

10

-60%

intersegmental operations

517

401

29%

302

71%

EBITDA

432

339

27%

227

90%

EBITDA margin

83%

81%

+2 p.p.

73%

+10 p.p.

 

 (5) NLMK USA

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Steel product sales

431

370

16%

537

-20%

Revenue, incl.:

403

248

63%

377

7%

external customers

403

248

63%

377

7%

intersegmental operations

-

-

0%

-

0%

EBITDA

65

107

-39%

(22)

3x

EBITDA margin

16%

43%

-27 p.p.

-6%

+22 p.p.

 

(6) NLMK DanSteel

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Steel product sales

174

142

23%

164

6%

Revenue, incl.:

144

95

52%

130

11%

external customers

144

95

52%

130

11%

intersegmental operations

-

-

0%

-

0%

EBITDA

(4)

(4)

0%

6

-0,7x

EBITDA margin

-3%

-4%

+1 p.p.

5%

-8 p.p.

 

(7) NBH

k t/$ million

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Steel product sales

495

549

-10%

605

-18%

Revenue, incl.:

422

385

10%

382

10%

external customers

410

372

10%

370

11%

intersegmental operations

12.0

13.0

-8%

12.0

0%

EBITDA

8

(28)

0,3x

(19)

0,4x

EBITDA margin

2%

-7%

+9 p.p.

-5%

+7 p.p.



 

 (8) Sales by product

k t

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Pig iron

30

437

389

368

292

Slabs

1,082

1,083

1,215

1,445

1,430

Thick plates

175

145

97

122

164

Hot-rolled steel

957

947

887

904

921

Cold-rolled steel

431

424

480

405

528

Galvanized steel

279

273

315

292

362

Pre-painted steel

81

82

129

96

97

Transformer steel

67

78

64

65

70

Dynamo steel

65

68

66

62

72

Billet

105

96

86

116

30

Long products

572

522

642

426

474

Metalware

63

65

74

53

65

TOTAL

3,908

4,220

4,443

4,352

4,505

 

 (9) Sales by region

k t

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Russia

1,677

1,643

1,817

1,447

1,767

European Union

805

852

482

767

1,026

Middle East, including Turkey

536

567

580

553

529

North America

468

604

562

472

826

Central and South America

225

184

49

44

134

CIS

91

101

135

76

91

Asia and Oceania

23

190

794

899

23

Rest of World

82

79

25

95

108

TOTAL

3,908

4,220

4,443

4,352

4,505

 

 (10) Revenue by region

Region

Q1 2021

Q4 2020

Q3 2020

$ million

share

$ million

share

$ million

share

Russia

1,306

46%

992

42%

1,022

46%

European Union

501

17%

447

19%

252

11%

Middle East, including Turkey

343

12%

296

12%

246

11%

North America

430

15%

342

14%

300

13%

Central and South America

140

5%

95

4%

22

1%

CIS

74

3%

64

3%

52

2%

Asia and Oceania

33

1%

103

4%

315

14%

Rest of World

40

1%

46

2%

20

1%

TOTAL

2,867

100%

2,385

100%

2,229

100%



 

(11) EBITDA calculation*

$ million

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Operating income**

1,016

758

437

437

439

minus:

 

 

 

 

 

Depreciation and amortization

(150)

(132)

(142)

(145)

(155)

EBITDA

1,166

890

579

582

594

 

* EBITDA used in NLMK's financial releases is calculated as operating profit before equity share in net losses of associates and other companies accounted for using the equity method of accounting, impairment and write-off of assets, adjusted to depreciation and amortization. EBITDA is not an indicator of operating profit, operating activity or liquidity under IFRS, and NLMK discloses it because equivalent indicators could be used by investors and analysts. That said, NLMK's EBITDA should not be viewed on a standalone basis, or in place of profit before tax, or cash flows from operations, as defined by IFRS, or as an indicator of operational efficiency, or as the sum of free cash funds that NLMK can invest into business development. NLMK's EBITDA margin and EBITDA might not be comparable to similar indicators disclosed by other companies as there are no commonly accepted rules for calculating them. For instance, NLMK's EBITDA is calculated similar to what is termed as 'Adjusted EBITDA' in other companies, as NLMK's EBITDA excludes other profit/loss items in addition to interest payments, income tax, depreciation and amortization.

** Operating profit before equity share in net losses of associates and other companies accounted for using the equity method of accounting, impairment and write-off of assets

 (12) Free cash flow calculation

$ million

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Net cash provided operating activities

691

524

591

549

617

Interest paid

(8)

(25)

(9)

(28)

(2)

Interest received

1

3

1

2

4

Advance VAT payments on imported equipment

-

-

-

-

-

Capex

(232)

(273)

(344)

(219)

(288)

Free Cash Flow

452

229

239

304

331

 

(13) Net debt calculation

$ million

Q1 2021

Short-term borrowings

857

1,054

856

1,219

1,678

Long-term borrowings

2,069

2,432

2,346

2,139

1,799

Cash and cash equivalents

(489)

(842)

(755)

(1,121)

(1,456)

Short-term deposits

(350)

(149)

(501)

(407)

(251)

Net debt

2,087

2,495

1,946

1,830

1,770

 

 

 (14) Production of main products

k t

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Crude steel, incl.:

4,307

3,863

3,824

3,809

4,171

Steel Segment

3,331

2,970

2,864

3,145

3,325

Long Products Segment, incl.:

789

708

786

610

659

NLMK Kaluga

333

349

361

272

256

Foreign Rolled Products Segment

187

185

173

53

188

Finished products, incl.:

2,764

2,594

2,614

2,467

2,852

Flat steel

2,096

2,024

1,957

1,978

2,240

Long steel

669

570

657

489

612

Coke (6% moisture), incl.:

1,463

1,486

1,506

1,530

1,540

NLMK Lipetsk

638

647

647

643

645

Altai-Koks

825

839

858

887

895

 

 (15) Slab sales, including intra-group sales to NLMK Group companies

k t

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Sales to 3rd parties, incl.:

603

502

907

973

696

Export

406

380

797

796

406

Sales to subsidiaries & associates

911

728

410

598

970

Sales to NBH

479

582

308

472

734

TOTAL

1,514

1,230

1,318

1,571

1,665

 

 (16) Export shipments of steel products from Group's Russian companies to third parties

k t

Q1 2021

Q4 2020

QoQ

Q1 2020

YoY

Semi-finished products

541

912

-41%

728

-26%

Pig iron

30

437

-93%

292

-90%

Slabs

406

380

7%

406

0%

Billets

105

96

10%

30

3,5x

Flat products

486

428

13%

438

11%

HRC

253

203

25%

148

71%

CRC

125

104

20%

159

-21%

HDG

5

6

-4%

17

-67%

Coated

1

1

-46%

0

33%

Dynamo

44

50

-11%

54

-18%

Transformer

57

64

-11%

60

-5%

Long products

121

148

-19%

135

-11%

Total

1,148

1,488

-23%

1,302

-12%

 

(17) Segmental information 

Q1 2021

Russia Flat

Russia Long

Mining

NLMK USA

NLMK DanSteel

Investments in NBH

Total

Intersegmental operations and balances

NBH
deconsoli-
dation

Consolidated

$ million

 

Revenue from external customers

1,596

449

4

403

144

410

3,006

-

(139)

2,867

Intersegment revenue

521

73

517

-

-

12

1,123

(1,111)

(12)

-

Gross profit / (loss)

927

119

411

70

10

38

1,575

(184)

(70)

1,321

Operating income / (loss)

687

79

392

54

(7)

(6)

1,199

(157)

(26)

1,016

Income / (loss) before income tax

530

63

319

52

(19)

(7)

938

(102)

(58)

778

Segment assets, including goodwill

7,315

984

2,195

810

453

1,373

13,130

(2,013)

(1,165)

9,952

 Balance figures presented as of 31.03.2021

Q4 2020

Russia Flat

Russia Long

Mining

NLMK USA

NLMK DanSteel

Investments in NBH

Total

Intersegmental operations and balances

NBH
deconsoli-
dation

Consolidated

$ million

 

Revenue from external customers

1,415

323

20

248

95

372

2,473

-

(88)

2,385

Intersegment revenue

361

122

401

-

-

13

897

(884)

(13)

-

Gross profit / (loss)

609

64

332

108

7

(10)

1,110

(37)

(13)

1,060

Operating income / (loss)

387

22

313

93

(7)

(46)

762

(26)

22

758

Income / (loss) before income tax

274

16

252

99

(7)

(53)

581

(1)

(21)

559

Segment assets, including goodwill

6,957

940

1,738

749

428

1,366

12,178

(1,153)

(1,163)

9,862

 Balance figures presented as of 31.12.2020

 

 

 

Novolipetsk Steel

Interim condensed consolidated statement of financial position (unaudited)

(millions of US dollars)

 

 

 

 

Note

 

As at

31 March 2021

 

As at
31 December 2020

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

3

 

489

 

842

 

Short-term financial investments

4

 

350

 

191

 

Trade and other accounts receivable

5

 

1,415

 

1,148

 

Inventories

6

 

1,464

 

1,373

 

Other current assets

 

 

12

 

16

 

 

 

 

3,730

 

3,570

 

Non-current assets

 

 

 

 

 

 

Long-term financial investments

4

 

6

 

7

 

Investments in joint ventures

4

 

110

 

131

 

Property, plant and equipment

7

 

5,577

 

5,659

 

Goodwill

8

 

208

 

212

 

Other intangible assets

8

 

153

 

159

 

Deferred income tax assets

 

 

159

 

119

 

Other non-current assets

 

 

9

 

5

 

 

 

 

6,222

 

6,292

 

Total assets

 

 

9,952

 

9,862

 

 

 

 

 

 

 

 

Liabilities and equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other accounts payable

9

 

1,138

 

1,065

 

Dividends payable

 

 

8

 

109

 

Short-term borrowings

10

 

857

 

1,054

 

Current income tax liability

 

 

94

 

51

 

Other short-term liabilities

 

 

-

 

3

 

 

 

 

2,097

 

2,282

 

Non-current liabilities

 

 

 

 

 

 

Long-term borrowings

10

 

2,069

 

2,432

 

Deferred income tax liability

 

 

360

 

359

 

Other long-term liabilities

 

 

46

 

48

 

 

 

 

2,475

 

2,839

 

Total liabilities

 

 

4,572

 

5,121

 

 

 

 

 

 

 

 

Equity attributable to Novolipetsk Steel shareholders

 

 

 

 

 

 

Common stock

 

 

221

 

221

 

Additional paid-in capital

 

 

8

 

8

 

Accumulated other comprehensive loss

 

 

(7,279)

 

(7,140)

 

Retained earnings

 

 

12,416

 

11,641

 

 

 

 

5,366

 

4,730

 

Non-controlling interests

 

 

14

 

11

 

Total equity

 

 

5,380

 

4,741

 

Total liabilities and equity

 

 

9,952

 

9,862
                 

 

 

 

 

Novolipetsk Steel

Interim condensed consolidated statement of profit or loss (unaudited)

(millions of US dollars, unless otherwise stated)

 

 

 

 

Note

 

For the three months ended
31 March 2021

 

For the three months ended
31 March 2020

 

 

 

 

 

 

 

 

Revenue

12, 15

 

2,867

 

2,457

 

Cost of sales

 

 

(1,546)

 

(1,703)

 

 

 

 

 

 

 

 

Gross profit

 

 

1,321

 

754

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

(97)

 

(86)

 

Selling expenses

 

 

(186)

 

(212)

 

Net impairment losses on financial assets

 

 

-

 

(3)

 

Other operating (expenses)/income, net

 

 

(1)

 

3

 

Taxes, other than income tax

 

 

(21)

 

(17)

 

 

 

 

 

 

 

 

Operating profit before share of results of joint ventures, impairment of non-current assets and loss on disposals of property, plant and equipment

 

 

1,016

 

439

 

 

 

 

 

 

 

 

Loss on disposals of property, plant and equipment

 

 

(2)

 

-

 

Impairment of non-current assets

 

 

(1)

 

(1)

 

Share of results of joint ventures

 

 

(34)

 

(30)

 

Finance income

 

 

1

 

3

 

Finance costs

 

 

(22)

 

(21)

 

Foreign currency exchange income, net

13, 16

 

16

 

3

 

Hedging result

16

 

(1)

 

(2)

 

Other expenses, net

 

 

(4)

 

(24)

 

 

 

 

 

 

 

 

Profit before income tax

 

 

969

 

367

 

 

 

 

 

 

 

 

Income tax expense

14

 

(191)

 

(78)

 

 

 

 

 

 

 

 

Profit for the period

 

 

778

 

289

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

Novolipetsk Steel shareholders

 

 

775

 

289

 

Non-controlling interests

 

 

3

 

-

 

 

 

 

 

 

 

 

Earnings per share - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to
Novolipetsk Steel shareholders (US dollars)

11

 

0.1293

 

0.0482

 

 

 

 

 

 

 
                 

 

 

 

 

 

Novolipetsk Steel

Interim condensed consolidated statement of cash flows (unaudited)

(millions of US dollars)

 

 

 

 

Note

 

For the three months ended
31 March 2021

 

For the three months ended
31 March 2020

 

Cash flows from operating activities

 

 

 

 

 

 

Profit for the period

 

 

778

 

289

 

Adjustments to reconcile profit for the period to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortisation

 

 

150

 

155

 

Gain on disposals of property, plant and equipment

 

 

2

 

-

 

Finance income

 

 

(1)

 

(3)

 

Finance costs

 

 

22

 

21

 

Share of results of joint ventures

 

 

34

 

30

 

Income tax expense

14

 

191

 

78

 

Impairment of non-current assets

 

 

1

 

1

 

Foreign currency exchange gain, net

13, 16

 

(16)

 

(3)

 

Hedging result

16

 

1

 

2

 

Change in impairment allowance for inventories and credit loss allowance for accounts receivable

 

 

(5)

 

15

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Increase in trade and other accounts receivable

 

 

(304)

 

(44)

 

(Increase)/decrease in inventories

 

 

(115)

 

126

 

Decrease in other operating assets

 

 

3

 

2

 

Increase in trade and other accounts payable

 

 

127

 

1

 

Сash provided by operating activities

 

 

868

 

670

 

Income tax paid

 

 

(177)

 

(53)

 

Net cash provided by operating activities

 

 

691

 

617

 

Cash flows from investing activities

 

 

 

 

 

 

Purchases and construction of property, plant and equipment and
intangible assets

 

 

(232)

 

(288)

 

Proceeds from sale of property, plant and equipment

 

 

2

 

-

 

Proceeds from repayment of loans given

 

 

41

 

85

 

Placement of bank deposits

 

 

(217)

 

(248)

 

Withdrawal of bank deposits

 

 

12

 

158

 

Interest received

 

 

1

 

4

 

Contribution to share capital of joint venture

4

 

(18)

 

(55)

 

Net cash used in investing activities

 

 

(411)

 

(344)

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from borrowings

 

 

139

 

938

 

Repayment of borrowings

 

 

(652)

 

(116)

 

Payments on leases

 

 

(5)

 

(4)

 

Interest paid

 

 

(8)

 

(2)

 

Dividends paid to Novolipetsk Steel shareholders

 

 

(100)

 

(308)

 

Net cash (used in)/provided by financing activities

 

 

(626)

 

508

 

Net (decrease)/increase in cash and cash equivalents

 

 

(346)

 

781

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(7)

 

(38)

 

Cash and cash equivalents at the beginning of the year

3

 

842

 

713

 

Cash and cash equivalents at the end of the period

3

 

489

 

1,456

 

 

 

 

 

 

 
                 

 

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