Severstal posts 1Q 2010 net loss of $785 million
Russian steelmaker, severstal, has posted a 1Q 2010 net loss of $785 million under IFRS.
The bottom line compares with a 1Q 2009 net loss of $656 million, with 1Q 2010 EBITDA coming in at $492 million, compared to an EBITDA of minus $117 million for 1Q 2009, as 1Q revenues rose 34% year on year to $3.142 billion.
Severstal noted that that the improving financial and market conditions experienced through 3Q and 4Q 2009, had been stymied during 1Q 2010 by Russian steel sales volumes being hit by reduced exports through the port of St Petersburg and consequent backlogs, and rising costs for raw materials, energy, and transport. It also noted that the size of the 1Q net loss also reflected an $855 million hit from the discontinuation of European operations.
CEO, Alexey Mordashov, noted that underlying market conditions were continuing to improve, and stated that the company was in a good position to capitalize on rebounding steel demand.
“Q1 2010 saw improving underlying trading conditions although our results were affected by increased input costs and a backlog of exports created by bad weather. These results also show a significant improvement on the same period in 2009, underscoring the success of management initiatives put in place to address the downturn that started in late 2008. In the current trading environment, our flexible cost base, vertically-integrated model and solid financial position provide us with competitive advantage to benefit from growing demand for steel and invest in long-term growth.”