(Corrects name of speaker in paragraphs 6-7 to Chief Executive
Oleg Bagrin from Senior Vice President Grigory Fedorishin)
MOSCOW, April 27 Russian steelmaker NLMK's
core earnings more than doubled in the first quarter,
beating expectations, on higher prices and export sales and an
improving domestic economy.
Steel manufacturers in Russia, such as market leader NLMK
and its closest competitor Evraz, have struggled over
the last two years as oversupply helped to push world steel
prices to 11-year lows and Russia's economic crisis sapped
But prices have picked up and prospects for the sector are
expected to improve further this year on expectations of the
Russian economy returning to growth.
"In Q1 2017, NLMK Group was able to grow sales in the EU and
U.S. markets against a backdrop of higher internal demand," NLMK
Chief Financial Officer Sergey Karataev said in a statement.
NLMK, controlled by Russian billionaire Vladimir Lisin,
posted earnings before interest, taxation, depreciation and
amortisation (EBITDA) totalled $618 million, beating an average
of analysts' forecasts in a Reuters poll of $598 million. EBITDA
was $290 million in the first quarter of last year.
Chief Executive Oleg Bagrin said NLMK's stronger earnings
could lead management to recommend a first quarter dividend
payout higher than that outlined in its policy.
Speaking on a conference call with investors, Bagrin said
the matter would be discussed at a board meeting on Friday.
"Probably, given the financial position and performance of
the company, the dividend payout proposed by the management will
be above the policy targets," he said.
NLMK's current policy states that dividend payouts are to be
made in the range of 50 percent of net income and 50 percent of
free cash flow, as long as the company's net debt to EBITDA
ratio is one or below.
Its net debt to EBITDA ratio was 0.4 in the first quarter
while free cash flow totalled $208 million, down 24 percent
NLMK's revenue rose 37 percent year-on-year to $2.2 billion
on higher prices for its products, the company said.
Net profit was $323 million in the first three months of
2017, versus $57 million in the same period last year when the
company said its earnings were hit by losses incurred from
exchange rate fluctuations.
(Reporting by Jack Stubbs; Editing by Jane Merriman and Adrian