(Corrects name of speaker in paragraphs 6-7 to Chief Executive Oleg Bagrin from Senior Vice President Grigory Fedorishin)
MOSCOW, April 28 (Reuters) - 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 domestic demand.
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 year-on-year.
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 Croft)