NMLMK financial and operating results for 2Q and 1H 2015

In the first half of 2015, sales of NMLMK, a leading manufacturer of slabs and transformer steel, grew by 4 percent year-on-year to 7.97 million tonnes, driven by higher export sales of semi-finished products.

At the same time, the company's revenue for the first half fell by 20 percent to $ 4,356 million due to lower steel prices compared to the first half of 2014. EBITDA for the reporting period increased by 5 percent compared to the previous year to $ 1,115 million. The effect from the implementation of the efficiency program amounted to $ 102 million.

EBITDA margin in the first half of 2015 increased 6 percent year on year to 26 percent. Investment for the period increased to $ 293 million, up 4 percent on an annualized basis.

At the same time, the company's free cash flow fell 27 percent from a year earlier to $ 537 million. Net debt at an annualized level in the first half of the year decreased by 46 percent and amounted to $ 1,133 million. The net debt to EBITDA ratio was 0.47x. At the same time, the company's net income rose 48 percent to $ 491 million.

In the second quarter of 2015, NMLMK's production capacity utilization reached 94 percent, remaining at the same level. The company's sales increased 1 percent quarter-on-quarter to 4.0 million tonnes. Revenue in the second quarter fell 3 percent on a quarterly level to 2,140 million tonnes, mainly due to lower prices in the steel markets.

EBITDA fell 25 percent over the quarter to 476 million tonnes. EBITDA margin declined 7 percent during the quarter to 22 percent. The company's free cash flow declined 32 percent qoq to $ 218 million. Second quarter net income fell 47 percent to $ 170 million.

According to the forecast, in the third quarter of 2015, an increase in production and sales of products is expected.