NLMK Group (LSE, MOEX: NLMK), reports financial results for Q4 and 12 months. 20191 Revenue in Q4 was $2 312 million, EBITDA margin - 21%. Free cash flow (PSD) in Q4 rose to $338 million (+36% QoQ). The Board of Directors recommended to approve dividends for the 4th quarter in the amount of 5.16 RUB/share (148% SDS) in accordance with the dividend policy.
Key findings of the 12 months. 2019
- Revenue down 12% y/y to $10.6 billion amid declining steel prices and reduced sales volumes in connection with capital repairs in the blast furnace and steel production NLMK.
- EBITDA was $2.6 billion (-29% y/y) amid declining revenues and narrowing of price spreads between steel and raw materials. EBITDA decreased to 24% (-6 p. p. yoy).
- Free cash flow totaled $1.5 billion Reduction to last year 25% associated with a reduction in EBITDA and a growth of investments in the framework of the implementation of Strategy 2022.
- Revenue down 10% QoQ to $2.3 billion amid the decline in average selling prices and increasing the share of semi-finished products in the sales portfolio.
- EBITDA decreased to $480 million (-27% QoQ) because of the rapid decline in steel prices relative to raw materials. EBITDA decreased to 21% (-4 p. p. QoQ).
Free cash flow increased to $338 million (+36% QoQ) amid falling prices of stocks and implementation of complex of measures on management of working capital.
Key results Q4 2019
Comment Vice-President, Finance, NLMK Group Shamil Kurmashov:
"the Situation in the steel markets in 2019 was quite difficult. In the second half prices fell below the average level over the cycle, reaching values at which, according to our estimates,
80% of the production volume of the industry has brought negative financial results. The rise in the cost of raw materials put additional pressure on the profitability of companies in the sector.
due To low market NLMK spent substantial capital repairs of the blast and Converter production, which led to a decrease in sales volumes in 2019 by 3% yoy.
Revenue NLMK Group grew 2019 12% yoy, EBITDA was $2.6 billion, which is 29% lower than in the previous year. A major factor in the decline of the financial result was a decline in steel prices. The EBITDA margin decreased by 6 percentage points yoy to 24%.
In 2019, we received the first results from the implementation of Strategy 2022. The cumulative structural effect of the programs of the operating efficiency and investment projects to EBITDA was more than $200 million a year (to the base cost 2018).
the Net debt/EBITDA € 0.7 H. the figure was associated with the active phase of implementation of the investment program under the Strategy, 2022, and increasing dividend payments with a change in dividend policy in March 2019.
Free cash flow was $1.5 billion in Positive free cash flow and maintaining Net debt/EBITDA below 1.0 x allowed management to recommend to the Board of Directors of NLMK to pay $500 million in dividends by the end of the 4th quarter."
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Presentation_NLMK_IFRS_Q4_2019.pdf
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Financial_statements_NLMK_IFRS_12m 2019_USD_RUS.pdf
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financial_and_operating_data_4q_2019.xlsx
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NLMK_Financial_Release - Q4 2019_RUS.pdf
