Severstal Turns to Quarterly Loss, Expects Improvement
Stock Chart for Severstal OAO (CHMF)
(Corrects Ebitda figure in second paragraph.)
OAO Severstal (SVST), billionaire Alexey Mordashov’s steelmaker, posted a net loss in the fourth quarter after a profit in the prior three months as prices fell to lows.
The net loss was $150 million after profit of $329 million. Earnings before interest, taxes, depreciation and amortization slumped 36.4 percent to $347 million, missing the $367.4 million average estimate of 13 analysts surveyed by Bloomberg. Sales slid 13 percent to $3.12 billion, Severstal said in a statement.
Steel prices dropped as demand slowed and China increased exports. Benchmark hot rolled coil sold abroad from the former Soviet republics declined to $510 a metric ton in October, the lowest level since January 2010, according to Metal Bulletin data compiled by Bloomberg. Looking ahead, Severstal said today in the statement it sees “slight signs of recovery” this year.
Fourth-quarter results were hurt by a weak global economy and lower steel demand typically seen in Russia in winter, said Mordashov, also chief executive officer, in the statement.
“We believe that we could see some improvement over 2013 in steel, iron ore, coking coal demand,” he said. Global steel market growth may be 2 percent to 3 percent, he said on a call.
Severstal rose 0.6 percent to 332.40 rubles by 1:55 p.m. in Moscow, valuing the company at 278 billion rubles ($9 billion).
For 2012, sales fell 11 percent to $14.1 billion, Ebitda 40.9 percent to $2.12 billion and net income slid 62.6 percent to $762 million.
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