In Q3, NLMK Group sales remained stable at 3.8 million tonnes (+0.2% q-o-q). NLMK grew its finished product sales in the domestic market to 1.283 million tonnes (+5% q-o-q), capitalising on demand from its key consumers, i.e. Russian construction and machine-building sectors. The share of domestic sales increased to 34% (+2 p.p.). As demand for flat steel in the export markets weakened, NLMK grew its slabs sales as these enjoyed stable demand.

In 9M 2012, NLMK Group produced 11.2 million tonnes of steel, up 24% y-o-y. Around 95% of all steel was produced domestically.

Outlook

In Q4, the Group’s steel production is expected to remain unchanged at 3.8 million tonnes. NLMK Group confirms its previously announced steel production forecast for 12M 2012 at 15 million tonnes.

NLMK, the LSE-listed leading steel producer, today announces its consolidated US GAAP results for Q2 and 6 months of 2012.

Despite challenging market conditions NLMK delivered a set of strong operating and financial results. s Q2 sales remained largely flat at 3.8 million tonnes. Q2 revenue grew by 5% q-o-q to US$3.3 billion, driven by the better product mix and hence the slight strengthening of prices. An improved operating performance and reduced costs enabled a 38% increase in our Q2 EBITDA to US$596 million. The Q2 EBITDA margin was around 18%, 4 p.p. up q-o-q.

Outlook:

Due to weaker market conditions globally Q3 revenue could decrease 5-10%, while the sales volume will remain stable for the entire Group. At the same time, the effect of decreasing steel prices will be partially offset by the decrease in raw material prices. The EBITDA margin is expected to be in the range of 16-18%.

In Q2, NLMK Group’s steelmaking capacity utilisation rates continued to improve. Crude steel production amounted to 3.842 million t (+5.7% q-o-q), of which 93.6% was produced domestically. The production of finished steel increased to 4 million t (+7% q-o-q).
Total sales remained largely in line with the previous quarter’s level at 3.8 million t (-1.6% q-o-q). High seasonal demand from the domestic construction segment partially offset the softening in consumer activity in the export markets. Sales of long products and metalware increased substantially (by over 20% q-o-q). Q2 domestic sales accounted for 37% of total steel product sales (+3 p.p. q-o-q). The share of finished steel in total sales increased
3 p.p. q-o-q to 74%. Sales of slabs to the Group’s EU and US operations increased to 0.753 million t (+5.5%).
OUTLOOK
In Q3, NLMK’s crude steel production is expected to remain stable despite the price softening in the steel market that started in the second half of Q2.
We expect Q2 consolidated financial results to be stronger than Q1 results. Sales revenue is expected to be around $3.2 billion, and EBITDA margin may reach around 18%.

The Group's steel output increased 14% q-o-q to 3.6 million t, which corresponds to over 90% utilisation rate, as the new BF-7 at Novolipetsk (NLMK’s main production site in Lipetsk) gradually increased its capacity load and the second EAF at NLMK Long Products was re-launched following transformer repairs in January 2012.

Total sales in Q1 2012 sales grew 6.4% q-o-q to 3.8 million t. Flat steel sales increased by almost 14%, and long steel sales, including metalware, grew 16.7%. NLMK continued to increase its presence in the domestic market growing its sales by 2% sequentially to 1,3 million t which corresponds to 35% of total sales for the quarter.

Slab sales to the Group’s international rolling operations in Q1 increased 57% to 0.7 million t as they replenished inventory following the destocking that occurred in the previous quarter.

Exports accounted for 65% of our sales, with the bulk going to our traditional markets, i.e. Europe, the US, the Middle East and South-East Asia.

Outlook
We expect Q2 sales volumes to increase, supported by the seasonal upturn in demand. We are keeping our previous crude steel production forecast for 2012 unchanged: the output will total about 15 million t.
for more information please visit our web site ссылка or follow us on Twitter at NLMK_IR
your questions you may send to our investor relation department at st@nlmk.com

The Board of Directors of NLMK has recommended that the General Shareholders' Meeting declare dividends for 2011 on ordinary issued shares in the amount of RUR2.0 in cash per ordinary share (1 GDS = 10 ordinary shares). Taking into account the previously paid interim dividends for the first half of 2011 of RUR1.40 per ordinary share, additional payment will amount to RUR0.60 per ordinary share. (The dividend payout ratio is ~30% of 2011 US GAAP consolidated net income).
AGM participation is based on the NLMK Shareholders’ Register as of midnight April 10/11th, 2012
For more information, please contact Investor Relations Department:
Sergey Takhiev
+7 495 915 1575
st@nlmk.com
you may also follow us on Twitter at @NLMK_IR

Board of Directors of NLMK took the decision to hold the Annual General Shareholders' Meeting on 30 May 2012. The agenda for the AGM includes
Approval of the Company's 2011 annual report; annual financial statements, including income statement; allocation of profit (including dividend declaration) for the financial year 2011;
Election of members to the Company's Board of Directors;
Election of the President of the Company (Chairman of the Management Board);
Election of members to the Company's Internal Audit Commission;
Approval of the Company Auditor;
Approval of the compensation to the members of the Board of Directors of NLMK.
AGM participation is based on the NLMK Shareholders’ Register as of midnight April 10/11th, 2012
For more information, please contact Investor Relations Department:
Sergey Takhiev
+7 495 915 1575
st@nlmk.com
you may also follow us on Twitter at @NLMK_IR
Thank you.

On the 5th of April NLMK published on its website forth quarter and 12 months 2011 Russian Accounting Standards financial results for its major Russian subsidiaries in accordance with Russian regulatory requirements. The Russian Accounting Standards results of NLMK Group's major Russian subsidiaries are not indicative of the financial condition or results of these entities under US GAAP published on March 27, 2012.
For further information please visit our web-site ссылка or follow us on twitter at NLMK_IR.

On the 6th of March NLMK has commissioned a new 4 mtpy RH vacuum degasser intended for achieving high-quality of steel before casting at continuous casting machines at its main site in Lipetsk. Due to this project with the total investment of about RUR 3.9 bn the company's rolling assets in Russia and- Europe will be covered by high-quality slabs.

After high-performance degasser is put Into operation, steel product mix is expected to be expanded by introducing new steel grades with low carbon and hydrogen, including grades for shipbuilding application, automotive and pipe industry.

For more information, please visit our web-site ссылка Thank you.

On the 6th of February 2012 NLMK proudly announced record results at its US based assets including NLMK Indiana which ended 2011 setting 10 new production records including record steel production of 675,000 cast tons achievmg a run rate of over 90%. Other US assets also delivered a strong set of results beating their previous records both in terms of productivity and quality.

For more information, please visit our web-site ссылка or follow us on Twltter at NLMK_IR.

Thank you!

In 2011 the Group’s revenue grew 40% to $11.7 billion driven by increased sales and a better product mix. At the same time our profitability was not immune to the overall deterioration in the steel market as the European financial crisis hit a new peak in H2 2011, and the Russian segment’s costs grew c.20%. Our EBITDA narrowed by 3% year-on-year and totaled $2.3 billion. EBITDA margin was 19.5%, while net profit increased 8% to $1.4 billion.

In H1 2011 the Company paid interim dividends in the amount of $264 million, or c. 30% of the Group’s net profit for the period.

In 2011 the Group continued executing its growth strategy. Our annual crude steel output increased to a record 12 m t. Finished rolled steel production increased by 24% to 8.8 m t, including 2.4 m t produced at our international businesses, including the European and North America operations acquired in 2011.
In 2011 NLMK invested over $2 billion into new and existing production facilities. We launched a new BF#7 and a new BOF at our Lipetsk site, increasing our crude steel production capacity by a third. This new project was the largest incremental increase in steelmaking capacity in the Russian steel industry over the last 25 years. Following the acquisition of rolling assets in the EU and USA in H2 our Company doubled its slab processing capacities into finished flat steel.

NLMK’s financial standing remains one of the most sustainable among steelmaking companies, and in 2011 the three leading credit agencies upgraded NLMK’s rating to investment grade.

OUTLOOK

In 2012 we plan to increase crude steel output to over 15 mt on the back of incremental capacity growth thus becoming the largest steel producer in Russia. In the midterm we expect a gradual improvement in our financial performance as we improve the operating efficiency at the newly launched facilities in Russia and reduce costs at our international assets, as well as strengthen upstream vertical integration at our domestic operations. The amount of 2012 investments will total $1.7 billion.