Severstal Distribution grows earnings in first half

Russia’s Severstal says that its distribution arm saw its markets rise, then fall in the first half of 2016, Kallanish learns from the steelmaker. Although this affected revenues, earnings increased due to a combination of decreasing expenses and an increase in higher added value sales, the company says.

Market demand, and hence prices, had fluctuated in Severstal Distribution’s main markets of Russia, Belarus, Ukraine and Northern and Central Europe in H1 2016. Prices fell first of all at the beginning of the year, then rose in March, peaked in April-May and then fell back towards the end of the period.

“In the first half of 2016 Severstal Distribution improved its performance compared to H1 2015,” says the head of Severstal’s distribution division Andrey Alexeev. “We continue to develop metal processing, which allows us to get an additional premium from products with higher added value sales. In the first half of 2016, the volume of sales of products of our steel service centres saw an increase of 19% compared to the same period last year to 190,000 tonnes,” Alexeev adds.

Revenues in H1 2016 fell by -5% year-on-year to $326 million for its distribution arm, Severstal confirms. Ebitda increased however to $27 million, an increase of 57% year-on-year over the same period.