In 2003, internal market consumption of steel increased by 14%, while global growth added up to 6.5 %. Considering these trends Severstal has increased output and shipment of finished products, setting its priorities on the domestic market.

Net income based on international accounting standards jumped to US $ 3,202 million  - a 40.87 % increase from 2002. This big of a growth in net sales was largely due to an increase in prices for rolled steal - Severstal's main product - as well as an increase in overall output and sales. A positive price trend has begun in the second half of 2002 and continued through the entire 2003.

In 2003, the consolidated operating profit of Severstal according to IAS grew up to US $ 806 million from US $ 288 million in 2002. This led to a growth in operating margin from 12.67% in 2002 to 25.17% in 2003.

Tax payments in 2003 were US $ 162 million, showing an increase from US $ 63 million in 2002. As of December 31, Severstal's net consolidated profit (IAS) totaled US $ 591 million, exceeding US $ 180 million in 2002.

Severstal financial performance, US $ million.

	2003 ???	2002 ???	Change
Net of sales	3,202	2.271	40.87 %
Cost of sales	(1.914)	(1.509)	26.84 %
Operating profit	806	288	179.86 %
Operating margin	25.17 %	12.67 %
EBITA*	1002	471	112.73 %
EBITA margin	31.29 %	20.72 %
Net profit	591	180	228.33 %
Net margin	18.46 %	7.92 %

In 2003, Severstal focused its strategy on the domestic market. The share of the domestic market sales in the overall sales rose from 51% in 2002 to 58% in 2003. Severstal paid increased attention to the domestic market because of lower shipment costs and a steady growth in the domestic market demand in a number of industries. This allowed building long -term relationships with strategic internal clients.

In 2003, the most important domestic clients were in the automotive industry and in the pipe-making industry. The role of the construction industry and the construction materials production also became more important.

In 2003, the share of export sales was 42%. With 32.8% of export sales revenue made in Europe, it has remained the strategic priority, seeing an increase from 30% in 2002. In 2003, the share of sales to Central and South-East Asia in export sales earnings reached 38.7% as compared with 32.2% in 2002. This increase was linked to a growing demand in China and large volumes sold to the North Korean Republic. On the whole, Severstal is satisfied with its financial results for 2003. It's fair to say that this was the best financial year in the company's post-soviet history, producing a positive reaction in the securities market.