NLMK Group (LSE: NLMK, MOEX: NLMK), a vertically integrated steel company, has published today its Q2 2019 and 6M 2019 operating results.

Q2 2019 highlights:

• Steel output decreased by 5% qoq to 4 m t due to the launch of overhauls at NLMK Lipetsk blast furnace (BF) and basic oxygen furnace (BOF) operations. A 9% yoy steel output reduction is also attributable to this factor.
• Sales declined by 7% qoq to 4.3 m t (-3% yoy), driven mainly by reduced output and sales of commercial slabs and billets. This resulted in a 2 p.p. qoq increase in the share of HVA products in total sales volume (+1 p.p. yoy).
• Sales to “home” markets grew by 11% qoq (+12% yoy) to 3 m t, supported by the seasonal growth in demand for long and flat products in Russia. The share of Group sales to “home” markets increased to 71% (+14 p.p. qoq, +9 p.p. yoy).
• Group sales to export markets dropped to 1.2 m t (-40% qoq; -26% yoy). Export reduction was due to lower export sales of semi-finished products against the backdrop of overhauls at NLMK Lipetsk.

6M 2019 highlights:

• Steel output decreased by 6% yoy to 8.2 m t due to the launch of overhauls at NLMK Lipetsk BF and BOF operations.
• Sales grew by 4% yoy to 8.9 m t, driven by higher demand for finished steel on the Russian market, and due to destocking of inventories accumulated at 2018 year-end at the beginning of the year. The share of HVA products increased by 1 p.p. yoy.
• Sales to “home” markets grew to 5.6 m t (+7% yoy) due to increased demand for finished long products on the Russian market. The Group’s export sales grew by 1% yoy to 3.2 m t.

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