Azovstal increases net loss fourfold in 2012

Azovstal (AZST UK) endured a USD 333 mln net loss (4.2x deeper yoy) in 2012, the company reported in its AGM announcement on March 21. The result implies a 10% qoq larger quarterly loss at USD 94 mln in 4Q12. The AGM is scheduled for April 25 and its agenda contains an item to approve significant deals.

Roman Topolyuk: Azovstal finished the year with a net loss margin of 12%, we estimate, compared to a 8% margin reported in 9M12. The bigger losses and negative margins resulted partly from decreased production 18% yoy to 4.6 mmt. Another factor was depreciating raw material prices, which lagged (-12-14% yoy) the pace of decreasing steel prices (-18% yoy). Shareholders who vote against approving significant deals will receive the right to sell their shares back to the company at UAH 0.6325, we estimate.