Azovstal cuts losses in 3Q13
24 October 2013
Azovstal (AZST UK) reported on October 24 a 10% yoy decrease in revenue to USD 1.96 bln in 9M13, though the company’s EBITDA and bottom line improved significantly. The steel maker reduced its negative EBITDA more than threefold to USD 40 mln and cut its net loss by 31% to USD 166 mln. Azovstal also posted brighter financial results in 3Q13 on a qoq basis. Despite 2.5% qoq decline in revenue to USD 651 mln, its negative EBITDA improved to USD 2.2 mln (almost breakeven on an EBITDA basis) from USD 13 mln, while its net loss declined to USD 39 mln from USD 51 mln.
Roman Topolyuk: Azovstal’s financial results imply that average cost per ton declined steeper (-4% qoq in 3Q13) than average selling price (-2%), which led to improved earnings. That coincides with almost a 3% qoq decline in average market prices of iron ore and scrap in 3Q13. However, we don’t see reasons for a significant turnaround yet, as 4Q13 will bring a seasonal weakening of steel product prices.
