NEW YORK Russian steelmaker OAO Severstals North American operations recorded higher revenue in the first quarter compared with the fourth quarter of last year as a double-digit rise in sales volumes more than offset lower average selling prices.
Severstals International unit, comprising its Dearborn, Mich., and Columbus, Miss., operations, posted revenue of $930 million for the three months ended March 31, up 14.8 percent from $810 million in the fourth quarter but down 15.5 percent from $1.1 billion in the first quarter of 2012.
The stronger quarter-on-quarter performance came as the units sales volumes rose 15.1 percent to 1.1 million tonnes as Severstals North American mills operated at an average utilization rate above 90 percent in the first quarter, well above the U.S. industry average of 78 percent, the Moscow-based company said.
Severstal Internationals earnings before interest, taxes, depreciation and amortization (Ebitda) soared to $47 million in the first quarter from $6 million in the fourth quarter of last year. The North American division benefitted in the first quarter from a $12-million settlement with a coking coal supplier.
Severstal International outperformed the overall group, which saw first-quarter Ebitda of $425 million increase 21.1 percent from $351 million in the fourth quarter but fall 24.8 percent from $565 million a year earlier on revenue of $3.32 billion, up 6.6 percent from $3.12 billion in the fourth quarter but down 9.7 percent from $3.68 billion in the first quarter of 2012. The company posted net income of $44 million in contrast to a $150-million net loss in the fourth quarter and down 89.7 percent from net income of $427 million in the first three months of last year.
"The global economy continues to experience headwinds putting pressure and increasing volatility on the steel and bulk markets. Although our business model makes us resilient even in challenging times, we remain cautious about the immediate outlook for the industry, which will continue to impact performance as previously anticipated," the company said in its first-quarter earnings report. "Against this background, management continues to focus on cost management and efficiency initiatives together with prudent capital investment programs as we continue to develop the business."