The Novolipetsk Metallurgical Plant last year reduced its net profit by almost a third

OJSC Novolipetsk Metallurgical Plant (NLMK) (LSE: NLMK) published its financial results today in 2012, as well as the financial results of its subsidiaries of VIZ-Stal LLC, OJSC STRENSKY GOK, OJSC NSMMZ (Sorting Division of NLMK OJSC), Altai-Cox OJSC.

According to the announced data, NLMK’s net profit last year amounted to 25 billion 151 million 840 thousand rubles, which is 27.45% less than in 2011. At the same time, the profit from the trade in the metal rolling decreased by 47.1% to 12 billion 919 million 325 thousand rubles.

As we have already reported, in 2012, NLMK increased the volume of steel production by 25% to 14 million 900 thousand tons compared to 2011. Sales of metal products over the past year amounted to 15 million 200 thousand tons, which is 18.4% more compared to the previous year.

At the same time, in 2012, NLMK revenue increased by 8.6% to 240 billion rubles due to the growth of sales in the domestic market and in export areas. An additional growth factor was an increase in the share of products with added value, which made it possible to compensate for the overall decrease in steel prices compared to 2011.

"The decrease in operating profit in 2012 compared to last year is associated with a decrease in average steel prices and rising prices for certain types of purchased raw materials and energy resources," the company said.

A significant increase in net profit in the fourth quarter of 2012 compared with the profit from sales is explained by an increase in the amount of accrued intermediate dividends from subsidiaries in the amount of 4 billion 700 million rubles.