The Severstal Board of Directors recommended dividends against the backdrop of a 79% increase in net profit

Severstal (MOEX: CHMF) presented operating and financial results for 2023. Net profit amounted to 193.88 billion rubles, which is 79% more than in 2022. According to message company, profit growth is due to a very low debt load. Against this background, the company’s board of directors recommended the payment of dividends.

EBITDA increased to RUB 262,229 million. (+22%), profitability on this indicator recovered to 36%. “This growth reflects the successful implementation of our marketing strategy with a focus on the domestic market, high-value-added products and providing customers with unique integrated solutions and market-leading service,” Severstal said in a statement.

The company’s revenue increased by 7%, to RUB 728,314 million. Severstal attributes this to an improvement in the product structure against the backdrop of a growing share of high value-added products.

“Despite the difficult economic situation and the challenges we faced in 2022, by the end of 2023, by focusing on the domestic market, we were able to achieve significant success. The recovery in our results reflects both external factors and the efforts of the entire company team. At the end of 2023, GDP growth is estimated at 3.5%, steel consumption increased by 7% to a record 46.3 million tons of steel,” Alexander Shevelev, CEO of Severstal Management JSC, commented on the financial results. He noted that average prices for hot-rolled steel in Russia in 2023 were 2% lower than last year. However, increased demand for steel allowed increased capacity utilization, as a result of which iron and steel production increased to 11.3 million tons (+3% and +5% y/y).

The Severstal Board of Directors also recommended dividends in the amount of RUB 191.51. per share. The register of shareholders for receiving dividends will be closed on June 18, 2024. The dividends are planned to be approved at the company’s general meeting, which will be held on June 7.

The owner of Severstal, Alexey Mordashov, fell under EU sanctions at the end of February 2022. In March of the same year, Severstal announced that it had completely stopped exporting steel products to EU countries. In June, the United States imposed sanctions against Mr. Mordashov and Severstal. On August 23, 2023, Severstal was included in the Canadian sanctions list.

At the end of 2023, steel production in Russia almost reached the record level of 2021 – 75.8 million tons of steel, which is 5.6% more than in 2022 (in 2021 – 76 million tons). Global production in 2023 decreased slightly to 1.849 billion tons.

Read more in the Kommersant article. “Steel flows as if nothing had happened”.