Russian steelmaker Severstal is blaming lower realised prices and sales volumes at its Russian Steel and Resources division as well as softer demand and temporary production interruptions for its Q1 fall in revenue.
Revenues fell 9.5% year-on-year from US$3.322 billion in Q1 2013 to $3.007 billion in 2014.
CEO Alexey Mordashov said that Severstal had delivered 'another resilient set of results in what was a challenging quarter'. He commented that the company continued to build on strong progress made in 2013 to reduce costs and enhance efficiency and this has enabled the Group to 'broadly maintain EBITDA margin against the previous quarter'.
Mordashov said that there was still room for further improvements, particularly where customer care and product quality were concerned and that the company would continue to focus upon improving its health and safety record.
Where Q2 was concerned, Mordashov said that conditions will remain challenging. "We anticipate higher steel prices across our key markets," he said, adding that Q2 would see the completion of the Balakovo long products minimill – an important investment project for Severstal. "This will better position Severstal to delivery on opportunities afforded by real estate and infrastructure growth in southern Russia," he said.
The company will remain focused on driving its financial performance 'through the continued delivery of our stated strategy focused on cost control, efficiency and customer care' all of which would be underpinned by highly efficient assets 'and the strength of our vertical integration'.