NLMK Novolipetsk Steel Mill

NLMK is one of the world's largest metallurgical companies. NLMK produces cast iron, slabs, cold-rolled, hot-rolled, galvanized, dynamic, transformer steel and polymer-coated steel as well as a wide range of long products.

In 2009, the Company delivered supplies to more than 70 countries in Europe, South and North America, Asia, Africa, and the Middle East. NLMK Group produces 17% of all Russian steel. NLMK ranks third in Russia among steel and rolled products.

Among the main products of Novolipetsk Metallurgical Plant are pig iron, slabs, hot-rolled steel, as well as various types of products with a high share of added value, such as cold-rolled steel, electrical steel and other special types of sheet rolled products. NLMK is one of the largest manufacturers of electrical steels in the world, and holds a leading position in Russia in the production of cold-rolled, galvanized and polymer-coated steel.

NLMK Group, 2019

Information technology in the company

Main article: Information technology at NLMK

Performance indicators

2023: Revenue growth by 5.5% to RUB 698.9 billion

The revenue of Novolipetsk Metallurgical Plant (NLMK) in 2023 reached 698.9 billion rubles, which is 5.5% more than a year earlier. The company's net profit during this time rose by 15.5% and reached 221.4 billion rubles. Such data on Russian accounting standards (RAS) were published at the end of March 2024.

From the materials of NLMK it follows that in 2023 the company's profit from sales amounted to 127.8 billion rubles against 27.6 billion rubles for 2022. Profit before tax amounted to about 251.3 billion rubles.

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NLMK's gross profit in 2023 more than doubled to 211.7 billion rubles (102.4 billion rubles in 2022), the cost of sales decreased to 487.2 billion rubles (559.8 billion rubles in 2022).

According to RAS reports, at the end of 2023, NLMK had 190 billion rubles of cash, including deposits. According to BCS analysts, the data do not allow us to draw a qualitative conclusion about the value of the group's net monetary position, but they confirm that the company has a significant cash cushion.

According to the reporting, the company's assets by the end of 2023 amounted to 978.51 billion rubles. NLMK's non-current assets amounted to 461.14 billion rubles, current assets - 517.37 billion rubles. Capital and reserves by the end of 2023 reached about 683.77 billion rubles.

According to RAS, NLMK's long-term liabilities by the end of 2023 were 84.44 billion rubles. Short-term liabilities are 210.3 billion rubles.

NLMK's operating cash flow for 2023 amounted to 12.68 billion rubles, the company's investment cash flow - 120.94 billion rubles. The balance of cash flows from financial operations turned out to be negative - at minus 90.87 billion rubles.

Independent Auditor's Report on Accounting (Financial) Statements for 2023

2021: Revenue growth by 75%, to $16.19 billion, profit - to $5.04 billion

The largest steel producer in Russia NLMK in 2021 increased revenue by 75% compared to 2020 - to $16.19 billion. This increase was facilitated by an increase in average sales prices and an increase in the share of finished products in the sales portfolio. The company's net profit increased 4.1 times, to $5.04 billion from $1.24 billion in 2020.

The net debt of NMLC increased by 17% and as of December 31, 2021 amounted to $2.92 billion. Its ratio to EBITDA was 0.4x. Free cash flow in 2021 increased 2.9 times, to $3.25 billion, due to the growth of the financial result. This was partially offset by an outflow of funds to replenish working capital amid rising prices for metal and raw materials.

At the end of 2021, NLMK increased steel production by 10% compared to the previous year - to 17.4 million tons. The production of iron ore raw materials increased by 8%, to 20 million tons, and its sales to third parties decreased by 16%, to 0.7 million tons. Sales of steel products in Russia increased by 9% (to 7.3 million tons), in the European Union - by 10% (to 3.4 million tons). In North America, sales decreased by 5%, to 2.3 million tons.

According to NLMK Vice President of Finance Shamil Kurmashov, by the end of 2021 there was a normalization of steel demand in the US and European markets, which was accompanied by an increase in inventories and caused a slowdown in consumer activity and, as a result, a decrease in steel prices. The fall in domestic and export prices in China amid low demand in the construction segment also contributed to a downward price trend, he said.

By the end of 2021, NLMK Group's production assets are located in Russia, Europe and the United States. The main site of the company is located in Lipetsk, where about 18% of all Russian steel and about 80% of the group's steel products are produced.^[1]

History

2023

Sale of assets in the Kaluga region and in the Urals for tens of millions of rubles

In September 2023, Vladimir Lisin's NLMK Group sold long-range plants in the Kaluga Region and the Urals. The buyer is Promsort, the structure of the main owner of the Industrial and Metallurgical Holding (PMH) Yevgeny Zubitsky.

According to the Vedomosti newspaper, the subject of the transaction was NLMK-Kaluga LLC (owned by NLMK-Sort LLC and NLMK-Metiz LLC) and Vtorchermet NLMK LLC. The first of these enterprises is located in the Borovsky district of the Kaluga region: this is a new generation electrometallurgical plant, which includes electric steelmaking and rolling production, located next to sources of raw materials and main consumers. In turn, Vtorchermet NLMK with its main office in Yekaterinburg unites enterprises for the procurement and processing of ferrous scrap.

NLMK sold long-range plants in the Kaluga region and in the Urals

Vtorchermet NLMK is a raw material division of NLMK-grade, which acts as the management structure of NLMK's long-range division, including NLMK-Ural. At the same time, the NLMK-Metiz plant is one of the largest manufacturers of metalware in Russia.

As of the beginning of September 2023, the amount of the transaction between the NLMK Group and Promsort was not officially announced. According to market participants, the value of these assets may range from 40 billion to 80 billion rubles. Boris Krasnozhenov, head of the securities markets analytics department at Alfa-Bank, notes that the purchase of NLMK assets will help PMH strengthen its position in the long products sector. The perimeter of the PMH includes sites for the production of cast iron, coke, for the extraction and processing of coking coal and iron ore. It is assumed that PMH will be able to use the produced cast iron as a raw material for electric arc furnaces at NLMK's long-range enterprises.^[2]

Appointment of Sergey Karataev as General Director

On December 7, 2023, it became known about the change of president of PJSC Novolipetsk Metallurgical Plant (NLMK). The place of Grigory Fedorishin, who led the holding since 2018, will be taken by Sergey Karataev, the former general director of the First Freight Company (PGK). Read more here.

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