NLMK Group (LSE: NLMK, MOEX: NLMK), a vertically integrated steelmaker, has published today its 
Q1 2019 financial results.

Q1 2019 key highlights:

·                  Group revenue in Q1 2019 decreased by 5% qoq to $2.87 bn, amid lower average sales prices.

·                  Year-on-year, the revenue increased by 3% thanks to a higher sales volume (+11% yoy), which was offset by lower average sales prices.

·                  EBITDA totalled $695 m (-18% qoq; -14% yoy): this reduction was driven by narrowing price to raw material spreads amid declining steel prices.

·                  Free cash flow increased by 35% qoq to $678 m driven by working capital release.

·                  Net debt/EBITDA remained low at 0.26õ.

Comment from NLMK Group CFO Shamil Kurmashov:

“In Q1 2019 there was a multidirectional trend in steel consumption in our key markets: in Russia and the US demand grew qoq, while in the EU there was a slowdown in activity among steel product consumers.

“NLMK revenue declined by 5% qoq to $2.9 bn due to steel price adjustment. Year-on-year, revenue increased by 3% yoy, due to, among other things, strong slab sales to captive rolling assets early last year. In Q1 2019, 56% of steel products were sold in the Group’s home markets - in Russia, the EU, and the US.

“Sales of the finished steel inventories in the context of steel price correction and the seasonality factor led to an 18% qoq reduction in EBITDA (-14% yoy). The Company managed to increase its free cash flow substantially, reaching $678 m (+35% qoq) on the back of leaner finished steel inventories in the supply chain and a seasonal reduction in scrap inventory. In addition, in Q1 2019 the Company maintained a low capex level, which created a solid foundation for quarterly dividend payout. The Company's debt remained low in the end of Q1 2019: Net debt/EBITDA ratio stood at 0.26õ.”

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