Russia’s biggest steel producer in 2014 significantly increased its margins. Commenting on the results, the best in six years, company CEO Aleksey Mordashov says that Severstal in 2014 delivered a 21.2 percent year-on-year increase in EBITDA to $2,203 million, up from $1,818 million in 2013.
The results come despite a 12.1 percent year-on-year reduction in revenue to $8,296 million (from $9,434 million in 2013) impacted by the decline in steel prices globally, the company’s 2014 report reads.
Severstal operates the Olcon iron ore mine in Olenegorsk, Murmansk Oblast, and the Karelsky Okatish, a pellets plant in the Republic of Karelia. According to the company report, ouput from the Olcon mine in 2014 dropped 4 percent, while production at the Karelsky Okatish increased 2 percent.
Like other Russian export companies, among them Norilsk Nickel, Severstal was saved by the about 50 percent weaking of the ruble. That has made company products cheaper on dollar-denominated global markets. Meanwhile, the situation is the opposite in the neighboring Nordic countries where the iron ore industry is in crisis following the low prices. Sweden’s LKAB in 2014 got its results slashed, while Norway’s Sydvaranger mine is on the verge of bankruptcy.
As illustrated by figures from Patchwork Barents, a regional data portal, iron ore production in northern Sweden, Norway and Russia has been stable over several years. While production in Murmansk Oblast has decreased slightly, it has increased in neighboring Finnmark county.
