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. Last Updated: 07/27/2016

Evraz Core Profit Beats Forecasts

Steelmaker Evraz reported a forecast-beating 43 percent rise in 2006 core profit, on high steel prices and consolidation of its European assets, and forecast growth of up to 60 percent in the first half of this year.

Earnings before interest, tax, depreciation and amortization, or EBITDA, rose to $2.65 billion, the company said Thursday, above an average forecast of $2.46 billion in a poll of 11 analysts.

The firm's EBITDA margin rose to 32 percent from 28.6 percent in 2005, beating a forecast 29.9 percent.

Evraz is the only Russian steel firm among those that have already released results to increase profitability.

Severstal's operating margin fell to 24 percent in 2006 from 27 percent in 2005. Novolipetsk Steel, the country's No. 4 by output and the most profitable steel maker, reported a fall in its EBITDA margin to 44 percent from 48 percent.

Evraz said it expected strong growth in sales in the first half of 2007 with revenues likely rising by 45 percent to 55 percent from $3.83 billion in the first half of 2006 and EBITDA increasing by 50 percent to 60 percent.

Evraz said 2006 net profit rose by 50.9 percent to $1.39 billion after revenues increased by 27.4 percent to $8.29 billion. Both figures were in line with expectations.

"Fiscal 2006 was the best year in the history of the Evraz Group," said Chairman and CEO Alexander Frolov.

"Steel sales volumes have climbed significantly on the back of an upward price trend in the world steel market that started in the second quarter of 2006, and were supported by growing steel consumption worldwide," the company said.