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. Last Updated: 07/27/2016

Severstal Says Profits Doubled

Severstal, the country's largest steelmaker including foreign assets, announced Monday that it more than doubled net profit in the first half of 2007 by selling more steel at higher prices in Russia and Europe.

Severstal also said it planned to spend more than half of a planned $10 billion expansion domestically. The money will be spent through 2011 on mining and metals production in Russia, Italy and the United States, the company said. Alexei Mordashov, who controls Severstal, has allocated $6 billion to Russia, including two 1-million-ton mills.

The firm, the country's second-largest coking coal miner, also plans to invest $2 billion by 2011 with the aim of expanding coal production by 30 percent from 9.7 million tons.

"In light of the strong outlook for the global steel market, Severstal believes there is the potential to invest significant capital in ... growth projects between 2007 and 2011, particularly in Russia," Mordashov said.

Severstal recorded first-half profit of $999 million, up 135 percent year on year. Severstal said first-half 2007 revenue rose to $7.71 billion, up 31 percent from $5.88 billion a year ago. Earnings before interest, tax, depreciation and amortization rose to $2.09 billion.

"We continue to be well placed to benefit from the growing Russian economy and stable steel markets in Europe," Mordashov said.

Reuters, Bloomberg