Page 156 - RusRPTNov20

and $46mn in gains from investment projects. In 3Q20, the consolidated cash cost of slab was the lowest since 2016 at just $194/tonne, down 3% q/q.
LFCF decreased 21% q/q to $239mn, but was still 40% above our expectations because of a higher than expected working capital release of $98mn. Capex in 3Q20 was $344mn (slightly above our estimate), which brought the 9m20 figure to $851mn, 77-85% of the reiterated full-year guidance of $1.0-1.1bn. We think the full-year capex figure will be in the guided range, as capex this year was skewed to 3Q20, owing to maintenance of the blast furnace and basic oxygen furnace operations at the Lipetsk site. On the conference call, NLMK indicated that its 2021 capex will likely be flat y/y (at $1.0-1.1bn) due to the rollover of some projects into the next year and the start of the active phase of captive power plant construction. We increase our 2021 capex projection 15% to $1.1bn.
The BoD recommended a 3Q20 dividend of R6.43 per share, or $500mn in total, for a 3.8% yield. This includes the regular payment for 3Q20, as stipulated by the dividend policy, in the amount of $250mn, which was in line with our estimate. NLMK will also pay out $250mn to compensate for low dividends in 4Q19. NLMK previously guided that it would make up for the weak 4Q19 dividend if market conditions improved, but it did not provide the exact timing for this.
Novolipetsk Metallurgical Kombinat​ (NLMK) reported a generally upbeat 3Q20 trading update on October 12. ​Volumes of finished steel gained 2% q/q thanks to the recovery in the domestic market.
Prices in Russia for uncoated flat steel products (HRC, in $/t) declined 3% q/q (-21% y/y) while prices for long steel (in $/t) gained 1% q/q (-21% y/y). Pricing for steel slab, a product sold mainly on export markets, was up 22% q/q (+2% y/y, FOB Black Sea). NLMK will report its 3Q20 results on 21 October.
Crude steel production (excluding crude steel production at NHB) remained unchanged on a q/q basis (0% q/q, +3% y/y) at 3,824kt. Volumes of consolidated steel sales grew 2% q/q (+11% y/y) while slab volumes dropped 12% q/q (+31% y/y) and finished steel sales grew 14% q/q (+1% y/y). Volumes of flat steel sales increased 5% q/q (-3% y/y) while volumes of long steel sales jumped 50% q/q (+13% y/y), albeit from the low base of 2Q20.
There was an increased share of sales to local markets (60% vs. 53% in 2Q20) driven by higher volumes of rolled products, particularly within NLMK’s Russian steel division. Prices in Russia for uncoated
156 ​RUSSIA Country Report​ November 2020 www.intellinews.com