Evraz warns of tough 2012 as profit falls back

EVRAZ, Russia’s largest steelmaker, has said that the outlook for the global steel industry will remain tough this year after its 2011 net profit missed market expectations by 31 per cent.

The FTSE 100-listed company, part-owned by tycoon Roman Abramovich, posted 2011 net profit of $453m (£285.3m) – below the $661m forecast by analysts and down four per cent from 2010. However, revenue in the period reached $16.4bn, ahead of the $16.16bn forecast and up 22 per cent year-on-year.

“In the near-term, the outlook for the global steel industry is likely to continue to be challenging in 2012,” chief executive Alexander Frolov said.

“Our current expectation is for a modest overall rise in steel consumption, driven by demand from the emerging markets.”

The company reported in January that its 2011 crude steel output rose three per cent to 16.8m tonnes. Evraz said first quarter prices were flat while costs are up because of the strengthening rouble.

It expects volumes of finished steel products to increase slightly this year.

The company will make a final 2011 dividend payment of $228m, or $0.17 per ordinary share, it said.