Russian steel giant Evraz saw its profits fall by 99.5 per cent in the first half of the year after sanctions were slapped on the firm in May and demand for its products dried up.
In an update this morning, the firm said that net profits totalled $6m in the six months to June, down from $1.2bn in the same period last year.
Evraz has been rocked by sanctions and governance issues in the wake of war in Ukraine, with the UK sanctioning its part-owner Roman Abramovic and causing a mass boardroom resignation.
“Recent geopolitical tensions have given rise to significant corporate governance and operating challenges for Evraz,” Chief Executive Officer, Aleksey Ivanov, said.
“On top of that, strong rouble, declining demand for our products, and increased competition on Evraz’s traditional markets present additional headwinds.”
Its January-June core earnings, known as EBITDA, rose by 19.4 per cent year on year to $2.5bn however, due to higher coal prices and an improved performance by its North American assets, Evraz said.
The firm reported negative free cash flow of $59m, compared with positive $836m in the first half of last year, following a surge in working capital due to an increase in inventory and receivables amid hindered exports.
Shares in Evraz were suspended from trading on the London Stock Exchange in the wake of Russia’s invasion, after the government highlighted its strategic importance to Russia.