Novolipetsk Steel the LSE listed leading Russian steel producer update mining segment result for six month 2010
| Q2'10 | Q1'10 | Change | |
| Revenue from external customers | 25 | 13 | 91% |
| Revenue from intersegmental optn | 237 | 140 | 70% |
| Gross profit | 178 | 76 | 135% |
| Operating profit | 164 | 62 | 163% |
In USD million
| H1'10 | H1'09 | Change | |
| Revenue from external customers | 38 | 61 | -38% |
| Revenue from intersegmental optn | 377 | 188 | 101% |
| Gross profit | 254 | 101 | 150% |
| Operating profit | 226 | 73 | 209% |
NLMK’s Mining segment comprises Stoilensky, Dolomite and Stagdok. These companies mainly supply raw materials to NLMK’s production facilities in Lipetsk and also sell limited volumes outside the Group.
In H1 2010 Stoilensky, the Group key mining asset produced 5.9 million tonnes of iron ore concentrate up by 18%YoY including 3.0 million tonnes in Q2 up by 5%QoQ. The bulk of the Segment’s revenue over 90% is generated by intersegmental operations, primarily through sales to the Lipetsk plant.
In Q2 2010 market prices for iron ore grew resulting in substantially higher revenue while sales volumes increased only marginally. The Segment’s stable production costs coupled with revenue growth allowed it to achieve higher profitability. Operating profit in H1 2010 increased three fold and by over 2.6 times in Q2. The Segment’s H1 2010 operating profit margin totaled 54%, Q2 operating profit margin amounted to 62%.
