| Q3'11 | Q2'11 | Change | |
| Revenue from external customer | 1,965 | 2,355 | -17% |
| Revenue | 361 | 187 | 93% |
| Gross profit | 555 | 673 | -18% |
| Operating profit | 251 | 394 | -36% |
| Profit after income tax | 287 | 386 | -26% |
In USD million
January to September
| J-S'11 | J-S'10 | Change | |
| Revenue from external customer | 6,157 | 4,869 | 26% |
| Revenue | 654 | 270 | 142% |
| Gross profit | 1,730 | 1,696 | 2% |
| Operating profit | 918 | 1,082 | -15% |
| Profit after income tax | 953 | 1,105 | -14% |
In USD million
The Group’s financial performance is largely defined by the performance of the Steel segment which comprises Novolipetsk (Lipetsk site), VIZ Stal (a producer of electrical steel), DanSteel (a thick plates producer), NLMK Indiana (steel and flats producer), trading companies Novexco Limited, Cyprus and Novex Trading SA, Switzerland, Altai-Koks (Russia largest non-integrated coke manufacturer previously formed a separate segment) as well as a number of service companies. In the 9M 2011 reporting, NLMK Indiana and NLMK DanSteel previously part of the Steel segment were included into the Foreign Rolled Products segment.
The Steel segment companies (NLMK and Altai-Koks) produced 1.7 million tonnes of coke (moisture: 6%) in Q3 up by 3%QoQ and 4.9 million tonnes in 9M up by 10%YoY. During Q3 2011, the Steel segment companies produced 2.4 million tonnes of steel (+2%QOq), 0.9 million tonnes of commercial slabs (-11%) and 1.3 million tonnes of flat products (+9%). 9M output totaled 7.1 million tonnes of steel (+2%YoY), 2.9 million tonnes of commercial slabs and 3.6 million tonnes of flats (+2%).
9M 2011 revenue from external customers amounted to USD 6,157 million, +26%YoY. This 2.4 times growth in revenue from external customers is associated with the delivery of semi finished products to the recently acquired international rolling assets that form a separate segment.
Operating profit amounted to USD 918 million (-15%YoY), the decrease being attributable to a significant rise in prices for raw materials and energy, as well as in other production expenses within the segment.
The quarterly analysis is based on the Segment’s Q3 performance and the Q2 pro-forma results, including the Coke-chemical segment and excluding NLMK Indiana and NLMK DanSteel that have been made part of the Foreign Rolled Products segment starting from July 1, 2011. In Q3 revenue from external customers dropped 17% to 1,965 million, mainly due to lower sales prices for the segment’s products. Higher in-house sales of semi finished products following the consolidation of Steel Invest and Finance rolling assets served as an additional factor in the reduction of external revenues. As a result, revenue from intersegmental operations grew 93% to USD 361 million.
Weaker market conditions, higher prices for raw materials and the changes in the USD rate lead to the segment’s lower profits.
