Russian Steel Maker Severstal H1 Up Over Siberian Mine Sales

Severstal, Russia's largest steel maker, posted on Thursday a 69% rise in first-half 2008 net profit to $1.94bn on higher steel production and prices, beating a forecast of $1.42bn.

Net profit was boosted by a $255m net gain from the sale of coal mines in Siberia to ArcelorMittal and a $219m uplift from the acquisition of the Sparrows Point steel mill in the US.

Severstal, majority owned by billionaire Alexei Mordashov, said in a statement revenues rose 36.3% to $10.55bn in the first six months of the year, slightly above the $10.42bn average forecast of eight analysts polled by Reuters.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 34.4% to $2.78bn, almost in line with the average forecast of $2.73bn in a poll of analysts.

Severstal forecast full-year EBITDA of between $5.8bn and $6.1bn.

"Our most important strategic initiative so far this year has been to enlarge the scope and scale of our North American operations, making them a significant part of the company's business," Mordashov, who is also Severstal's chief executive, said in the statement.

"With a favourable outlook for pricing, we are confident in our ability to deliver strong results for the full year 2008."