Severstal, Russia's largest steelmaker, posted a forecast-lagging second consecutive quarterly loss, hit by falling output, weak prices and big exchange rate losses as the industry's global slump persisted.
Severstal, majority-owned by billionaire Alexei Mordashov, said on Friday its first-quarter net loss was $644 million, much bigger than the $274 million loss forecast in a Reuters poll, and it said poor market visibility meant it could give no guidance for the rest of the year.
Steel makers in Russia, the world's fourth-largest steel producing nation, have suffered from a decline in orders from the construction and auto sectors as the global economic slowdown cuts demand. Analysts held out little hope of a near-term upturn in the company's fortunes.
"Steel prices should stabilise at weak levels in the second quarter across Severstal's key markets, which would result in another poor quarter," UralSib investment bank analysts said. "The recent rally in Severstal and other steel names was premature, and we would expect some profit-taking as the reality of weak demand and steel prices is reflected in poor earnings." Steel mills throughout Russia have cut production and laid off workers in response to declining orders.