Russia's NLMK sees flat Q1 after Q4 earnings fall

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MOSCOW, March 27 (Reuters) - Russian steelmaker NLMK expects profitability to be flat in the first quarter compared with the fourth quarter of 2014, when its earnings were hit by lower steel prices and an impairment charge related to the weaker rouble.

NLMK has received a boost to exports from the lower rouble, which has fallen about 40 percent against the dollar since mid-2014 due to weaker oil prices and Western sanctions over Moscow's role in the Ukraine crisis.

"We expect an increase in the share of export sales in the first quarter of 2015 on the back of the seasonal slowdown in demand in the domestic market," the company said in a statement, adding its operational performance would remain stable.

However, the company's net profit was hit in the fourth quarter by a $356 million non-cash impairment on financial instruments related to the weaker rouble.

NLMK, controlled by businessman Vladimir Lisin, said its fourth-quarter net profit fell 17 percent, quarter-on-quarter, to $232 million.

Its earnings before interest, taxation, depreciation and amortisation (EBITDA) were down 9 percent, quarter-on-quarter, but up 53 percent year-on-year to $627 million, just ahead of analysts' average estimate of $625 million in a Reuters poll.

Revenue was down 10 percent, quarter-on-quarter, to $2.3 billion on the back of lower steel prices, while the cash cost of slab, the semi-finished steel product which NLMK exports, fell 24 percent to $225 per tonne at its core Lipetsk assets.

Shares (Berlin: DI6.BE - news) in NLMK were up 1 percent in Moscow, outperforming a 0.5 percent rise in the broader market index. (Reporting by Svetlana Burmistrova and Polina Devitt; Editing by Lidia Kelly and Mark Potter)