Russia's NLMK says second quarter core earnings up 31 percent

(Adds comments on capex and dividends)

MOSCOW, July 27 (Reuters) - Russia's biggest steelmaker NLMK said on Thursday its second-quarter core earnings increased 31 percent year-on-year, supported by higher prices but falling short of market expectations.

NLMK, controlled by Russian billionaire Vladimir Lisin, said its earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $603 million in the April-June quarter, up from $460 million in the same period last year.

Russian steelmakers such as NLMK and its closest rival, Evraz (LSE: EVR.L - news) , struggled over the past two years as world steel prices plumbed 11-year lows and Russia's economic crisis sapped domestic demand.

But their prospects have improved this year due to higher metals prices and a nascent recovery in the Russian economy. NLMK's core earnings more than doubled in the first quarter.

Revenue totalled $2.5 billion, up 36 percent year-on-year, while net profit jumped 84 percent to $342 million, partially supported by the stronger rouble exchange rate, the company said.

"Results are slightly lower versus expectations, but we believe that current market focus should be on (the third quarter), which should improve due to lower raw material prices and rising steel," BCS analysts said in a note.

CEO Oleg Bagrin said the company expected to make larger dividend payments on the back of its second-quarter earnings.

"The board will decide on dividends very shortly, and you will probably see ... a somewhat higher dividend payout compared to our policy targets," he told a conference call with analysts.

NLMK reported earlier this month a 3 percent fall in second-quarter output from a year earlier to 4.14 million tonnes because of planned maintenance.

The company said on Thursday its capital expenditure (capex) for 2017 would total between $550-$600 million, revised down from a previously forecast $700 million due to the weaker rouble. (Reporting by Jack Stubbs; Editing by Dale Hudson and Elaine Hardcastle)