4 September 2007

H1 2007 NLMK Group Consolidated Financial Results under US GAAP

OJSC Novolipetsk Steel (NLMK), the LSE listed leading Russian steel producer, today announces its consolidated results for the first half of 2007.


Strong H1 2007 financial results

- Sales revenues amounted to USD 3,609.1 million (+42% YoY)

- Cash flows from operating activities were USD 1,366.9 million (2.6 times YoY)

- EBITDA* amounted to USD 1,570.6 million (+59% YoY); EBITDA margin 44%

- Cash and cash equivalents USD 1,348.6 million as at 30 June, 2007

Recent Developments:

- Continued progress in implementing the Group’s internal restructuring plan to divest assets classified as non-core asset according to a decision of NLMK’s Board of Directors:

§ Disposal of stakes in energy assets for USD 78.7 million in February 2007. Proceeds from the transaction were directed to the modernization and development of in-house energy facilities.

§ Disposal of the Company’s 50% stake in OJSC Lipetskcombank for USD 47.7 million.

- Prokopievskugol Group of Coal Companies was sold to a Municipal State Company representing the City Administration of Prokopievsk for USD1 in April 2007.

- Total capex in H1 2007 reached USD 395.4 million. In Q2 2007 the major projects under way within the Phase 2 of the Technical Upgrading Programme were as follows:

§ Contract signed with Siemens VAI (Germany) to supply two new ladle furnaces, each with 160 tonnes capacity, for BOF production at the Company's main site in Lipetsk. The contract is valued at around EUR23 million. The new ladle furnaces will substantially expand NLMK’s product mix enabling the Company to better supply the automotive industry, white goods producers and the electrical engineering industry.

§ Upgrading the reversing cold rolling mill for production of electrical grain-oriented steel at the main production site in Lipetsk. This will raise its capacity and enable an increase in the production of high value-added grades of grain-oriented steel with advanced magnetic properties.

§ NLMK signed an equipment supply agreement with Andritz AG (Austria) to supply two new grain- and non-grain-oriented steel rolling mills, each with an annual capacity of 110,000 tonnes and one hot-dip-galvanizing line of 300,000 tonnes capacity.

- At the Annual General Meeting hel


Maria Simonova

Press Secretary

+7 (915) 322-62-25

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