UPDATE 1-Russian steelmaker Severstal slumps to fourth-quarter loss

Thu Feb 27, 2014 3:36am EST

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MOSCOW, Feb 27 (Reuters) - Severstal, Russia's second-biggest steel producer, tumbled to a fourth-quarter net loss after taking a $349 million asset impairment charge because of falling coking coal prices and foreign exchange losses of $83 million.

The pricing environment for steel-related commodities was challenging in 2013, Severstal said, pointing to the 20 percent drop in realised prices for coking coal.

"We forecast continuing supply growth for both iron ore and coking coal, which may result in slightly lower year-on-year bulks prices in 2014," it added.

However, global steel demand will continue to grow in 2014, driven by an expected bottoming-out of European demand and further improvements in the economy of the United States, the company said.

Severstal, controlled by billionaire Alexei Mordashov, posted a net loss of $74 million for the fourth quarter of 2013, against a $157 million profit in the third quarter. Revenue rose 6 percent quarter on quarter to $3.4 billion.

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) were up 12.5 percent quarter on quarter, at $611 million, beating a consensus forecast of $578 million in a Reuters poll of analysts. (Reporting by Svetlana Burmistrova; Writing by Polina Devitt; Editing by Katya Golubkova and David Goodman)

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