From stable to positive went Moody’s evaluation of the outlook for Severstal. The Russian steelmaker also received the rating of Ba1 in the corporate family category. Moody’s Investors Service is also consider­ing a score increase in Severstal’s default rating, which is expected to go up to Ba1 -PD. Meanwhile, Sever­stal consistently delivers high perfor­mance, minimizes costs, and stays committed to reducing its net debt- to-EBITDA ratio by one half during the next 18 months.

Severstal is financially equipped to withstand global instability on the world market, according to Moody’s. Severstal has advantages over its European competitors because the corporation operates on the markets of Russia and the United States, where its products are in high demand. Low-risk leverage al­lows Severstal to sustain favorable momentum. Moody’s predicts that Severstal will maintain its solid liquid­ity profile. Maintaining consistent conservative dynamics in the pro­posed debt reduction and the man­agement of liquid assets with care will allow Severstal to score higher. Presently, the group aims at lowering the debt-to-EBITDA ratio sustainably to below 2.0, and at bringing the EBITDA margin into the mid-teens range. Contrary developments, such as increasing the debt-to-EBITDA ratio or pursing reckless liquidity management will negatively reflect on the score the company receives.

While U.S. prices on rolled steel decreased by three percent, going down to USD787 per ton, prices in Russia stayed the same or de­creased insignificantly. Alexey Mordashev, who is in charge of the Severstal, noted that the company continues to operate at full capacity in the U.S. and Russia.

According to Mr. Mordashev, unlike in 2012 when the company’s out­put decreased by 6.2 percent, in the current year, Severstal experienced slight growth in production.

Separately, the company’s RUR6.1 billion investment plans for the period from 2014 to 2016 are subject to a downward revision in line with a con­servative approach the company’s management has taken. Based on a Reuters survey, seasonal fluctua­tions in demand for steel and cok­ing coal reflected moderately on the company’s quarterly performance, coinciding – as they did – with a slight drop in overall prices across the market. The downward trends in pricing carried through 2013, im­pacting the company’s decision to reduce investments in the current year by approximately a quarter.