Annual Report 2007 - Severstal

OAO Severstal and subsidiaries
Notes to the consolidated financial statements
for the year ended December 31, 2007
(Amounts expressed in thousands of US dollars, except as otherwise stated)
31. Segment information
Segmental income statements for the year ended December 31, 2007:
Russian Severstal Inter
Mining Steel Lucchini North Metalware Financing segment
segment segment segment America IPM segment segment transactions Consolidated
Sales
Sales – external 1,029,407 6,690,697 3,624,913 1,691,818 550,715 955,493 – – 14,543,043
Sales – to related parties 1,167,458 1,278,328 131,595 53 – 56,216 – (1,931,782) 701,868
2,196,865 7,969,025 3,756,508 1,691,871 550,715 1,011,709 – (1,931,782) 15,244,911
Cost of sales (1,497,487) (4,837,325) (3,194,377) (1,664,065) (379,824) (871,799) – 1,903,306 (10,541,571)
Gross profit 699,378 3,131,700 562,131 27,806 170,891 139,910 – (28,476) 4,703,340
General and
administrative expenses (149,755) (279,485) (188,016) (30,626) (9,509) (37,030) – 3,211 (691,210)
Distribution expenses (180,788) (542,904) (117,998) – (29,075) (44,341) – 5,596 (909,510)
Indirect taxes and contributions (64,964) (46,763) (32,188) – (4,440) (5,259) – – (153,614)
Share of associates’ (losses)/profits – (95,637) (548) 5,338 – 1,450 – – (89,397)
Net income from securities
operations 33 21,164 10,827 – – 22 – (6,482) 25,564
(Loss)/gain on disposal of
property, plant and equipment (12,219) (31,799) (508) (3,485) (53) 12,283 – 501 (35,280)
Net other operating
(expenses)/income (9,912) 8,815 (17,343) 2,556 (692) 8,857 – 199 (7,520)
Profit from operations 281,773 2,165,091 216,357 1,589 127,122 75,892 – (25,451) 2,842,373
Impairment of property,
plant and equipment (3,058) (5,451) (15,895) – – (4,705) – – (29,109)
Negative goodwill, net 11,599 – 507 – – 117 – – 12,223
Net other non-operating
(expenses)/income (20,608) (39,178) 24,374 – (18) (2,828) – (20,318) (58,576)
Profit before financing
and taxation 269,706 2,120,462 225,343 1,589 127,104 68,476 – (45,769) 2,766,911
Interest income 10,996 182,619 21,978 855 45 823 – (44,379) 172,937
Interest expense (70,339) (124,870) (72,793) (12,418) (27,601) (7,649) – 27,377 (288,293)
Foreign exchange difference (3,447) 10,544 (535) – (2,850) (1,096) – 284 2,900
Profit before income tax 206,916 2,188,755 173,993 (9,974) 96,698 60,554 – (62,487) 2,654,455
Income tax (expense)/benefit (45,684) (540,509) (64,808) 9,247 (20,080) (22,312) – 2,877 (681,269)
Profit from continuing
operations 161,232 1,648,246 109,185 (727) 76,618 38,242 – (59,610) 1,973,186
Profit/(loss) from
discontinued operations – – (15,660) – – – 16,093 – 433
Profit for the year 161,232 1,648,246 93,525 (727) 76,618 38,242 16,093 (59,610) 1,973,619
Additional information:
Depreciation expense 203,409 332,536 196,569 14,492 23,370 23,712 – – 794,088
Capital expenditures 394,047 494,780 199,267 483,342 23,335 29,965 – – 1,624,736
Intersegment sales
(incl. in sales to related parties) 1,142,654 647,880 131,595 – – 9,653 – (1,931,782) –
Severstal Annual Report 2007 105