Severstal 4Q09 IFRS results preview

Event: Severstal is slated to post its 4Q09 IFRS results on Tuesdasy, 9 March. We expect EBITDA of $1bn and a top line of $12.9bn. 

View: Severstal's 4Q09 operating update revealed a more than 10% increase in product prices and flat QoQ volumes. Our positive outlook is also strengthened by costs dynamics of the company's North America division, which showed more than 20% reduction in cash costs per ton in Q3 on the back of higher capacity utilization and production optimization implemented by new management.  

Valuation and Action: We recommend buying Severstal stock ahead of the forthcoming results.