Severstal Distribution doubled its turnover last year, negotiations are underway with a potential buyer

In 2021, Aleksej Mordashov’s SIA “Severstal Distribution”, which is on the sanctions list, significantly increased both turnover and profit. In 2022, however, the inclusion of Mordašov in the sanctions lists significantly affected the functioning of both the company and the entire group; the sale is under negotiation.

In 2020 this engineering company had a turnover of 719.56 million. euro, but last year it managed to rise to 1.53 billion euro already, follows from “Lursoft“for the information provided by the customer portfolio.

SIA “Severstal Distribution” closed 2021 with 58.95 million. profit in euros after tax. The “Lursoft” information shows that 251 workers were employed in the company last year. In total, SIA “Severstal Distribution” paid 19.69 million in taxes in the state budget in 2021. Euro.

Last year, SIA “Severstal Distribution” successfully continued its work in the markets of North, West and East Europe. “In 2021, the consumption of steel products in European markets increased by 15%, reaching 148.9 million tonnes. In the second half of the year, the positive trend observed in steel consumption in the first half of 2021 continued, albeit at a considerably slower “, reads the management report of SIA Severstal Distribution, states that the impact of Covid-19 and changes in global logistics, as well as the increase in the prices of resources and raw materials, have created uncertainty in the economic outlook and industrial.

Despite the trade restrictions, SIA “Severstal Distribution” managed to maintain a strong position in the steel market in 2021. Last year, the company sold 1.85 million tonnes of steel products, which is 27% more than to 2020.

SIA “Severstal Distribution” continued to implement the commercial and market risk reduction policy by ensuring local and export deliveries, by entering into insurance contracts with one of the main international insurance agencies.

This year the situation has changed considerably. In the management report, SIA “Severstal Distribution” stated that the inclusion of its true beneficiary, Mordašov, in the sanctions lists had a significant impact on the functioning of both the company and the entire group. Due to the sanctions, all assets of SIA “Severstal Distribution” have been frozen since March 1st this year. “As soon as it became aware of the sanctions, the company did everything possible to stop all business processes as soon as possible, including the delivery of goods to customers”, says the management report of SIA “Severstal Distribution”.

LETA, referring to the management report, states that the company is in talks with a potential buyer of the company. The owners of “Severstal Distribution” have received a non-binding purchase offer from a potential buyer, a European company that is not subject to sanctions against Russia.

In the second quarter of this year, the prospective buyer initiated the in-depth research process, which is expected to end in the third quarter, and then agreed on the purchase price.