Russian economy collapse as profits plummet 42% at country's biggest steel firm

Russia's largest steel producer has recorded a downturn (Image: Getty)

Vladimir Putin is faced with a fresh economic nightmare as Russia's largest steel firm has recorded a drop in output after suffering a more than 40% fall in profit. NLMK Group's production decreased by 2.1%, to 14.3million tons, excluding long products. The data detailed that the group's sales of metal products amounted to 15million tons - 1.6% lower than the 2023 level. The downturn is blamed on a decline in orders from constructors and energy producers, Russian news service Interfax reports.

A report read: "In 2024, the issuer's operating indicators demonstrated a downward trend amid a reduction in demand from end consumers in the steel market, in particular from the construction and energy industries. "The decline in indicators reflects general trends in the development of the metallurgical sector and related industries." Despite these figures, NLMK's revenue for 2024 increased by 5% to £9.1billion, but net profit fell by 42% to £1.1billion.

Vladimir Lisin is the majority shareholder of Novolipetsk (NLMK) (Image: Getty)

Russia's Lipetsk Oblast came under a "massive raid" by Ukrainian drones, thought to have been targeted at NLMK's steel mill, on the night of February 13, according to regional governor Igor Artamonov said.

The site is located around 400 kilometres from the Ukrainian border, and accounts for 80% of the company's production.

The Kyiv Independent reports that the mill is a key asset of Russian billionaire Vladimir Lisin, who was listed as the third richest from the country in Forbes' 2023 ranking.

An investigation by Ukrainian news outlet Ukrainska Pravda revealed earlier this year that Lisin remains unsanctioned by the EU, even though his enterprises are thought to contribute directly to both European and Russian markets.

Two steel plants in La Louvière and Clabecq in Belgium are operated by NLMK, EU Today reports.

These alone imported Russian-produced semi-finished steel slabs worth €1.3billion (just over £1billion) in 2024, according to Eurostat.