Strong first quarter results

Financial Results for the three months ended 31 March, 2007
($ million unless otherwise stated)

Notes:
1  EBITDA represents profit from operations plus depreciation and amortisation, and gain (loss) on disposals of property plant and equipment
2 Net profit attributable to shareholders

JSC Severstal today reports first quarter results reflecting a significant improvement compared with the same period last year and a continuation of positive Q4 trends.

Q1 2007 Highlights:

• Strong year-on-year growth
  • Favourable prices across all geographies and markets
  • Increases in raw materials, energy and labour costs passed on to customers
  • 2006 investment programme yielding good returns
• A record $3,677 million in revenues, up 34.9% compared with Q1 2006
• Strong EBITDA growth at $921 million in Q1 2007, up 43% from $644 million in Q1 2006
  • Improved efficiency, better product mix and cost control added around $100m to EBITDA compared to Q1 2006
• Net profit up 82.5% to $396 million for Q1 2007 from $217 million in Q1 2006
  • Strong Russian domestic market for steel and iron ore products

• Steel prices in Russia and Europe demonstrating  sustainable growth
• Strong performance in the mining business: EBITDA up 50.0% year-on-year
• Significant improvement in Lucchini
• Q1 investment programme of $267 million in line with budget and forecast
• Continuation of the positive trends seen in Q4 2006

Alexei Mordashov, CEO of OAO Severstal, said, “I am pleased to report that Severstal has made a positive start to the new financial year with continued growth. We are building successfully on the changes we made last year to provide us with a strong platform for the future.”