Kremikovtzi steel mill narrowed its annual net loss to 35.9 million leva in 2007, compared to 280.79 million leva a year earlier, largely on the back of selling some of its assets, the company said in a filing, quoted by investor.bg.

A quarterly breakdown showed that despite incurring losses for the first three quarters of the year, the last one saw Kremikovtzi post a profit. In October-December 2007, the steel mill reported 30.98 million in net profit, compared to a net loss of 63.39 million leva in the same period of the previous year.

The steelworks' proceeds from assets sale totaled 104.654 million leva last year, compared to merely 4.33 million leva in 2006. In the fourth quarter of last year, Kremikovtzi generated 79.32 million leva in revenue from the sale of its assets, as opposed to 639 000 leva in the same period of the previous year.

Production revenues were up 9.83 per cent on the year to 989 million leva, but a report issued by Kremikovtzi bondholders on February 12 showed production decreased substantially in the latter months of 2007.

The fourth-quarter improvement, therefore, was not attributable to production gains but rather to the massive sale of assets. The steel mill's majority shareholder, Indian businessman Pramod Mittal, has reportedly explained to bondholders that production cuts were caused by the cash flow shortage, which made it difficult to purchase enough raw materials, and the frequent repairs of convertor lines.