* Evraz 2010 net profit $532 mln, Reuters forecast $149 mln
* EBITDA $2.35 bln, Reuters forecast $2.40 bln
* Sees Russian demand for construction steel rising
* Shares up 1.3 percent in London
By Alfred Kueppers
MOSCOW, March 31 (Reuters) - Evraz, Russia's second largest steelmaker, expects domestic demand for construction steel to rise more than 10 percent this year while the global economic recovery helps lift its foreign operations.
The optimistic outlook followed smaller peer NLMK's forecast for a 10 percent increase in output this year as the domestic market recovers.
Evraz, part-owned by billionaire Roman Abramovich, said it sees first quarter core profit between $725 million and $800 million, putting it on target to meet previously announced guidance for 2011 underlying earnings of between $3.0 billion and $3.6 billion.
"Provided strong guidance for the first quarter, and if we see continued strong results in Q2, for example $1 billion, then the upper range of their earlier forecast...looks quite realistic," Renaissance Capital analyst Boris Krasnojenov said.
Steel makers in Russia, the world's third-largest producer, are benefiting from their position as leading low cost producers after suffering through a difficult 2009 when global steel demand declined.
"We expect Russian demand for construction steel to grow by more than 10 percent in 2011 compared with 2010," chief financial officer Giacomo Baizini said in a statement on Thursday.
"We are also experiencing improved demand from our international markets as the global economy continues to recover."
Evraz is one of the sector's few global players, with significant operations in South Africa, the United States and the European Union, though it produces the majority of its steel at home.
It also reported forecast-beating 2010 results on Thursday, swinging to a $532 million net profit last year from an adjusted $292 million loss in 2009 thanks to stronger steel prices and increased output.
The figure smashed the $149 million Reuters forecast, but was largely the result of an accounting change.
"They changed the method of how they measure depreciation on PP&E (plant, property and equipment) and that added $600-$700 million to the operating profit line," Krasnojenov said.
Evraz's London-listed GDRs were up $0.41 or 1.0 percent at $39.7 at 1139 GMT.
The company also said earnings before interest, taxation, depreciation and amortisation (EBITDA) reached $2.35 billion last year, up 90 percent on 2009.
Last year's revenues reached $13.4 billion, up 37 percent and ahead of the $12.89 billion forecast.
The shares are trading near the top of their 52-week range of $21.59-$43.15, but Krasnojenov said further gains are possible.
Evraz said last month it is "considering options" with regard to its 40 percent stake in Raspadskaya, which was Russia's largest coking coal miner until a May, 2010 accident crippled production at its main mine.
The RenCap analyst said a sale could result in a extraordinary dividend payment.
"If they sell Raspadskaya, they can use the proceeds for an extra payout, and the market would like this," Krasnojenov said.
Chief executive Alexander Frolov said in an interview shareholders could receive an ordinary dividend for the first half of 2011.
He did not provide any new details on Raspadskaya. (Reporting by John Bowker and Alfred Kueppers, Editing by Maria Kiselyova and David Cowell)