PAO Severstal (SVST)
Severstal reports Q2 2021 financial and operational results
- EBITDA margin expanded to 56%; Delivering 42% EBITDA and 88% FCF growth qoq -
Moscow, Russia - 16 July 2021 - PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's leading steel and steel-related mining companies, increased its revenue by 33% qoq to $2,946 mln, EBITDA reached $1,647 mln (+42% qoq), EBITDA margin increased to 55.9% (+3.5 ppts qoq).
KEY CONSOLIDATED OPERATIONAL AND FINANCIAL RESULTS
Q2 2021 vs. Q1 2021 ANALYSIS:
6M 2021 vs. 6M 2020 ANALYSIS:
MARKET UPDATE AND OUTLOOK
Alexander Shevelev, CEO of Severstal Management, commented:
"The COVID-19 pandemic continues to challenge regions across the world, and Russia is no exception. The number of new cases has grown significantly in recent weeks. The health of our employees is Severstal's number one priority, and we have intensified all preventive measures. As an essential part of our efforts to reduce the risk of infection, we have started an information campaign encouraging our employees and contractors to get vaccinated. Today more than 50% of our staff already has immunity through vaccination or antibodies after infection and we aim to reach 80% by the end of the summer.
Another vital health and safety focus is workplace injury prevention. LTIFR for both our staff and contractors declined in Q2 2021 to 0.63. However, the LTIFR for our staff was unfortunately up 14% to 0.57 qoq and regrettably we had two fatalities in Q2 2021: one fatality among staff and one among contractors.
We also continue to improve our environmental strategy. Thus we set a medium-term goal to reduce the carbon intensity of CO2 emissions per tonne of steel by 10% by 2030. The medium-term target will be achieved through projects including the technical re-equipment of production facilities and the introduction of the best available technologies at all the Company's assets (press-release).
As for the macro-environment, Q2 2021 was remarkably strong. The continued global economic recovery supported steel and raw materials prices across all key regions. This led to a robust set of financial results in the reporting quarter. Revenue grew by 33% qoq to $2.9bn due to an increase in average prices coupled with a growth in sales volumes and an improved product mix, with the share of HVA products expanding by 3 ppts qoq to 49%. EBITDA rose by 42% to $1.6bn following a widening of revenue and price spreads.
Management's continuing efforts focused on cash generation resulted in a record FCF of $0.9bn (+88% qoq). Our net debt/EBITDA ratio decreased to 0.37, which helped us to recommend a dividend in line with our policy.
Severstal's strong performance in Q2 2021 has demonstrated the benefits of our business model and sales flexibility. Although we expect steel and commodity prices to soften later this year, the Board of Directors remains confident in our ability to deliver industry-leading margins and strong returns."
Severstal Russian Steel (RSD)
A conference call on Q2 2021 results for investors and analysts hosted by Alexey Kulichenko, Chief Financial Officer, will be held on 16 July 2021 at 12.00 (London)/ 14.00 (Moscow).
Call Conference ID: 8735792
+44 (0)330 336 9434 (local access)
0800 279 7209 (toll-free)
8 10 8002 8675011 (toll-free)
The call will be recorded and there will be a replay facility available for seven days as follows:
Replay pass code: 8735792
+44 (0)20 3859 5407 (local)
0 808 101 1153 (toll-free)
1. Consolidates sales by product
2. Russian Steel Division sales by product
3. Russian Steel Division sales by destination
4. Russian Steel Division average prices
5. Resource Division sales
6. Vorkutaugol operating highlights
7. Karelsky Okatysh ("KO") iron ore pellets production and sales volumes
8. Iron ore concentrate sales volumes
For further information, please contact:
Severstal Investor Relations
Vladimir Zaluzhsky, Nikita Klimantov
T: +7 (495) 926-77-66
Severstal Public Relations
T: +7 (495) 926-77-66
Severstal's financial communications agent - Hudson Sandler
Andrew Leach / Emily Dillon
T: +44 (0) 20 7796 4133
PАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, Latvia and Poland. Severstal is listed on MOEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $6,870 mln and EBITDA of $2,422 mln in 2020. Severstal's crude steel production in 2020 reached 11.3 mln tonnes. www.severstal.com
3.1. Additional regulated information required to be disclosed under the laws of a Member State
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