EVRAZ PLC

Earnings Release • Apr 20, 2015

National Storage Mechanism | Additional information

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RNS Number : 6840K

Evraz Plc

20 April 2015

This announcement replaces the RNS announcement number 6680K released at 07:00 today, 20 April 2015.

The figures in the table "Average selling prices, Q1 2015" in the STEEL - Russia section should read as follows:

Average selling prices

USD/tonne (ex works)	Q1 2015
Coke	85
Pig iron	206
Steel products
Semi-finished products	303
Construction products	418
Railway products	512
Other steel products	421

The figures in the last line of the table COAL - Coking coal should read as follows:

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Coking coal concentrate (production)	3,407	3,770	-9.6%	3,285	3.7%

The figures in the table "Average selling prices, Q1 2015", COAL - Coking coal should read as follows:

Average selling prices

USD/tonne (ex works)	Q1 2015
Raw coking coal	31
Coking coal concentrate	56

EVRAZ Q1 2015 PRODUCTION REPORT

20 April 2015 - EVRAZ plc (LSE: EVR) today releases its operational results for the first quarter of 2015.

Q1 2015 vs Q4 2014 OPERATIONAL HIGHLIGHTS:

·    Consolidated crude steel output was stable at 3.9 million tonnes per quarter with Russian steel mills running at full capacity

·    Production of steel products, net of re-rolled volumes, was unchanged at 3.7 million:

o  5% higher production of semi-finished products for export supported by EVRAZ's low cost position and devaluation of the Russian rouble and Ukrainian hryvnia, and a 7% growth in production of railway products in Russia and North America due to increased orders from EVRAZ's key customers

o  the decline in production volumes for other steel products caused by the lower demand and increased competition for construction products in Russia and for flat-rolled products in North America

·    The share of finished steel products within consolidated volumes went down to 61% in Q1 2015 from 63% in Q4 2014 due to increasing output of semi-finished products for exports primarily as a result of a weaker demand for construction products in the Russian market

·    Consolidated raw coking coal output and production of coking coal concentrate decreased by 9% and 10% respectively due to lower output of the Raspadskaya coal company primarily as a result of a planned longwall move at one of its mines

STEEL

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014***	Q1 2015/ Q1 2014, change
Coke (saleable)	285	304	-6.2%	255	11.5%
Pig iron	3,131	3,143	-0.4%	2,991	4.7%
Pig iron (saleable)	71	133	-47.0%	77	-8.4%
Crude steel	3,917	3,864	1.4%	3,875	1.1%
Steel products, gross	3,814	3,859	-1.1%	3,781	0.9%
Steel products, net of re-rolled volumes	3,659	3,665	-0.2%	3,366	8.7%
Semi-finished products **	1,440	1,370	5.1%	867	66.1%
Finished products	2,219	2,295	-3.3%	2,499	-11.2%
Construction products	1,183	1,252	-5.5%	1,217	-2.8%
Railway products	401	376	6.6%	508	-21.0%
Flat-rolled products	209	234	-10.6%	344	-39.3%
Tubular products	264	277	-4.4%	271	-2.5%
Other steel products	162	156	3.6%	159	1.8%

Note. Numbers in this table and the tables below may not add to totals due to rounding.

*     Gross volume of steel products in the tables includes those re-rolled at other EVRAZ's mills. However, such volumes are eliminated as intercompany sales for purposes of EVRAZ's consolidated operating results.

**   Consolidated production volumes of semi-finished products are preliminary as intra-group re-rolling volumes are yet to be finalised.

*** Includes production volumes of EVRAZ Vitkovice Steel disposed of in April 2014.

RUSSIA

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Coke (saleable)	76	111	-30.9%	111	-30.8%
Pig iron	2,744	2,729	0.5%	2,591	5.9%
Pig iron (saleable)	49	87	-43.9%	74	-34.6%
Crude steel	3,055	2,979	2.6%	2,852	7.1%
Steel products, gross	2,868	2,891	-0.8%	2,649	8.2%
Steel products, net of re-rolled volumes	2,802	2,815	-0.5%	2,582	8.5%
Semi-finished products	1,421	1,406	1.1%	1,086	30.9%
Finished products	1,381	1,409	-2.0%	1,497	-7.7%
Construction products*	981	1,033	-5.0%	993	-1.2%
Railway products	258	237	8.5%	376	-31.5%
Other steel products	142	139	1.7%	127	11.4%

* Includes 73kt and 65kt produced in Q1 2015 and Q4 2014 respectively by EVRAZ Caspian Steel mill in Kazakhstan from EVRAZ ZSMK's billets

In Q1 2015 Russian steel mills were 100% utilised with crude steel output growing by 3% QoQ. Production of steel products remained largely unchanged compared to Q4 2014. In the past two quarters the volumes were distributed equally between semi-finished and finished goods reflecting both the seasonality (demand and number of working days in the quarter) and demand contraction in Russia. Production of construction products was most affected having gone down by 5% QoQ.

Production of railway products, including rails, surged by 9% due to higher consumption by Russian Railways for track maintenance purposes as well as increased export volumes for Latin American and Middle East markets.

In Q1 2015, Russian steel producers, EVRAZ included, raised domestic prices for steel products in roubles partially eliminating the dispropotion caused by steep Russian rouble devaluation versus the US dollar in Q4 2014. As a result, prices went up by 5-7% in US dollar terms QoQ.

In Q2 2015, steel production is expected to decrease compared to Q1 2015 as a result of total 24-day scheduled maintenance works at the EVRAZ NTMK's blast furnaces.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Coke	85	92	128
Pig iron	206	261	305
Steel products
Semi-finished products	303	392	406
Construction products	418	484	569
Railway products	512	613	775
Other steel products	421	517	594

NORTH AMERICA

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Crude steel	480	509	-5.6%	491	-2.1%
Steel products, net of re-rolled volumes	627	647	-3.1%	639	-1.8%
Construction products	76	71	5.9%	85	-11.3%
Railway products	143	139	3.2%	132	8.9%
Flat-rolled products	144	160	-10.3%	151	-4.4%
Tubular products	264	277	-4.4%	271	-2.5%

* Q1 2015 production volumes are preliminary

In Q1 2015, crude steel production declined by 6% compared to Q4 2014 due to the 6-day outage of the steel shop at EVRAZ Regina. The reduction in demand for oil country tubular goods (OCTG) in Canada was the main cause for the decrease in production of steel products and of tubular goods, primarily of OCTG, by 3% and 4% respectively.

Flat-rolled products output, in particular commodity plate produced at EVRAZ Portland, decreased as a result of distributors reducing their substantial inventory over-hang of imported plate.

Rail production improved by 3% QoQ supported by strong demand from Class 1 railroads.

Prices for most steel products decreased from previous quarter due to reductions in scrap prices and to the effect of distributor de-stocking in plate and OCTG products.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Construction products	707	771	795
Flat-rolled products	938	936	919
Tubular products	1,285	1,339	1,290

UKRAINE

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Coke (saleable)	208	193	8.0%	145	43.7%
Pig iron	236	246	-4.0%	248	-4.8%
Pig iron (saleable)	22	47	-52.7%	3	693.4%
Crude steel	233	217	7.5%	253	-7.9%
Steel products	196	189	3.7%	214	-8.4%
Semi-finished products	104	80	29.4%	121	-13.9%
Finished products	92	109	-15.2%	94	-1.3%
Construction products	79	97	-18.5%	74	7.1%
Other steel products	14	12	11.2%	20	-32.2%

In Q1 2015, EVRAZ DMZ steel mill extended crude steel output by 8% compared to Q4 2014 when it had been impacted by reduced electricity supply in the country.

Production of steel products rose by 4% QoQ on the back of a 30% increase of semi-finished products for export. Deterioration of the economic environment in Ukraine and softening demand in the Russian market resulted in a decline in production of finished, mostly construction, products.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Coke (saleable)	191	190	179
Pig iron	237	308	351
Steel products
Semi-finished products	350	402	449
Construction products	415	512	583
Other steel products	528	758	894

SOUTH AFRICA

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Pig iron	151	168	-10.4%	152	-1.1%
Crude steel	149	160	-6.9%	150	-0.3%
Steel products	123	131	-6.4%	149	-17.6%
Semi-finished products	4	2	93.5%	9	-50.2%
Finished products	119	129	-8.1%	141	-15.6%
Construction products	47	51	-8.1%	43	8.8%
Flat-rolled products	65	73	-11.1%	90	-27.9%
Other steel products	6	5	42.2%	7	-7.8%

In March 2015, the situation in the local market became difficult compared to Q4 2014 and the first two months of 2015, nullifying the positive effect of the turnaround plan which EVRAZ Highveld's management team had been implementing.

In view of the deteriorating business environment, the Board of Directors of EVRAZ Highveld decided to file for voluntary business rescue procedures. Starting 14 April 2015 EVRAZ Highveld has been managed by an independent rescue practitioner.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Semi-finished products	443	415	440
Construction products	689	693	642
Flat-rolled products	588	602	606
Other steel products	542	485	574

IRON ORE

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Sinter (Russia)	2,837	2,673	6.2%	2,788	1.8%
Pellets (Russia)	1,631	1,660	-1.8%	1,572	3.7%
Lumpy ore (Ukraine)	667	735	-9.2%	736	-9.3%
Fines ore (South Africa)	151	196	-23.3%	139	8.0%
Lumpy ore (South Africa)	274	411	-33.4%	293	-6.6%

In Q1 2015, production of iron ore products (sinter plus pellets) in Russia stabilised growing by 3% QoQ after completion of maintenance works at one of EVRAZ ZSMK's sintering machines in November 2014. The slight decline (-2%) in production of pellets by EVRAZ KGOK is attributable to fewer working days in the quarter. The share of EVRAZ's own concentrate in production of sinter and pellets in Russia remained unchanged at 79%.

In Ukraine, higher demand for better quality product (Fe 60%) requiring additional beneficiation of lumpy ore with Fe 56% content resulted in a 9% decrease in production compared to Q4 2014.

The fall in production of iron ore at EVRAZ Highveld's Mapochs mine in South Africa was a result of high inventory volumes due to sagging consumption by EVRAZ Highveld and external customers.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Sinter (Russia)	37	34	74
Pellets (Russia)	45	45	88
Lumpy ore (Ukraine)	32	36	66
Fines ore (South Africa)	24	39	13

COAL

Product, '000 tonnes	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Raw coking coal (mined)	5,467	5,972	-8.5%	4,724	15.7%
Yuzhkuzbassugol	2,626	2,585	1.6%	2,867	-8.4%
Raspadskaya	2,802	3,337	-16.0%	1,857	50.9%
Mezhegeyugol	39	51	-23.5%	0	n/a
Coking coal concentrate (production)	3,407	3,770	-9.6%	3,285	3.7%

Coking coal

In Q1 2015, production of raw coking coal and coking coal concentrate by EVRAZ went down by 9% and 10% respectively compared to Q4 2014 due to a decline in production of raw coal by the Raspadskaya coal company. The Raspadskaya coal company's output decreased by 16% QoQ as a result of a planned longwall move at the Raspadskaya Koksovaya mine and unfavourable geological factors at its MUK-96 mine.

Average selling prices

USD/tonne (ex works)	Q1 2015	Q4 2014	Q1 2014
Raw coking coal	31	37	51
Coking coal concentrate	56	57	81

VANADIUM

Product, tonnes of V*	Q1 2015	Q4 2014	Q1 2015/ Q4 2014, change	Q1 2014	Q1 2015/ Q1 2014, change
Vanadium slag, gross production	5,917	6,048	-2.2%	4,989	18.6%
Vanadium in final products (saleable)	5,199	4,492	15.7%	4,891	6.3%

* Calculated in pure vanadium equivalent

In Q1 2015, Vanadium slag production was 2% down compared to Q4 2014 due to lower output in South Africa (-12%) as a result of reduced steel production at EVRAZ Highveld.

Production of final vanadium products increased by almost 16%, mainly driven by strong demand for ferrovanadium in Russia and good feedstock availability. Besides, higher Nitrovan® production was supported by improved shaft performance at EVRAZ Vametco in South Africa.

Production of oxides, vanadium aluminum and chemicals was flat QoQ.

Ferrovanadium price quotations decreased by 10.9% of LMB and 11.6% of Ryan's Notes in Q1 2015 compared to Q4 2014. EVRAZ`s average selling pricing followed this downward trend.

Average FeV indices

USD/tonne of V (ex works)	Q1 2015	Q4 2014	Q1 2014
Metal Bulletin Ferro-vanadium basis 78% min, free DDP, consumer plant, 1st grade Western Europe	21,850	24,516	25,463
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid	24,948	28,216	28,869

Notes:

Semi-finished productsinclude slabs, billets, pipe blanks and other semi-finished products.

Construction products include beams, channels, angles, rebars, wire rods, wire, and other construction products.

Railway products include rails, wheels, tyres and other railway products.

Flat-rolled productsinclude commodity plate, specialty plate and other flat products.

Tubular productsinclude large diameter line pipes, ERW pipes and casings, seamless pipes and other tubular products.

Other steel products include rounds, grinding balls, mine uprights, strips etc. For Ukraine they also include railway products, for South Africa - rails.

For further information:

Media Relations:

London: +44 207 832 8998                               Moscow: +7 495 937 6871

[email protected]

Investor Relations:

London: +44 207 832 8990                              Moscow: +7 495 232 1370

[email protected]

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, Kazakhstan, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top steel producers in the world based on crude steel production of 16.1 million tonnes in 2013. A significant portion of the company's internal consumption of iron ore and coking coal is covered by its mining operations. The company's consolidated revenues for the year ended 31 December 2014 were US$13,061 million, and consolidated EBITDA amounted to US$2,325 million.

This information is provided by RNS

The company news service from the London Stock Exchange

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