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Severstal - ao — Earnings Release 2013
Oct 17, 2013
6426_10-q_2013-10-17_3ee62268-8e34-4a64-b05e-ff4d238f7ada.html
Earnings Release
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RNS Number : 6982Q
OAO Severstal
17 October 2013
Severstal reports Q3 2013 and 9M 2013 operational results
Moscow, Russia - October 17, 2013 - OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q3 2013 and 9M 2013.
Q3 2013 GROUP HIGHLIGHTS
● Crude steel production was in line with the previous quarter at 4.0 mln tonnes (Q2 2013: 4.0 mln tonnes)
● Crude steel production at the Russian Steel Division increased by 2% q/q reaching 2.8 mln tonnes
● Consolidated sales of steel products decreased by 4% q/q against a backdrop of slightly weaker domestic and export markets
● The share of high value-added products in the sales portfolio increased by 1 bpts to 46%
● Steel assets ran at near to full capacity in Q3
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
| Production, tonnes | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % | |
| Crude steel (Total output): | 4 044 113 | 4 031 970 | 0 % | 11 911 100 | 11 555 972 | 3 % | |
| Russian Steel (RSD) | 2 797 670 | 2 747 533 | 2 % | 8 203 352 | 8 010 674 | 2 % | |
| Severstal North America (SNA) | 1 246 443 | 1 284 437 | (3) % | 3 707 748 | 3 545 298 | 5 % | |
| Hot metal (total output): | 2 712 035 | 2 693 714 | 1 % | 8 037 046 | 7 784 746 | 3 % | |
| Russian Steel | 2 251 251 | 2 183 345 | 3 % | 6 577 004 | 6 334 000 | 4 % | |
| North America | 460 784 | 510 369 | (10) % | 1 460 042 | 1 450 746 | 1 % | |
| Sales volumes, tonnes | Q3 2013 | Q2 2013 | Change, % 9M 2013 | 9M 2012 | Change, % | ||
| Coking coal concentrate | 1 825 021 | 1 787 747 | 2 % | 5 439 688 | 5 539 586 | (2) % | |
| Iron ore pellets | 2 511 275 | 2 678 099 | (6) % | 7 649 659 | 7 813 149 | (2) % | |
| Iron ore concentrate | 1 235 415 | 1 219 871 | 1 % | 3 508 320 | 3 618 132 | (3) % | |
| Total steel products (Consolidated) | 3 742 413 | 3 882 296 | (4) % | 11 307 124 | 11 334 381 | 0 % | |
| Total steel products (Russian Steel) | 2 581 162 | 2 749 078 | (6) % | 7 968 141 | 7 945 438 | 0 % | |
| Total steel products (SNA) | 1 198 915 | 1 170 085 | 2 % | 3 481 716 | 3 497 436 | 0 % | |
| Average price, $/tonne | Q3 2013 | Q2 2013 | Change, % 9M 2013 | 9M 2012 | Change, % | ||
| Coking coal concentrate, Vorkutaugol | 101 | 113 | (11) % | 110 | 142 | (22) % | |
| Iron ore pellets, Karelsky Okatysh | 93 | 112 | (17) % | 105 | 114 | (8) % | |
| Hot-rolled coil and plate (RSD) | 536 | 560 | (4) % | 555 | 622 | (11) % | |
| Rolled products (SNA) | 800 | 787 | 2 % | 798 | 851 | (6) % | |
SEVERSTAL RESOURCES
●Iron ore concentrate sales volumes increased 1% driven by increased sales volumes to external buyers at 166 thousand tonnes (Q2 2013: 43 thousand tonnes). Against exceptionally strong sales volumes in Q2, Karelskiy Okatysh recorded iron ore pellets sales volumes 6% lower q/q
● Coking coal concentrate sales volumes at Vorkutaugol increased by 11% driven by strong demand in Q3 and the impact of interruptions at the Vorkutinskaya and Vorgashorskaya mines in Q2. Steam coal sales at Vorkutaugol were up 23% driven by production volumes growth. Sales of coking coal concentrate at PBS Coals decreased 26% on the back of lower export volumes
● Prices for iron ore pellets, iron ore concentrate and coking coal concentrate at Vorkutaugol declined during summer 2013: prices for iron ore pellets at Karelskiy Okatysh decreased by 17%, prices for iron ore concentrate at Olkon decreased by 21% and prices for coking coal concentrate at Vorkutaugol were 11% lower q/q. However, prices for coking coal concentrate at PBS Coals were slightly up driven by increased domestic sales.
| Sales volumes, tonnes | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Coal: | 2 632 635 | 2 483 643 | 6 % | 7 734 678 | 7 635 293 | 1 % |
| Coking coal concentrate, including: | 1 825 021 | 1 787 747 | 2 % | 5 439 688 | 5 539 586 | (2) % |
| Vorkutaugol | 1 503 387 | 1 351 937 | 11 % | 4 190 693 | 3 800 419 | 10 % |
| PBS Coals | 321 633 | 435 810 | (26) % | 1 248 995 | 1 739 168 | (28) % |
| Raw coking coal, Vorkutaugol | 191 623 | 178 829 | 7 % | 516 128 | 475 849 | 8 % |
| Steam coal, including: | 615 992 | 517 067 | 19 % | 1 778 862 | 1 619 858 | 10 % |
| Vorkutaugol | 580 179 | 471 319 | 23 % | 1 669 264 | 1 555 091 | 7 % |
| PBS Coals | 35 813 | 45 749 | (22) % | 109 598 | 64 767 | 69 % |
| Iron ore: | 3 746 690 | 3 897 970 | (4) % | 11 157 979 | 11 431 281 | (2) % |
| Iron ore pellets | 2 511 275 | 2 678 099 | (6) % | 7 649 659 | 7 813 149 | (2) % |
| Iron ore concentrate | 1 235 415 | 1 219 871 | 1 % | 3 508 320 | 3 618 132 | (3) % |
| Sales price, $/tonne | Q3 2013 | Q2 2013 | Change, % 9M 2013 | 9M 2012 | Change, % | |
| Coking coal concentrate, Vorkutaugol | 101 | 113 | (11) % | 110 | 142 | (22) % |
| Coking coal concentrate, PBS Coals | 112 | 109 | 3 % | 113 | 143 | (21) % |
| Raw coking coal, Vorkutaugol | 54 | 53 | 2 % | 53 | 70 | (24) % |
| Steam coal, Vorkutaugol | 37 | 38 | (5) % | 38 | 38 | 0 % |
| Steam coal, PBS Coals | 49 | 46 | 7 % | 50 | 62 | (19) % |
| Iron ore pellets | 93 | 112 | (17) % | 105 | 114 | (8) % |
| Iron ore concentrate | 63 | 79 | (21) % | 74 | 83 | (11) % |
SEVERSTAL RUSSIAN STEEL
●Severstal Russian Steel (RSD) recorded steel products sales of 2.6 mln tonnes, 6% lower q/q due to weaker demand and lower selling prices; only galvanized, metallic coated coils, small diameter pipes and formed shapes saw strong demand from domestic customers and sales of those products increased by 8% q/q
● The product mix improved with the share of high value-added products in the sales portfolio increasing from 45% to 46% on a substantial decrease in sales of semi-finished products
● Sales of large diameter pipes declined by 27% q/q on lower production volumes largely due to scheduled repair works at the Izhora Pipe Mill
● Prices for all steel products at RSD decreased in Q3 by between 1% and 18% q/q (depending on the product) reflecting a weaker pricing environment both in the Russian and export markets in June and July 2013. Nevertheless, RSD was able to increase sales prices for key steel products on a number of occasions as Q3 progressed.
| Sales volumes, tonnes | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Total steel products | 2 581 162 | 2 749 078 | (6) % | 7 968 141 | 7 945 438 | 0 % |
| Semi-finished products | 112 806 | 148 172 | (24) % | 444 659 | 812 398 | (45) % |
| Rolled products: | 1 986 823 | 2 107 777 | (6) % | 6 103 069 | 5 775 656 | 6 % |
| Hot-rolled coil | 1 052 819 | 1 114 056 | (5) % | 3 316 869 | 3 108 019 | 7 % |
| Hot-rolled plate | 81 929 | 137 491 | (40) % | 322 155 | 346 719 | (7) % |
| Cold-rolled coil | 327 673 | 326 963 | 0 % | 989 905 | 976 903 | 1 % |
| Galvanised and metallic coated coil | 168 949 | 156 895 | 8 % | 456 956 | 454 112 | 1 % |
| Color coated coil | 114 446 | 118 606 | (4) % | 330 907 | 283 920 | 17 % |
| Long products | 241 007 | 253 767 | (5) % | 686 278 | 605 984 | 13 % |
| Downstream products: | 481 532 | 493 128 | (2) % | 1 420 413 | 1 357 384 | 5 % |
| Metalware products | 218 983 | 223 561 | (2) % | 643 292 | 641 160 | 0 % |
| Large diameter pipes | 60 896 | 82 942 | (27) % | 226 415 | 243 987 | (7) % |
| Other tubes, pipes, formed shapes | 201 653 | 186 626 | 8 % | 550 705 | 472 237 | 17 % |
| Sales price, $/tonne | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Semi-finished products | 403 | 490 | (18) % | 443 | 546 | (19) % |
| Hot-rolled coil and plate | 536 | 560 | (4) % | 555 | 622 | (11) % |
| Cold-rolled coil | 583 | 628 | (7) % | 613 | 724 | (15) % |
| Galvanised and metallic coated coil | 800 | 843 | (5) % | 832 | 966 | (14) % |
| Color coated coil | 1 067 | 1 100 | (3) % | 1 072 | 1 193 | (10) % |
| Long products | 588 | 595 | (1) % | 599 | 672 | (11) % |
| Metalware products | 1 029 | 1 075 | (4) % | 1 078 | 1 161 | (7) % |
| Large diameter pipes | 1 393 | 1 511 | (8) % | 1 512 | 1 733 | (13) % |
| Other tubes, pipes, formed shapes | 666 | 695 | (4) % | 691 | 765 | (10) % |
SEVERSTAL NORTH AMERICA
● Severstal International again increased q/q sales with rolled products sales of 1.2 mln tonnes in Q3 (Q2 2013: 1.17 mln tonnes)
● Steel-making facilities at SNA ran at approximately 96% of capacity in Q3 2013 and at 95% for the first 9 months of 2013
● The share of high value-added products in the sales portfolio increased to 46% (Q2 2013: 44%)
● Prices for steel products increased by 2% in Q3 against Q2 reflecting sustainable growth in the US economy and good prospects for the US steel market.
| Sales volumes, tonnes | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Rolled products: | 1 198 715 | 1 170 068 | 2 % | 3 481 395 | 3 496 873 | 0 % |
| Hot-rolled coil and plate | 642 729 | 656 574 | (2) % | 1 898 334 | 1 931 339 | (2) % |
| Cold-rolled coil | 148 730 | 130 374 | 14 % | 420 428 | 416 548 | 1 % |
| Galvanised and metallic coated coil | 407 256 | 383 121 | 6 % | 1 162 632 | 1 148 986 | 1 % |
| Sales price, $/tonne | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Rolled products | 800 | 787 | 2 % | 798 | 851 | (6) % |
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
| Sales volumes, tonnes | Q3 2013 | Q2 2013 | Change, % | 9M 2013 | 9M 2012 | Change, % |
| Coal: | 1 575 360 | 1 544 942 | 2 % | 4 950 939 | 5 124 967 | (3) % |
| Coking coal concentrate | 767 746 | 849 046 | (10) % | 2 655 949 | 3 029 260 | (12) % |
| Raw coking coal | 191 623 | 178 829 | 7 % | 516 128 | 475 849 | 8 % |
| Steam coal | 615 992 | 517 067 | 19 % | 1 778 862 | 1 619 858 | 10 % |
| Iron ore: | 1 417 502 | 1 598 359 | (11) % | 4 428 579 | 4 577 269 | (3) % |
| Iron ore pellets | 1 251 857 | 1 555 857 | (20) % | 4 220 432 | 4 57 7 269 | (8) % |
| Iron ore concentrate | 165 645 | 42 502 | n.a. | 208 147 | - | n.a. |
| Semi-finished products | 82 665 | 117 703 | (30) % | 324 035 | 773 618 | (58) % |
| Rolled products: | 3 181 432 | 3 273 262 | (3) % | 9 568 646 | 9 207 287 | 4 % |
| Hot-rolled coil | 1 695 564 | 1 770 340 | (4) % | 5 211 730 | 4 983 061 | 5 % |
| Hot-rolled plate | 81 630 | 137 392 | (41) % | 321 758 | 346 660 | (7) % |
| Cold-rolled coil | 476 394 | 457 336 | 4 % | 1 410 324 | 1 393 451 | 1 % |
| Galvanised and metallic coated coil | 576 205 | 540 015 | 7 % | 1 619 588 | 1 603 097 | 1 % |
| Color coated coil | 114 446 | 118 606 | (4) % | 330 907 | 283 920 | 17 % |
| Long products | 237 192 | 249 573 | (5) % | 674 340 | 597 098 | 13 % |
| Downstream products: | 478 317 | 491 331 | (3) % | 1 414 443 | 1 353 476 | 5 % |
| Metalware products | 218 225 | 223 347 | (2) % | 642 005 | 639 655 | 0 % |
| Large diameter pipes | 58 513 | 81 628 | (28) % | 222 077 | 241 883 | (8) % |
| Other tubes, pipes, formed shapes | 201 578 | 186 356 | 8 % | 550 360 | 471 938 | 17 % |
| Notes |
1) All production data is reported in metric tonnes;
2) Segmental data includes intercompany sales;
3) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;
4) Metalware sales volumes and metalware average selling prices include Severstal Metiz, Cherepovets Steel Mill, Severstallat and Severstal Invest data
5) Large diameter pipes include all pipes with a diameter in the range between 820 and 1420 mm.
| Contacts |
Investor Relations
Vladimir Zaluzhsky
T: +7 (495) 926-77-66 ext. 6375
Public Relations
Elena Kovaleva
T: +7 (495) 926-77-66 ext. 6447
Severstal's financial communications agent - Hudson Sandler
Andrew Hayes / Maria Ignatova / Alex Brennan
T: +44 (0) 20 7796 4133
***
ОАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, the USA, Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $14,104 million and EBITDA of $2,158 million in 2012. Severstal's crude steel production in 2012 reached 15.1 million tonnes. www.severstal.com
This information is provided by RNS
The company news service from the London Stock Exchange
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