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Severstal - ao — Earnings Release 2013
Jan 23, 2014
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Earnings Release
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RNS Number : 3331Y
OAO Severstal
23 January 2014
Severstal reports Q4 2013 and FY 2013 operational results
Moscow, Russia - January 23, 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 Q4 2013 and FY 2013.
Q4 2013 GROUP HIGHLIGHTS
● Consolidated sales of steel products increased 2% q/q and steel products sales of Russian Steel Division increased 4% q/q driven by overall healthier market conditions
● Crude steel production decreased 7% to 3.8 mt (Q3 2013: 4.0 mt) due to planned maintenance of the #2 converter at the Cherepovets Steel Mill which was idled to install an exhaust hood (completed in December 2013)
● The share of high value-added (HVA) products in the sales portfolio remained strong at 49%
● The overall pricing environment was favorable for most of the company's products, notably iron ore pellets prices increased significantly by 16% q/q.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
| Production, tonnes | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % | |
| Crude steel (Total output): | 3 780 391 | 4 044 113 | (7) % | 15 691 491 | 15 140 185 | 4 % | |
| Russian Steel (RSD) | 2 508 594 | 2 797 670 | (10) % | 10 711 945 | 10 553 560 | 2 % | |
| Severstal North America (SNA) | 1 271 797 | 1 246 443 | 2 % | 4 979 545 | 4 586 626 | 9 % | |
| Hot metal (total output): | 2 681 536 | 2 712 035 | (1) % | 10 718 582 | 10 256 881 | 5 % | |
| Russian Steel | 2 182 400 | 2 251 251 | (3) % | 8 759 404 | 8 407 000 | 4 % | |
| North America | 499 136 | 460 784 | 8 % | 1 959 178 | 1 849 881 | 6 % | |
| Sales volumes, tonnes | Q4 2013 | Q3 2013 | Change, % 2013 | 2012 | Change, % | ||
| Coking coal concentrate | 1 721 259 | 1 825 021 | (6) % | 7 160 947 | 7 513 436 | (5) % | |
| Iron ore pellets | 2 805 851 | 2 511 275 | 12 % | 10 455 510 | 10 439 413 | 0 % | |
| Iron ore concentrate | 1 109 515 | 1 235 415 | (10) % | 4 617 835 | 4 759 702 | (3) % | |
| Total steel products (Consolidated) | 3 833 134 | 3 742 413 | 2 % | 15 140 258 | 14 605 102 | 4 % | |
| Total steel products (Russian Steel) | 2 674 258 | 2 581 162 | 4 % | 10 642 399 | 10 295 098 | 3 % | |
| Total steel products (SNA) | 1 172 137 | 1 198 915 | (2) % | 4 653 853 | 4 464 896 | 4 % | |
| Average price, $/tonne | Q4 2013 | Q3 2013 | Change, % 2013 | 2012 | Change, % | ||
| Coking coal concentrate, Vorkutaugol | 102 | 101 | 1 % | 108 | 135 | (20) % | |
| Iron ore pellets, Karelsky Okatysh | 108 | 93 | 16 % | 106 | 108 | (2) % | |
| Hot-rolled coil and plate (RSD) | 534 | 536 | 0 % | 550 | 613 | (10) % | |
| Rolled products (SNA) | 829 | 800 | 4 % | 806 | 843 | (4) % | |
SEVERSTAL RESOURCES
● Iron ore pellets sales volumes increased 12% driven by increased export sales and sales to external customers. Iron ore concentrate sales at Olkon decreased by 10% driven by seasonal factors
● Coking coal concentrate sales volumes at Vorkutaugol were down 6% from the high base of Q3 (when sales increased 11% q/q against Q2). Sales of low marginal raw coking coal at Vorkutaugol considerably decreased after the completion of the first stage of modernization at the Pechorskaya Preparation Plant. Sales of coking coal concentrate at PBS Coals continued to decelerate on the back of lower export volumes
● An improving market environment resulted in higher prices for most of the Division's products. Prices for iron ore products recorded the most significant increases with iron ore pellets prices up 16% and prices for iron ore concentrate up 22% q/q. Prices for coking coal concentrate at Vorkutaugol remained broadly flat at $102 per tonne (Q3 2013: $101 per tonne).
| Sales volumes, tonnes | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % |
| Coal: | 2 344 612 | 2 632 635 | (11) % | 10 079 291 | 10 479 136 | (4) % |
| Coking coal concentrate, including: | 1 721 259 | 1 825 021 | (6) % | 7 160 947 | 7 513 436 | (5) % |
| Vorkutaugol | 1 419 670 | 1 503 387 | (6) % | 5 610 362 | 5 267 442 | 7 % |
| PBS Coals | 301 590 | 321 633 | (6) % | 1 550 585 | 2 245 993 | (31) % |
| Raw coking coal, Vorkutaugol | 42 221 | 191 623 | (78) % | 558 349 | 622 318 | (10) % |
| Steam coal, including: | 581 132 | 615 992 | (6) % | 2 359 994 | 2 343 382 | 1 % |
| Vorkutaugol | 570 084 | 580 179 | (2) % | 2 239 348 | 2 191 132 | 2 % |
| PBS Coals | 11 048 | 35 813 | (69) % | 120 646 | 152 251 | (21) % |
| Iron ore: | 3 915 366 | 3 746 690 | 5 % | 15 073 345 | 15 199 116 | (1) % |
| Iron ore pellets | 2 805 851 | 2 511 275 | 12 % | 10 455 510 | 10 439 413 | 0 % |
| Iron ore concentrate | 1 109 515 | 1 235 415 | (10) % | 4 617 835 | 4 759 702 | (3) % |
| Sales price, $/tonne | Q4 2013 | Q3 2013 | Change, % 2013 | 2012 | Change, % | |
| Coking coal concentrate, Vorkutaugol | 102 | 101 | 1 % | 108 | 135 | (20) % |
| Coking coal concentrate, PBS Coals | 107 | 112 | (4) % | 112 | 141 | (21) % |
| Raw coking coal, Vorkutaugol | 54 | 54 | 0 % | 53 | 67 | (21) % |
| Steam coal, Vorkutaugol | 38 | 37 | 4 % | 38 | 38 | (1) % |
| Steam coal, PBS Coals | 72 | 49 | 46 % | 52 | 60 | (13) % |
| Iron ore pellets | 108 | 93 | 16 % | 106 | 108 | (2) % |
| Iron ore concentrate | 77 | 63 | 22 % | 74 | 78 | (5) % |
SEVERSTAL RUSSIAN STEEL
● Severstal Russian Steel (RSD) recorded steel products sales of 2.7 mt, 4% higher q/q driven by healthy demand from domestic customers and strong export sales. Sales of long products decreased by 10% due to lower production volumes (#2 converter at the Cherepovets Steel Mill was temporary idled as planned to install an exhaust hood to trap fugitive emissions from the unit and successfully re-started in December 2013)
● The product mix continued to remain strong with the share of HVA products in the sales portfolio at 49%. Sales of hot-rolled coils increased by 12% q/q while sales of semi-finished products and long products decreased by 22% and 10% respectively
● Sales of large diameter pipes increased considerably (62% q/q) driven by growth in Gazprom's purchases and finished repair works at the Izhora Pipe Mill in Q3
● Prices for steel products at RSD remained broadly flat: average prices for hot-rolled coils was flat q/q; prices for cold-rolled coils increased by 1% q/q; prices for color-coated coils and long products decreased by 4% and 5% respectively driven by seasonal factors.
| Sales volumes, tonnes | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % | |
| Total steel products | 2 674 258 | 2 581 162 | 4 % | 10 642 399 | 10 295 098 | 3 % | |
| Semi-finished products | 88 372 | 112 806 | (22) % | 533 030 | 932 423 | (43) % | |
| Rolled products: | 2 085 577 | 1 986 823 | 5 % | 8 188 647 | 7 576 215 | 8 % | |
| Hot-rolled coil | 1 047 495 | 939 287 | 12 % | 4 121 088 | 3 796 676 | 9 % | |
| Hot-rolled plate | 207 037 | 195 460 | 6 % | 772 469 | 684 867 | 13 % | |
| Cold-rolled coil | 344 109 | 327 673 | 5 % | 1 334 014 | 1 291 654 | 3 % | |
| Galvanised and metallic coated coil | 152 203 | 168 949 | (10) % | 609 159 | 603 903 | 1 % | |
| Color coated coil | 116 921 | 114 446 | 2 % | 447 827 | 367 821 | 22 % | |
| Long products | 217 813 | 241 007 | (10) % | 904 090 | 831 293 | 9 % | |
| Downstream products: | 500 309 | 481 532 | 4 % | 1 920 722 | 1 786 460 | 8 % | |
| Metalware products | 212 640 | 218 983 | (3) % | 855 932 | 828 723 | 3 % | |
| Large diameter pipes | 98 453 | 60 896 | 62 % | 324 868 | 321 393 | 1 % | |
| Other tubes, pipes, formed shapes | 189 217 | 201 653 | (6) % | 739 922 | 636 344 | 16 % | |
| Sales price, $/tonne | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % |
| Semi-finished products | 458 | 403 | 14 % | 445 | 527 | (16) % |
| Hot-rolled coil and plate | 534 | 536 | 0 % | 550 | 613 | (10) % |
| Cold-rolled coil | 589 | 583 | 1 % | 607 | 710 | (15) % |
| Galvanised and metallic coated coil | 792 | 800 | (1) % | 822 | 948 | (13) % |
| Color coated coil | 1 025 | 1 067 | (4) % | 1 060 | 1 165 | (9) % |
| Long products | 557 | 588 | (5) % | 589 | 669 | (12) % |
| Metalware products | 1 028 | 1 029 | 0 % | 1 065 | 1 170 | (9) % |
| Large diameter pipes | 1 756 | 1 393 | 26 % | 1 586 | 1 758 | (10) % |
| Other tubes, pipes, formed shapes | 670 | 666 | 1 % | 686 | 759 | (10) % |
SEVERSTAL NORTH AMERICA
● Severstal International increased q/q crude steel production by 2% to 1.3 mt
● Sales of rolled products decreased slightly (by 2%) after three consecutive quarters of growth: hot-rolled and cold-rolled coils sales decreased by 5% and 1% respectively while sales of galvanized and metallic coated steel products increased by 2% q/q
● The share of HVA products in the sales portfolio increased from 46% to 48%
● The pricing environment in the US remained favorable with average prices for SNA's steel products increasing 4% q/q, with hot-rolled and cold-rolled products benefiting the most.
| Sales volumes, tonnes | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % |
| Rolled products: | 1 172 137 | 1 198 715 | (2) % | 4 653 532 | 4 464 137 | 4 % |
| Hot-rolled coil and plate | 608 160 | 642 729 | (5) % | 2 506 494 | 2 453 535 | 2 % |
| Cold-rolled coil | 146 937 | 148 730 | (1) % | 567 365 | 543 132 | 4 % |
| Galvanised and metallic coated coil | 417 040 | 407 256 | 2 % | 1 579 672 | 1 467 471 | 8 % |
| Sales price, $/tonne | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % |
| Rolled products | 829 | 800 | 4 % | 806 | 843 | (4) % |
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
| Sales volumes, tonnes | Q4 2013 | Q3 2013 | Change, % | 2013 | 2012 | Change, % |
| Coal: | 1 380 363 | 1 575 360 | (12) % | 6 331 302 | 7 039 015 | (10) % |
| Coking coal concentrate | 757 010 | 767 746 | (1) % | 3 412 958 | 4 073 382 | (16) % |
| Raw coking coal | 42 221 | 191 623 | (78) % | 558 349 | 622 318 | (10) % |
| Steam coal | 581 132 | 615 992 | (6) % | 2 359 994 | 2 343 315 | 1 % |
| Iron ore: | 1 823 355 | 1 417 502 | 29 % | 6 251 935 | 6 190 371 | 1 % |
| Iron ore pellets | 1 721 655 | 1 251 857 | 38 % | 5 942 087 | 6 190 371 | (4) % |
| Iron ore concentrate | 101 700 | 165 645 | (39) % | 309 848 | 0 | - |
| Semi-finished products | 88 372 | 82 665 | 7 % | 412 407 | 852 973 | (52) % |
| Rolled products: | 3 244 921 | 3 181 432 | 2 % | 12 813 567 | 11 971 142 | 7 % |
| Hot-rolled coil | 1 646 478 | 1 581 838 | 4 % | 6 614 927 | 6 194 215 | 7 % |
| Hot-rolled plate | 206 983 | 195 357 | 6% | 772 022 | 684 466 | 13% |
| Cold-rolled coil | 491 045 | 476 394 | 3 % | 1 901 369 | 1 834 786 | 4 % |
| Galvanised and metallic coated coil | 569 241 | 576 205 | (1) % | 2 188 829 | 2 071 374 | 6 % |
| Color coated coil | 116 921 | 114 446 | 2 % | 447 827 | 367 821 | 22 % |
| Long products | 214 253 | 237 192 | (10) % | 888 593 | 818 480 | 9 % |
| Downstream products: | 499 841 | 478 317 | 5 % | 1 914 284 | 1 780 987 | 7 % |
| Metalware products | 212 329 | 218 225 | (3) % | 854 334 | 826 928 | 3 % |
| Large diameter pipes | 98 453 | 58 513 | 68 % | 320 530 | 318 052 | 1 % |
| Other tubes, pipes, formed shapes | 189 059 | 201 578 | (6) % | 739 420 | 636 007 | 16 % |
| 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 2013 reached 15.7 million tonnes. www.severstal.com
This information is provided by RNS
The company news service from the London Stock Exchange
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