Severstal reports Q1 2019 operational results

 

Moscow, Russia - 12 April 2019 - PAO 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 Q1 2019.

Q1 2019 GROUP HIGHLIGHTS

• Hot metal output increased 6% q/q in Q1 2019 to 2.36 mln tonnes (Q4 2018: 2.23 mln tonnes) following short-term maintenance works at BF#2 in the previous quarter. Crude steel production grew to 3.04 mln tonnes (Q4 2018: 2.94 mln tonnes) reflecting an increase in pig iron production and production growth of EAF billets.

 

• Consolidated steel product sales increased 3% q/q to 2.83 mln tonnes in Q1 2019 (Q4 2018: 2.76 mln tonnes), following short-term maintenance works at rolling-mill facilities in the previous quarter and an increase in productivity of aggregates. The share of domestic sales rose to 65% due to their increased attractiveness of domestic sales (Q4 2018: 62%).

 

• The share of high value-added (HVA) products within the sales portfolio remained flat at 44% (Q4 2018: 44%), driven by a decline in sales of semi-finished products, which was offset by higher sales of galvanised, colour coated and hot rolled thick plate.

 

• Coking coal concentrate sales volumes from Vorkutaugol declined 1% due to long-wall repositionings at Vorgashorskaya, Zapolyarnaya and Komsomolskaya mines, but remained at historically high levels reflecting the high production rate.

 

• Iron ore pellet sales declined 4% to 2.83 mln tonnes (Q4 2018: 2.94 mln tonnes) as a result of lower production volumes in Q1 2019 and a stock sell-off in the previous quarter.

 

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

 

 

 

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

 

 

SEVERSTAL RESOURCES

• Coking coal concentrate sales volumes from Vorkutaugol declined 1% q/q due to long-wall repositionings at the Vorgashorskaya, Zapolyarnaya and Komsomolskaya mines, but remained at historically high levels as a result of high production rates. Internal coking coal concentrate remained almost flat q/q as the Company maintained high level of sales to third parties due to a favourable pricing environment in the local market.

 

• Steam coal sales at Vorkutaugol remained almost flat in Q1 2019 vs Q4 2018 but increased by 5% y/y, reflecting production growth.

 

• Iron ore pellet sales declined 4% to 2.83 mln tonnes (Q4 2018: 2.94 mln tonnes) as a result of lower production volumes and stock sell-off in Q4 2018.

 

• Iron ore concentrate sales decreased 9% to 1.30 mln tonnes (Q4 2018: 1.43 mln tonnes) due to seasonal factors and short-term maintenance works.

 

 

 

SEVERSTAL RUSSIAN STEEL ('RSD')

• RSD steel product sales increased 3% to 2.84 mln tonnes in Q1 2019 compared with the previous quarter (Q4 2018: 2.77 mln tonnes), following short-term maintenance works at rolling-mill facilities in the previous quarter and an increase in the productivity of aggregates. The share of domestic sales rose to 65% due to the increased attractiveness of domestic sales (Q4 2018: 62%).

 

• The share of high value-added (HVA) products within the sales portfolio remained flat at 44% (Q4 2018: 44%), driven by a decline in sales of semi-finished products and higher sales of galvanised, colour coated and hot rolled thick plate.

 

• Severstal increased production of colour-coated and galvanised products following the launch of new product lines, which reached their full utilisation rates in Q1 2019.

 

• LDP sales volumes declined 9% q/q due to specific factors with the product range at the Izhora Pipe Mill (IPM) where the utilisation rate continued to remained high in Q1 2019. In February 2019 IPM has won several tenders to supply PAO Gazprom with over 200,000 tonnes of large diameter pipes. The products will be used in the development of gas transmission capacities for the Unified Gas Supply System in the North-West Region (NEGP), as well as the construction of the Kovykta-Chayanda section of the Power of Siberia gas pipeline. Thick plate sales increased 11% q/q.

 

• Average selling prices for the majority of steel products declined in Q1 2019 in line with global benchmarks.

 

 

 

1) All production data is reported in thousands of tonnes;

2) Sales prices are stated on EXW basis;

3) Segmental data includes intercompany sales;

4) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;

5) Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.

 

 

Investor Relations

Evgeny Belov

T: +7 (495) 926-77-66 ext. 6445

 

Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66 ext. 6457

 

Severstal's financial communications agency - 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 RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $8,580 million and EBITDA of $3,142 million in 2018. Severstal's crude steel production in 2018 reached 12.0 million tonnes.