Evraz - CMD: 2019-23 Capex Increased, But Flexible Approach Promised
Evraz hosted a capital markets day on Friday, where it reiterated its plans to carry out three large downstream projects. Capex guidance for 2020-22 was set at $1 bln per annum, around 9% above the previous target. That said, Evraz said that adhering to its leverage and dividend targets is a priority and promised a flexible approach to investments. At spot commodity prices and the current USD/RUB rate, we believe Evraz may need to cut its capex in 2020 to $0.7-0.8 bln to meet its leverage targets. This would ensure dividends $300-350 mln would be paid in 2020 (for a 4-5% yield).Evraz engages in the production and distribution of steel and related products and coal and iron ore mining. Co. also produces vanadium products. Co. has four segments: Steel, which includes production of steel and related products at all mills except for those in North America, and includes the extraction of vanadium ore and production of vanadium products, iron ore mining and enrichment and certain energy-generating companies; Steel, North America, which includes production of steel and related products in the U.S. and Canada; Coal, which includes coal mining and enrichment; and Other operations, which includes energy-generating companies, shipping and railway transportation companies.
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