TIDMEVR TIDMEVRZ
RNS Number : 6745V
Evraz Plc
17 January 2012
EVRAZ Q4 2011 and FY 2011 OPERATIONAL RESULTS
17 January 2012 - EVRAZ plc (LSE: EVR) and Evraz Group S.A.
(LSE: EVRZ) (together referred to as "EVRAZ") today released its
operational results for the fourth quarter of 2011 and full year
2011.
FY 2011 HIGHLIGHTS:
-- Crude steel production grew by 3% compared to FY2010 mainly
due to an increase in volumes in the Czech Republic, resulting from
the resolution of a pricing dispute with a supplier of hot metal
while other major steelmaking assets continued to operate at full
capacity.
-- Steel product mix shifted further in favour of finished goods.
-- Coking coal production decreased by 16% due to several
longwall repositionings and temporary stoppages of some mines for
additional implementation of safety equipment and procedures.
-- Prices for steel products and coking coal improved compared to the previous year.
Q4 2011 HIGHLIGHTS:
-- Crude steel volumes increased by 3% quarter-on-quarter due to
completion of scheduled maintenance in Q3 on the back of full
utilisation of major steelmaking assets.
-- Share of semi-finished steel increased compared to Q3 due to
seasonally lower demand for finished steel in Russia.
-- Coking coal production gained momentum in Q4 2011 after most
of the issues negatively affecting performance of the first three
quarters of 2011 were resolved.
-- Prices for steel products and coking coal contracted compared
to Q3 reflecting negative seasonality and market volatility.
STEEL
In 2011, EVRAZ's overall production of crude steel increased by
3% against 2010 and quarter-on-quarter. The trend of redistribution
of available steel volumes towards higher value added finished
products has become even more evident as domestic markets for
EVRAZ's plants in Russia, Ukraine, North America and South Africa,
respectively, showed signs of recovery in 2011. The Q4 2011 pricing
was, as usual, affected by seasonal factors, as well as global
growth concerns.
Russia
Crude steel production volumes slightly increased in 2011
compared to 2010 and by 3% in Q4 2011 compared to Q3 due to
completion of scheduled maintenance. As the key steelmaking
facilities remained fully utilised and the demand for domestically
consumed finished products improved, the 2011 production of
semi-finished steel decreased by 10% vs. 2010 reflecting shift of
the mix towards high value-added finished products. Consequently,
the production volumes of construction and flat-rolled products
increased year-on-year by 10% and 13% respectively. In Q4 2011, the
output of semi-finished goods increased by 13% with production of
finished goods either remaining flat, as was the case with
construction products, or decreasing (-5% for flat-rolled
products), due to a seasonal shift in demand.
Railway products output decreased by 9% in Q4 2011 compared to
the previous quarter due to scheduled rail mill repair at EVRAZ
NTMK in October and the re-equipment of the rail mill's finishing
lines aimed at improving rail quality. This is part of a
large-scale rail production reconstruction project being carried
out at EVRAZ's Russian plants to satisfy pent-up demand from the
Russian Railways.
Ukraine
In 2011, EVRAZ DMZ steel mill reduced production of
semi-finished goods by 36% compared to 2010 as a result of improved
demand for finished goods. In Q4 2011, the output of semi-finished
steel rose by 35% over Q3, whilst the output of construction
products declined by 25%, due to seasonality.
North America
Crude steel production was flat year-on-year and decreased by 9%
in Q4 2011 compared to the previous quarter due to scheduled
maintenance of steel making facilities in Pueblo and Regina in
October. Annual rail production at EVRAZ Pueblo advanced 24% over
2010 reflecting increased demand for ongoing and upcoming projects
from US Class One railroads. Construction product output, mainly
rods and bars, decreased by 21% in 2011 compared to 2010 and by 9%
in Q4 2011 over Q3 as available crude steel volumes at EVRAZ Pueblo
were used to produce higher margin rails as well as seamless
pipe.
Flat-rolled production increased by 14% year-on-year due to
improved end-user demand for plate, and by 4% in Q4 2011 over Q3
following maintenance stoppages in Q3 at EVRAZ Portland and EVRAZ
Claymont. Production of tubular goods fell 6% in 2011 vs. 2010 and
18% in Q4 2011 vs. Q3, as a result of temporary idling of a Regina
spiral mill due to subdued demand for large diameter pipe (LDP).
Regina spiral mill resumed operations in January 2012 and EVRAZ is
currently participating in a number of tenders for LDP. Demand for
oil country tubular goods (OCTG) remains robust and is expected to
remain strong before the spring floods in Western Canada
Europe
The production of crude steel at EVRAZ Vitkovice Steel (EVS) in
2011 doubled compared to the previous year after settlement of the
2010 dispute with ArcelorMittal Ostrava (AMO) over hot metal
supplies to EVS. Increase in steel production in Q4 2011 is largely
explained by maintenance works in Q3.
South Africa
In Q4 2011, the production at EVRAZ Highveld Steel and Vanadium
improved over Q3, a quarter which had been negatively affected by
planned maintenance stoppages and the overhaul of steelmaking and
rolling production.
MINING
Iron Ore
Production of saleable iron ore products in Russia increased
year-on-year and was mainly attributable to more stable operations
and debottlenecking at Evrazruda and the launch of a
debottlenecking and expansion programme at EVRAZ KGOK. In Q4 2011
sinter production grew by 22% compared to the previous quarter's
smaller volumes as a result of the scheduled major repair of
sintering facilities at EVRAZ KGOK. Production of saleable
concentrate declined by 9% as more concentrate was used in sinter
production. Production of ore at the Mapochs mine in South Africa
decreased in Q4 2011 compared with Q3 because of a two-week
stoppage of the mine for safety improvements in October.
Coking Coal
In Q4 2011, raw coking coal production at Yuzhkuzbassugol
increased by 19% against Q3 following the resumption of operations
at the Abashevskaya mine on 23 October and at the Osinnikovskaya
mine on 20 December and the launch of production at the
Ulyanovskaya mine on 18 October. As a result, coking coal
concentrate production grew by 13% over the previous quarter.
Steam Coal
Raw steam coal production decreased by 33% in Q4 2011 from Q3
impacted by completion of the face mining and the commencement of
longwall repositioning at the Gramoteinskaya mine on 15 December.
Year-on-year production fell 23% mainly resulting from shutdown of
the Tagaryshskaya mine since the beginning of 2011. Two mines,
Gramoteinskaya and Kusheyakovskaya, will be undergoing longwall
repositioning till the end of March 2012, negatively impacting the
Q1 2012 steam coal production.
VANADIUM
In Q4 2011, the Company's production of primary vanadium
(vanadium slag) increased by 20% from Q3 as a result of higher
steel production volumes in Russia and South Africa as well as
increased efficiency of vanadium extraction at EVRAZ NTMK. The 24%
growth of FeV production volumes year-on-year reflects our focus on
increase of finished vanadium products in the sales mix. EVRAZ
Stratcor increased production of oxides, vanadium aluminium and
chemicals by 32% quarter-on-quarter as a result of better feedstock
availability.
* * *
Please note that the total volume of rolled steel products in
the table below excludes those re-rolled at other Group's mills.
These volumes are eliminated as intercompany sales for purposes of
Evraz's consolidated operating results.
PRODUCTION VOLUMES
Product, '000 tonnes 2011 2010 2011/ Q4 Q3 Q4 2011/
unless 2010, 2011 2011 Q3 2011,
otherwise stated change change
Steel products
Coke (saleable) 1,348 1,823 (26.1)% 195 306 (36.3)%
Pig iron 11,858 11,918 (0.5)% 2,998 2,865 4.7%
Pig iron (saleable) 131 145 (9.8)% 24 29 (18.0)%
Crude steel 16,773 16,291 3.0% 4,136 4,024 2.8%
Steel products, net
of re-rolled volumes 15,234 14,698 3.6% 3,783 3,697 2.3%
Semi-finished products 3,544 3,767 (5.9)% 923 793 16.5%
Construction products 5,257 4,939 6.4% 1,333 1,351 (1.3)%
Railway products 2,055 1,889 8.8% 485 517 (6.3)%
Flat-rolled products 2,707 2,534 6.8% 648 609 6.4%
Tubular products 848 903 (6.1)% 194 238 (18.4)%
Other steel products 823 667 23.5% 199 188 5.5%
Russia
Coke (saleable) 532 669 (20.4)% 120 128 (6.1)%
Pig iron 10,337 10,221 1.1% 2,605 2,540 2.6%
Pig iron (saleable) 65 67 (2.7)% 17 18 (7.5)%
Crude steel 12,125 11,954 1.4% 3,003 2,909 3.2%
Steel products, net
of re-rolled volumes 10,942 10,856 0.8% 2,724 2,639 3.2%
Semi-finished products 4,202 4,656 (9.8)% 1,030 915 12.6%
Construction products 4,220 3,823 10.4% 1,093 1,089 0.4%
Railway products 1,564 1,493 4.8% 361 396 (8.9)%
Flat-rolled products 356 314 13.3% 97 102 (5.1)%
Other steel products 600 571 5.2% 143 137 4.4%
Ukraine
Coke (saleable) 816 1,155 (29.4)% 75 178 (58.0)%
Pig iron 862 920 (6.4)% 200 209 (4.4)%
Pig iron (saleable) 66 79 (15.8)% 7 11 (34.9)%
Crude steel 860 884 (2.7)% 211 215 (2.1)%
Steel products 737 786 (6.2)% 177 186 (5.0)%
Semi-finished products 213 331 (35.8)% 63 47 34.7%
Construction products 426 411 3.7% 88 118 (25.4)%
Other steel products 98 44 125.5% 26 22 20.0%
Europe
Crude steel 776 354 119.2% 193 181 6.8%
Steel products 1,267 1,160 9.3% 284 270 5.2%
Construction products 131 145 (9.9)% 33 32 2.5%
Flat-rolled products 1,057 993 6.5% 236 216 9.3%
Other steel products 79 22 261.2% 15 22 (31.3)%
North America
Crude steel 2,332 2,317 0.6% 543 599 (9.4)%
Steel products, net
of re-rolled volumes 2,646 2,563 3.3% 638 675 (5.5)%
Construction products 302 380 (20.6)% 74 81 (8.6)%
Railway products 490 396 23.6% 124 121 2.4%
Flat-rolled products 1,007 883 14.0% 246 236 4.4%
Tubular products 848 903 (6.1)% 194 238 (18.4)%
South Africa
Pig iron 660 777 (15.1)% 193 116 66.9%
Crude steel 681 783 (13.0)% 187 120 56.2%
Steel products 564 590 (4.4)% 137 111 23.5%
Semi-finished products 51 35 45.0% 7 16 (54.5)%
Construction products 179 180 (0.2)% 46 32 42.7%
Flat-rolled products 287 344 (16.5)% 69 55 25.3%
Other steel products 46 30 51.0% 15 8 90.4%
Mining products
Iron ore
Lumpy ore (Ukraine) 2,446 2,044 19.7% 635 724 (12.3)%
Concentrate, saleable
(Russia) 6,447 5,822 10.7% 1,572 1,734 (9.3)%
Sinter (Russia) 4,473 3,999 11.9% 1,235 1,009 22.4%
Pellets (Russia) 5,907 5,616 5.2% 1,505 1,465 2.7%
Fines ore (South Africa) 640 601 6.5% 150 186 (19.3)%
Lumpy ore (South Africa) 1,257 1,723 (27.1)% 282 317 (11.1)%
Coal
Raw coking coal (mined) 6,303 7,509 (16.1)% 1,470 1,237 18.8%
Raw steam coal (mined) 2,965 3,830 (22.6)% 596 889 (32.9)%
Coking coal concentrate
(production) 6,501 6,768 (3.9)% 1,564 1,391 12.5%
Steam concentrate (production) 859 1,503 (42.8)% 193 338 (42.8)%
Vanadium products (tonnes
of V) (1)
Vanadium in slag (gross
production) 20,741 20,664 0.4% 5,780 4,804 20.3%
Russia 12,860 12,293 4.6% 3,777 3,201 18.0%
South Africa 7,881 8,371 (5.9)% 2,002 1,603 24.9%
Vanadium in final products
(saleable)
Ferrovanadium 16,708 13,507 23.7% 4,213 4,317 (2.4)%
Produced at own facilities 6,347 5,252 20.8% 1,693 1,535 10.3%
Processed at 3(rd) parties'
facilities 10,362 8,255 25.5% 2,520 2,782 (9.4)%
Nitrovan(R) 2,874 2,454 17.1% 645 819 (21.3)%
Oxides, vanadium aluminium
and chemicals 1,277 1,317 (3.0)% 398 302 32.0%
Equity investments
Raspadskaya (2)
Coking coal (mined) 6,251 7,160 (12.7)% 1,582 1,212 30.5%
*Numbers may not add to totals due to rounding. Percent changes
based on numbers prior to rounding.
1 Calculated in pure vanadium equivalent.
2 EVRAZ holds a 40% effective interest in the Raspadskaya coal
company.
AVERAGE SELLING PRICES
USD/tonne (ex works) 2011 2010 Q4 2011 Q3 2011
unless otherwise stated
Steel products
Russia
Coke 231 196 198 222
Pig iron 466 384 461 494
Steel products
Semi-finished products 529 420 514 537
Construction products 732 595 693 761
Railway products 882 709 854 914
Flat-rolled products 706 589 647 707
Other steel products 790 655 741 833
Ukraine
Coke 310 267 307 311
Pig iron 491 374 482 498
Steel products
Semi-finished products 569 438 553 623
Construction products 691 562 678 706
Other steel products 989 975 935 1,103
Europe
Steel products
Construction products 896 759 875 906
Flat-rolled products 907 719 820 942
North America
Steel products
Construction products 897 766 891 944
Railway products 1,023 942 1,027 1,040
Flat-rolled products 1,134 880 1,095 1,188
Tubular products 1,486 1,404 1,493 1,540
South Africa
Steel products
Semi-finished products 587 438 626 642
Construction products 797 663 829 838
Flat-rolled products 837 710 808 926
Other steel products 677 523 721 961
Mining products
Iron ore
Lumpy ore (Ukraine) 78 58 77 84
Concentrate, saleable
(Russia) 111 86 94 115
Sinter (Russia) 128 92 118 121
Pellets (Russia) 132 89 124 133
Fines ore (South Africa) 24 31 15 22
Coal
Coking coal 97 66 89 104
Steam coal 36 26 34 37
Concentrate 203 140 178 224
Steam concentrate 80 58 80 85
Vanadium products (USD/t
of V)
Vanadium in final products
Ferrovanadium 27,653 27,338 25,896 27,811
Nitrovan(R) 29,506 28,860 28,057 30,333
Oxides, vanadium aluminium
and chemicals 36,194 38,527 34,610 34,635
Notes:
Semi-finished products include 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 products include commodity plate, specialty plate
and other flat products.
Tubular products include 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 Europe - slabs and crane rails; for South Africa -
rails.
###
For further information:
Investor Relations: Alexander Boreyko Director, Investor
Relations
London: +44 207 832 8990 Moscow: +7 495 232 1370
ir@evraz.com
Media Relations: Oleg Kuzmin VP, Corporate Communications
London: +44 207 832 8998 Moscow: +7 495 937 6871 media@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium
business with operations in the Russian Federation, Ukraine, USA,
Canada, Czech Republic, Italy and South Africa. EVRAZ was ranked
the 15th largest steel producer in the world based on crude steel
production of 16.3 million tonnes in 2010. A significant portion of
the Group's internal consumption of iron ore and coking coal is
covered by its mining operations. The Group's consolidated revenues
for the year ended 31 December 2010 were US$13,394 million and
consolidated adjusted EBITDA amounted to US$2,350 million. EVRAZ
plc holds 99.8% of Evraz Group S.A.
This information is provided by RNS
The company news service from the London Stock Exchange
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