TIDMEVR
RNS Number : 3847L
Evraz Plc
30 April 2020
EVRAZ Q1 2020 TRADING UPDATE
30 April 2020 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its trading update for the first quarter of
2020.
Q1 2020 vs Q4 2019 HIGHLIGHTS
-- In Q1 2020, EVRAZ' consolidated crude steel output rose by
3.2% QoQ, mainly due to completion of capital
repairs at EVRAZ NTMK's converter no. 2 , which took place in Q4 2019.
-- Total steel product sales fell by 10.4% QoQ. Sales of
semi-finished products dropped by 15.3% QoQ, due to higher than
usual sales volumes from Russia at Q4 2019 on the back of good
export market conditions.
-- Sales of finished products went down by 6.1%, due to seasonal
decline in demand in the first quarter of the year in Russia as
well as due to the sale of Palini e Bertoli in 2019. In addition,
sales of finished products were impacted by lower tubular product
sales volumes due to a lack of line pipe orders and deterioration
of oil country tubular goods (OCTG) market demand in North America
.
-- Total raw coking coal production decreased by 4.8% QoQ,
driven by weaker demand for coal on global markets as well as lower
production at Yuzhkuzbassugol's mines following the longwall move
at the Uskovskaya mine. Production at Mezhegeyugol has been
suspended until favourable market conditions are restored.
-- External sales volumes of coking coal products surged by
30.4% QoQ due to successfully completed task to maximise product
shipments as well as higher sales volumes to China.
-- External sales of iron ore products jumped by 30.0% QoQ as
most of the Q4 2019 sales volumes were delivered in Q1 2020 due to
logistical limitations on shipments to China.
-- Sales of vanadium products fell by 9.9% QoQ, mainly due to
weaker demand for FeV in Europe as a result of reduced steel
utilisation rates following lower demand in the automotive
industry. Lower FeV sales to Europe was partially compensated by
increased FeV and oxide sales to Asia and Russia.
Product, '000 tonnes Q1 Q4 Q1 2020/ Q4 2019, change Q1 Q1 2020/ Q1 2019, change
2020 2019 2019
--------------------------------------- ------ ------ ------------------------- ------- -------------------------
Total crude steel production 3,559 3,449 3.2% 3,488 2.0%
Russia 3,121 3,008 3.8% 2,986 4.5%
North America 438 441 -0.7% 502 -12.7%
Total raw coking coal mined 5,692 5,981 -4.8% 6,844 -16.8%
Total coking coal concentrate
production 3,747 3,537 5.9% 3,684 1.7%
Iron ore products production 3,595 3,277 9.7% 3,636 -1.1%
Total sales of steel products 3,227 3,603 -10.4% 3,135 2.9%
Semi-finished products 1,437 1,697 -15.3% 1,335 7.6%
Finished products 1,790 1,906 -6.1% 1,800 -0.6%
Total sales of third-party steel
products 175 200 -12.7% 180 -2.8%
Sales of coking coal products 3,278 2,514 30.4% 2,656 23.4%
Sales of iron ore products 355 273 30.0% 464 -23.5%
Sales of v vanadium in slag 765 1,923 -60.2% 1,176 -34.9%
Sales of vanadium final products* 3,168 3,514 -9.9% 2,518 25.8%
--------------------------------------- ------ ------ ------------------------- ------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
* In tonnes of pure vanadium
CONFERENCE CALL DETAILS
A conference call to discuss the trading update will be held on
Thursday, 30 April 2020, at:
-- 11 am (New York time)
-- 4 pm (London time)
-- 6 pm (Moscow time)
Key speakers:
-- Alexey Ivanov , Senior Vice President, Commerce and Business Development
-- Alexander Erenburg , Vice President, Head of the Vanadium Division
-- Sergey Stepanov , Vice President, Head of the Coal Division
-- Alexander Vasiliev , Chief Financial Officer, EVRAZ North America
To join the call, please dial:
+ 44 (0)20 3936 UK
2999
+ 7 495 283 9705 Russia
+ 1 646 664 1960 US
Access code : 171622
To avoid any technical inconvenience, it is recommended that
participants dial in 10 minutes before the start of the call.
The Q1 2020 trading update presentation will be available on the
Group's website, www.evraz.com , on Thursday, 30 April 2020, at the
following link:
https://www.evraz.com/en/investors/reports-and-results/presentations/
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements", which
include all statements other than statements of historical facts,
including, without limitation, any statements preceded by, followed
by or that include the words "targets", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "would", "could"
or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements, including, among others, the
achievement of anticipated levels of profitability, growth, cost
and synergy of recent acquisitions, the impact of competitive
pricing, the ability to obtain necessary regulatory approvals and
licenses, the impact of developments in the Russian economic,
political and legal environment, volatility in stock markets or in
the price of the Group's shares or GDRs, financial risk management
and the impact of general business and global economic conditions.
Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and
the environment in which the Group will operate in the future. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. These
forward-looking statements speak only as at the date as of which
they are made, and each of EVRAZ and the Group expressly disclaims
any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to
reflect any change in EVRAZ' or the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statements are based. Neither the Group, nor any
of its agents, employees or advisors intends or has any duty or
obligation to supplement, amend, update or revise any of the
forward-looking statements contained in this document.
STEEL SEGMENT
Total production volumes
Product, '000 tonnes Q1 2020 Q4 2019 Q1 2020/ Q4 2019, change Q1 2019 Q1 2020/ Q1 2019, change
---------------------------------- -------- -------- ------------------------- -------- -------------------------
Pig iron production 2,828 2,764 2.3% 2,712 4.3%
EVRAZ ZSMK 1,556 1,555 0.1% 1,471 5.8%
EVRAZ NTMK 1,272 1,209 5.2% 1,241 2.5%
Crude steel production 3,121 3,008 3.8% 2,986 4.5%
EVRAZ ZSMK 1,980 1,956 1.2% 1,895 4.5%
EVRAZ NTMK 1,141 1,052 8.5% 1,091 4.6%
Total steel products production,
net of re-rolled
volume(1) 2,867 2,871 -0.1% 2,622 9.3%
EVRAZ ZSMK 1,743 1,770 -1.5% 1,686 3.4%
EVRAZ NTMK 1,032 983 5.0% 794 30.0%
EVRAZ Caspian Steel 92 76 21.1% 45 104.4%
Iron ore products production 3,595 3,277 9.7% 3,636 -1.1%
Pellets (EVRAZ KGOK) 1,665 1,531 8.8% 1,643 1.3%
Sinter (EVRAZ KGOK) 916 802 14.2% 898 2.0%
Concentrate saleable (EVRAZ
KGOK, Evrazruda) 1,014 944 7.4% 1,095 -7.4%
Coking coal concentrate
production 486 493 -1.4% 454 7.0%
From own raw coal(2) 350 331 5.7% 256 36.7%
From third-party raw coal 136 162 -16.0% 198 -31.3%
Gross vanadium slag production(3) 4,979 4,667 6.7% 4,446 12.0%
---------------------------------- -------- -------- ------------------------- -------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) Including EVRAZ Palini e Bertoli
(2) From Coal segment
(3) In tonnes of pure vanadium
In Q1 2020, pig iron production grew by 2.3% QoQ, with a 5.2%
QoQ increase in production volumes at EVRAZ NTMK mainly due to the
resumption of operations at blast furnace no. 5 following the
completion of capital repairs that affected production in Q4
2019.
Crude steel output rose by 3.8% QoQ, mainly due to completion of
capital repairs at EVRAZ NTMK's converter no. 2, which took place
in Q4 2019.
Total output of steel products remained almost flat QoQ, with a
5% QoQ increase in production volumes at EVRAZ NTMK due to a
greater output of steel. In addition, EVRAZ Caspian Steel increased
production by 21.1% QoQ due to higher demand from customers.
Output of iron ore products rose by 9.7% QoQ, mainly due to
completion of capital repairs of roasting machine no. 1 and lower
pellet production, which took place at EVRAZ KGOK in Q4 2019.
Consolidated output of vanadium slag edged up by 6.7% QoQ due to
higher vanadium content in iron ore and pig iron as well as duplex
process at EVRAZ NTMK.
Total sales volumes
Product, '000 tonnes Q1 2020 Q4 2019 Q1 2020/ Q1 2019 Q1 2020/ Q1 2019, change
Q4 2019, change
------------------------------------------ -------- -------- ----------------- -------- -------------------------
Coke(1) 105 90 17.2% 86 22.1%
Steel products, external sales 2,754 3,073 -10.4% 2,582 6.7%
Semi-finished products 1,401 1,665 -15.9% 1,279 9.5%
Slabs 570 719 -20.7% 482 18.3%
Billets 656 767 -14.5% 646 1.5%
Other steel products(2) 175 179 -2.3% 151 15.9%
Finished products 1,353 1,408 -3.9% 1,303 3.8%
Construction products 839 855 -2.0% 729 15.1%
Railway products 358 370 -3.4% 343 4.4%
Flat products - 52 -100.0% 91 -100.0%
Other steel products 157 131 20.3% 140 12.1%
Steel products, inter-segment sales 40 10 315.9% 186 -78.5%
Third-party steel products, external
sales 175 200 -12.7% 180 -2.8%
Iron ore products, external sales 355 273 30.0% 464 -23.5%
Pellets 355 273 30.0% 464 -23.5%
Sales of vanadium in slag 765 1,923 -60.2% 1,176 -34.9%
Sales of vanadium final products(3) 3,168 3,514 -9.9% 2,518 25.8%
------------------------------------------ -------- -------- ----------------- -------- -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
(1) The Q1 2019 and Q4 2019 data have been adjusted
(2) Includes tonnes of pig iron
(3) In tonnes of pure vanadium
In Q1 2020, external sales of steel products went down by 10.4%
QoQ. Sales of semi-finished products fell by 15.9% QoQ due to
higher than usual sales volumes from Russia at Q4 2019 on the back
of good export market conditions. The decline was partly offset by
the completion of capital repairs at EVRAZ NTMK's oxygen-converter
steelmaking shop, which took place in Q4 2019.
Sales of finished products dropped by 3.9% QoQ due to seasonal
decline in demand in the first quarter of the year in Russia as
well as due to the sale of Palini e Bertoli in 2019.
Sales of iron ore products surged by 30.0% QoQ as most of the Q4
2019 sales volumes were delivered in Q1 2020 due to logistical
limitations on shipments to China .
Sales of vanadium final products fell by 9.9% QoQ, mainly due to
weaker demand for FeV in Europe as a result of reduced steel
utilisation rates following lower demand in the automotive
industry. Lower FeV sales to Europe was partially compensated by
increased FeV and oxide sales to Asia and Russia.
Cash cost, US$/t Q1 Q4 Q1 2020 / Q4 2019, change Q1 Q1 2020 / Q1 2019, change
2020 2019 2019
------------------------------------- ------ ------ -------------------------- ------- --------------------------
Slab cash cost vertically integrated 223 243 -8% 223 0%
Iron ore products (Fe 62%) 38 47 -19% 37 3%
------------------------------------- ------ ------ -------------------------- ------- --------------------------
Average selling prices
US$/tonne (exworks) Q1 Q4 Q1
2020 2019 2019
---------------------------------------------------------------------------------------------- ------ ------ ------
Coke 167 187 223
Steel products 474 454 481
Semi-finished products(1) 346 317 381
Construction products 503 488 522
Railway products 923 940 743
Other steel products 498 530 593
Pellets 54 53 75
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade Western
Europe(2) 26,54 23,05 73,33
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2) 27,18 26,05 87,93
---------------------------------------------------------------------------------------------- ------ ------ ------
(1) Includes prices for pig iron
(2) US$/kgV
In Q2 2020, the Group expects that the COVID-19 pandemic does
not significantly affect the production of pig iron and steel on
its operations in Russia, however it could possibly affect the
rolling mills utilisation following expected decrease in demand on
the domestic market.
Pig iron production volumes are expected to decrease following
capital repairs of blast furnace no. 2 in May 2020, the gas pause
in June at EVRAZ ZSMK and capital repairs of blast furnace no. 7 in
May 2020 at EVRAZ NTMK.
Iron ore pellet production volumes are expected to be slightly
lower, mainly due to capital repairs at the pelletising plant and
reduced sinter production due to capital repairs at EVRAZ KGOK's
sinter plant in May 2020.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes
Product, '000 tonnes Q1 Q4 2019 Q1 2020/ Q1 2019 Q1 2020/ Q1 2019, change
2020 Q4 2019, change
-------------------------------------------- ------ -------- ----------------- -------- -------------------------
Crude steel 438 441 -0. 7 % 502 -12.7%
EVRAZ US mills 251 213 17.8% 235 6.8%
EVRAZ Canadian mills 188 228 -17.5% 267 -29.6%
Total steel products production, net of
re-rolled volume 486 510 -4.7% 559 -13.1%
EVRAZ US mills 336 324 3.7% 351 -4.3%
EVRAZ Canadian mills 150 186 -19.4% 208 -27.9%
Sales of steel products 473 530 -10.8% 553 -14.5%
Semi-finished products 36 32 12.5% 56 -35.7%
Construction products 66 55 20.0% 67 -1.5%
Railway products* 105 117 -10.3% 98 7.1%
Flat-rolled products 107 115 -7.0% 140 -23.6%
Tubular products* 159 211 -24.6% 192 -17.2%
-------------------------------------------- ------ -------- ----------------- -------- -------------------------
* The Q1 2019 data have been adjusted
In Q1 2020, crude steel production edged down by 0. 7 % QoQ.
This was attributable to a sharp drop in steel volumes at EVRAZ
Regina due to a large outage, which was offset by greater output
from EVRAZ Pueblo. EVRAZ Pueblo's steel production rose due to the
greater number of operating days following the planned maintenance
outage in October 2019 and an improved operating performance.
Total output of steel products fell by 4.7%, mainly driven by a
large shutdown in March 2020 (3.5 weeks) due to the Ryuk virus
cyberattack and due to a decision to move EVRAZ Regina's planned
outage from April to March 2020.
In Q1 2020, sales of semi-finished products rose by 12.5%,
driven by the greater slab sales.
Sales of construction products surged by 20% QoQ with improved
market demand as customers had drawn down inventories and required
replacement material.
Sales of railway products fell by 10.3% QoQ amid a slower order
intake in Q1 2020.
Flat-rolled product sales dropped by 7% QoQ as a result of
weakening market demand.
Tubular products sales volumes went down by 24.6% QoQ due to the
lack of LP orders and deterioration of OCTG market demand.
Prices for construction products climbed by 6% QoQ, driven
primarily by higher scrap costs. Prices for tubular products were
down due to a change in LDP order mix, as well as higher
competition in the OCTG and LP sector while facing softening
demand.
Average selling prices
US$/tonne (ex-works) Q1 Q4 Q1
2020 2019 2019
----------------------- ------ ------ ------
Construction products 685 644 848
Flat-rolled products 767 747 1,048
Tubular products* 1,219 1,348 1,356
----------------------- ------ ------ ------
* The Q1 2019 data have been adjusted
Sales volumes for EVRAZ North America in Q2 2020 expected to be
relatively flat with decline in OCTG volume driven by significantly
lower drilling activity in Western Canada to be offset by higher
LDP shipments.
COAL SEGMENT
Production volumes
Product, '000 tonnes Q1 Q4 Q1 2020/ Q4 2019, change Q1 2019 Q1 2020/ Q1 2019, change
2020 2019
-------------------------------------- ------ ------ ------------------------- -------- -------------------------
Raw coking coal (mined) 5,692 5,981 -4.8% 6,844 -16.8%
Yuzhkuzbassugol 2,704 3,065 -11.8% 2,606 3.8%
Raspadskaya 2,952 2,712 8.8% 3,916 -24.6%
Mezhegeyugol 36 204 -82.4% 322 -88.8%
Coking coal concentrate (production) 3,261 3,044 7.1% 3,229 1.0%
Produced at Yuzhkuzbassugol coal
washing plants 1,411 1,407 0.3% 1,433 -1.5%
Produced at the Raspadskaya coal
washing plant 1,850 1,637 13.0% 1,796 3.0%
-------------------------------------- ------ ------ ------------------------- -------- -------------------------
In Q1 2020, overall raw coking coal output fell by 4.8% QoQ,
primarily due to weaker market demand as well as lower production
at Yuzhkuzbassugol's mines following the longwall move at the
Uskovskaya mine. A higher rate of mining equipment failures and
more complex geological conditions at the Osinnikovskaya mine also
contributed to the overall output decline at Yuzhkuzbassugol's
mines QoQ. Production of raw coking coal at Mezhegeyugol went down
by 82.4% after the decision was taken to suspend output due to
unfavourable market conditions.
This was partly offset by higher production volumes at the
Raspadskaya mine due to the resumption of mining on three longwalls
following the completion of a longwall move.
Raw coking coal mined dropped by 16.8% YoY after the Razrez
Raspadsky open pit's output was reduced to an appropriate volume
for current market demand, as well as due to decision to transfer
resources to the production of a more premium coking coal grade at
the open-pit site of Raspadskaya-Koksovaya mine.
Output of coking coal concentrate rose by 7.1%, primarily due to
higher sales volumes QoQ.
Sales volumes
Product, '000 tonnes Q1 Q4 Q1 2020/ Q4 2019, change Q1 Q1 2020/ Q1 2019, change
2020 2019 2019
--------------------------- ------ ------ ------------------------- ------ -------------------------
External sales 3,278 2,514 30.4% 2,656 23.4%
Raw coking coal 707 527 34.0% 497 42.3%
Coking coal concentrate 2,572 1,987 29.5% 2,160 19.1%
Intersegment sales 1,624 1,688 -3.8% 1,519 6.9%
Raw coking coal 492 464 6.0% 396 24.2%
Coking coal concentrate 1,132 1,224 -7.5% 1,123 0.8%
--------------------------- ------ ------ ------------------------- ------ -------------------------
In Q1 2020, external sales volumes of coking coal products
surged by 30.4%. Raw coking coal sales volumes jumped by 34.0% QoQ
following higher shipments from the Erunakovskaya and Uskovskaya
mines. Coking coal concentrate sales volumes rose by 29.5% QoQ due
to successfully completed task to maximise product shipments as
well as higher sales volumes to China.
Cash cost, US$/t Q1 Q4 Q1 2020 / Q4 2019, change Q1 Q1 2020 / Q1 2019, change
2020 2019 2019
------------------------- ------ ------ -------------------------- ------- --------------------------
Coking coal concentrate 3 3 37 - 11 % 35 -6 %
------------------------- ------ ------ -------------------------- ------- --------------------------
Average selling prices
Q1 Q4 Q1
US$/tonne (ex works) 2020 2019 2019
------------------------- ------ ------ ------
Raw coking coal 33 35 57
Coking coal concentrate 70 84 117
------------------------- ------ ------ ------
In Q1 2020, coking coal selling prices moved in line with global
benchmarks.
In Q2 2020, raw coal production is expected to decrease QoQ due
to longwall moves at the Raspadskaya-Koksovaya, Uskovskaya mines
and reduced output at the Razrez Raspadsky open pit, as well as due
to the reserves depletion at one of the longwalls at Raspadskaya
mine. The decline will be partly offset by the completion of
longwall move at the Erunakovskaya mine.
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 further information:
Media Relations:
Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
Moscow: +7 495 232 1370
ir@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium
business with operations in Russia, Kazakhstan, the US, Canada and
Czech Republic. EVRAZ is among the top steel producers in the world
based on crude steel production of 14 million tonnes in 2019. 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 2019 were
US$11,905 million, and consolidated EBITDA amounted to US$2,601
million.
This information is provided by RNS, the news service of the
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END
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