PAO SEVERSTAL

SVST
Real-time Estimate Quote. Real-time Estimate  - 11/26 08:23:11 am
15.085USD +1.24%

Severstal : reports Q2 & H1 2020 operational results

07/13/2020 | 02:05am

PAO Severstal (SVST)
Severstal reports Q2 & H1 2020 operational results

13-Jul-2020 / 09:01 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


Severstal reports Q2 & H1 2020 operational results

 

Moscow, Russia - 13 July 2020 - 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 Q2 & H1 2020.

 

Q2 2020 GROUP HIGHLIGHTS

  • Hot metal output decreased 3% q/q to 2.33 mln tonnes in Q2 2020 (Q1 2020: 2.41 mln tonnes) due to maintenance works at BF#1, #4 and #5.
  • Crude steel production decreased 2% q/q to 2.81 mln tonnes in Q2 2020 (Q1 2020: 2.85 mln tonnes) as a result of the decline in hot metal output.
  • Consolidated steel product sales decreased 7% q/q to 2.55 mln tonnes in Q2 2020 (Q1 2020: 2.75 mln tonnes) reflecting lower crude steel production and a higher portion of export sales, which have a longer realisation period. In addition the Company increased stock of finished goods at the end of the quarter.
  • The share of steel export shipments remained high at 44% (Q1 2020: 45%) in response to a slowdown in domestic demand caused by lockdown measures implemented in Russia.
  • The share of high value-added (HVA) products within the sales portfolio amounted to 43% in Q2 2020 (Q1 2020: 42%), reflecting a higher level of colour coated shipments and lower sales of semi-finished products and hot rolled coil.
  • Coking coal concentrate sales volumes from Vorkutaugol increased 34% q/q to 1.28 mln tonnes in Q2 2020 as a result of planned production growth.

 

  • Iron ore pellet sales decreased 15% to 2.53 mln tonnes (Q1 2020: 2.97 mln tonnes). In response to weaker pricing dynamics for pellets in Q2 2020, Karelsky Okatysh reallocated a portion of its volumes into iron ore concentrate, achieving a higher rate of end-to-end efficiency of internal consumption at CherMK.

 

  • Iron ore concentrate sales volumes increased 30% q/q to 1.90 mln tonnes (Q1 2020: 1.47 mln tonnes) driven by production growth at Karelsky Okatysh, and a recovery in production levels following a planned decline in Q1 at Olcon.

 

H1 2020 GROUP HIGHLIGHTS

 

  • Hot metal output increased 2% y/y in H1 2020 to 4.74 mln tonnes (H1 2019: 4.67 mln tonnes) driven by reduced maintenance downtime and higher energy efficiency rates. Crude steel production decreased to 5.66 mln tonnes (H1 2019: 6.10 mln tonnes) following the sale of the Balakovo mini-mill in 2019.
  • Iron ore concentrate sales volumes increased 24% y/y to 3.37 mln tonnes (H1 2019: 2.73 mln tonnes) primarily reflecting the ramp-up of the Yakovlevskiy mine and higher production levels at Karelsky Okatysh.
  • Coking coal concentrate sales volumes from Vorkutaugol increased 12% y/y driven by planned production growth.
  • The share of HVA products in the sales mix declined 2 ppts to 43% in H1 2020 reflecting higher sales volumes of semi-finished products and hot rolled coil.
  • The average steel selling prices for H1 2020 declined from 9% to 23% across the product range reflecting global benchmark dynamics.

 

 

 

 

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

 

Production, thousands of tonnes

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Crude Steel (Russian Steel)

2,807

2,850

(2%)

5,657

6,101

(7%)

Hot metal (Russian Steel)

2,331

2,410

(3%)

4,741

4,667

2%

 

 

Sales volumes, thousands of tonnes

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Coking coal concentrate

1,276

951

34%

2,227

1,989

12%

Iron ore pellets

2,532

2,967

(15%)

5,499

5,731

(4%)

Iron ore concentrate

1,904

1,469

30%

3,373

2,729

24%

Total steel products (Consolidated)

2,551

2,749

(7%)

5,300

5,669

(7%)

Total steel products (Russian Steel)

2,561

2,759

(7%)

5,320

5,691

(7%)

 

 

High value added steel products, %

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Severstal (Consolidated)

43%

42%

1 ppts

43%

45%

(2 ppts)

Severstal Russian Steel

43%

42%

1 ppts

43%

45%

(2 ppts)

 

 

 

 

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

 

 

Sales volumes, thousands of tonnes

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Coal:

370

387

(4%)

757

920

(18%)

Coking coal concentrate

104

65

60%

169

265

(36%)

Steam coal

266

322

(17%)

588

655

(10%)

Iron ore:

1,511

1,661

(9%)

3,172

3,342

(5%)

Iron ore pellets

1,461

1,527

(4%)

2,988

2,790

7%

Iron ore concentrate

50

134

(63%)

184

552

(67%)

Semi-finished products

100

192

(48%)

292

190

54%

Rolled products:

2,084

2,170

(4%)

4,254

4,624

(8%)

Hot - rolled coil

1,179

1,197

(2%)

2,376

2,142

11%

Hot - rolled plate

219

252

(13%)

471

458

3%

Cold - rolled coil

198

210

(6%)

408

517

(21%)

Galvanised and metallic coated coil

196

219

(11%)

415

491

(15%)

Colour coated coil

113

98

15%

211

243

(13%)

Long products

179

194

(8%)

373

773

(52%)

Downstream products:

367

387

(5%)

754

855

(12%)

Metalware products

135

146

(8%)

281

266

6%

Large diameter pipes

25

19

32%

44

203

(78%)

Other tubes, pipes, formed shapes

207

222

(7%)

429

386

11%

 

 

 

SEVERSTAL RESOURCES

 

  • Coking coal concentrate sales volumes from Vorkutaugol increased 34% q/q to 1.28 mln tonnes in Q2 2020 as a result of planned production growth.
  • Iron ore pellet sales decreased 15% to 2.53 mln tonnes (Q1 2020: 2.97 mln tonnes). In response to weaker pricing dynamics for pellets in Q2 2020, Karelsky Okatysh reallocated a portion of its volumes into iron ore concentrate, achieving a higher rate of end-to-end efficiency of internal consumption at CherMK.

 

  • Iron ore concentrate sales volumes increased 30% q/q to 1.90 mln tonnes (Q1 2020: 1.47 mln tonnes) driven by production growth at Karelsky Okatysh, and a recovery in production levels following a planned decline in Q1 at Olcon.

Sales volumes, thousands tonnes

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Coal:

1,542

1,273

21%

2,815

2,644

6%

Coking coal concentrate

1,276

951

34%

2,227

1,989

12%

Steam coal

266

322

(17%)

588

655

(10%)

Iron ore:

4,436

4,436

0%

8,872

8,460

5%

Iron ore pellets

2,532

2,967

(15%)

5,499

5,731

(4%)

Iron ore concentrate

1,904

1,469

30%

3,373

2,729

24%

 

 

SEVERSTAL RUSSIAN STEEL ('RSD')

 

  • RSD steel product sales decreased 7% q/q to 2.56 mln tonnes in Q2 2020 (Q1 2020: 2.76 mln tonnes), reflecting lower crude steel production and a higher portion of export sales, which have a longer realisation period. In addition the Company increased stock of finished goods at the end of the quarter.
  • The share of steel export shipments remained high at 44% (Q1 2020: 45%) in response to a slowdown in domestic demand caused by lockdown measures implemented in Russia.
  • The share of high value-added (HVA) products within the sales portfolio amounted to 43% (Q1 2020: 42%), reflecting the increase in colour coated shipments and lower sales of semi-finished products and hot rolled coil.
  • LDP sales volumes remained low in Q2 2020 at 25,000 tonnes, due to specifics of the product mix and the accumulation of stock levels at the Izhora Pipe Mill (ITZ), which are due for realisation in H2 2020. In July 2020, ITZ won a tender to supply PAO Gazprom with 320,000 tonnes of large diameter pipes in 2021-2022. In response to a contraction in domestic demand the Company expects to reallocate a portion of its sales volumes to export destinations in H2 2020.
  • The weighted average selling price for the whole range of steel products in Q2 2020 declined by just 4%, despite the weaker price dynamics of global benchmarks. Severstal successfully maintained higher average selling prices over the period as a result of its customer-focused approach, the flexibility of its distribution channels and the high proportion of HVA products within its portfolio.

 

Sales volumes, thousands of tonnes

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Total steel products

2,561

2,759

(7%)

5,320

5,691

(7%)

Semi-finished products

100

192

(48%)

292

190

54%

Rolled products:

2,093

2,179

(4%)

4,272

4,644

(8%)

Hot - rolled coil

1,178

1,198

(2%)

2,376

2,142

11%

Hot - rolled plate

219

252

(13%)

471

458

3%

Cold - rolled coil

198

210

(6%)

408

517

(21%)

Galvanised and metallic coated coil

196

219

(11%)

415

491

(15%)

Colour coated coil

113

98

15%

211

243

(13%)

Long products

189

202

(6%)

391

793

(51%)

Downstream products:

368

388

(5%)

756

857

(12%)

Metalware products

135

147

(8%)

282

268

5%

Large diameter pipes

25

19

32%

44

203

(78%)

Other tubes, pipes, formed shapes

208

222

(6%)

430

386

11%

 

Sales price, $/tonne

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

Semi-finished products

388

388

0%

388

433

(10%)

Hot - rolled coil

417

435

(4%)

427

504

(15%)

Hot-rolled plate

545

607

(10%)

578

647

(11%)

Cold - rolled coil

528

582

(9%)

556

609

(9%)

Galvanised and metallic coated coil

643

633

2%

638

720

(11%)

Colour coated coil

790

774

2%

782

889

(12%)

Long products

417

429

(3%)

423

468

(10%)

Metalware products

837

884

(5%)

862

965

(11%)

Large diameter pipes

778

794

(2%)

785

1,021

(23%)

Other tubes, pipes, formed shapes

477

523

(9%)

500

577

(13%)

 

Q2 & H1 2020 ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE) HIGHLIGHTS

 

  • During the COVID-19 pandemic, minimising health risks to our employees is Severstal's key priority. Our preventive and protective measures include remote working where possible, limiting movement around sites, sanitation and disinfection, and temperature checking on arrival at work. We are continuing to purchase and distribute personal protective equipment, i.e. masks, respirators, safety glasses, hand sanitisers.
  • The LTIFR* for H1 2020 increased by 20% y/y to 0.85 (H1 2019: 0.71). At the same time, the number of incidents with contractors decreased to 16 in H1 2020 from 22 in H1 2019.
  • Tragically, there were four fatal incidents in Q1 2020: three of our staff members and one contractor. In Q2 2020 there were no fatalities. Two of our employees died when methane was emitted during degassing activity at the Vorkutinskaya mine. We are investigating each of these cases in detail and taking preventative measures to ensure that similar incidents do not take place in the future.

 

Health and Safety

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019

Change, %

LTIFR

0.89

0.81

10%

0.85

0.71

20%

 

 

  • At Severstal Russian Steel, total emissions of air pollutants remained almost unchanged in H1 2020 at 142,700 tonnes (H1 2019: 142,500 tonnes). This reflected a 2.8 times increase in the sulphur content of Olenegorsk iron ore concentrate but also the sale of Mini-Mill Balakovo in 2019. Air pollutant emissions per tonne of steel products increased in H1 2020 by 8% y/y to 24.9 kg per tonne of steel.
  • At Severstal Resources, total emissions of air pollutants fell by 1% y/y in H1 2020 to 99,500 tonnes (H1 2019: 100,400 tonnes).

 

 

Environment**

Q2 2020

Q1 2020

Change, %

H1 2020

H1 2019***

Change, %

Atmospheric emission of pollutants, thousand tonnes (Russian Steel)

66.4

76.3

(13%)

142.7

142.5

0%

Atmospheric emission of pollutants, thousand tonnes (Severstal Resources)

45.3

54.2

(16%)

99.5

100.4

(1%)

Specific atmospheric emission of pollutants, kg per tonne of steel****

23.3

26.4

(12%)

24.9

23.1

8%

Notes to this section:

 

* LTIFR refers to Lost Time Injury Frequency Rate of Severstal staff, the number of lost time injuries occurring in a workplace per 1 million hours worked

** Emissions data is calculated in accordance with Russian regulations and is reported to the relevant Russian authorities on an annual basis and reviewed by them

***Minor changes in data for H1 2019 took place due to a review of methodology and emissions intensity calculation per tonne of liquid steel, instead of crude steel

**** Steel production at Cherepovets Steel Mill and Severstal Long Product Mill Balakovo (the latter for Jan - Jul 2019)

 

 

Notes:

 

 

 

 

 

 

 

1) Sales prices are stated on EXW basis;

2) Segmental data includes intercompany sales;

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

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

 

Contacts

 

 

 

 

 

 

 

Investor Relations

Evgeny Belov

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

evgenii.belov@severstal.com

 

Public Relations

Anastasia Mishanina

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

anastasia.mishanina@severstal.com

 

Severstal's financial communications agency - Hudson Sandler

Andrew Leach / Emily Dillon

T: +44 (0) 20 7100% 4133

***

 

P?? 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 $8,157 million and EBITDA of $2,805 million in 2019. Severstal's crude steel production in 2019 reached 11.8 million tonnes. www.severstal.com

 

 

 



ISIN: US8181503025
Category Code: TST
TIDM: SVST
LEI Code: 213800OKDPTV6K4ONO53
Sequence No.: 75195
EQS News ID: 1091839

 
End of Announcement EQS News Service

fncls.ssp?fn=show_t_gif&application_id=1091839&application_name=news&site_id=zonebourse
© EQS 2020
Copier lien
All news about PAO SEVERSTAL
2m ago
23h ago
5d ago
11/12
11/02