Severstal : reports Q3 & 9M 2020 operational results

PAO Severstal (SVST) Severstal reports Q3 & 9M 2020 operational results 09-Oct-2020 / 09:02 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 Q3 & 9M 2020 operational results   Moscow, Russia - 9 October 2020 - PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q3 & 9M 2020.   Q3 2020 GROUP HIGHLIGHTS Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2 2020: 2.33 mln tonnes) following the completion of maintenance works at blast furnace facilities in the previous quarter. Crude steel production increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported by growth in hot metal output. Consolidated sales of steel products increased 18% q/q to 3.01 mln tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth, a lower share of export shipments with a longer realisation period vs the previous quarter and finished goods stock reduction. The Company increased its share of domestic steel shipments to 63% (Q2 2020: 56%) in response to a demand recovery in Russia in Q3 2020. The share of high value-added (HVA) products within the sales portfolio amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA products, and the Company reduced HVA finished goods stock levels q/q. Sales volumes of coking coal concentrate from Vorkutaugol declined 5% q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower run-of-mine (ROM-rate) at the Zapolyarnaya mine. Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 mln tonnes) on the back of iron ore pellet production growth and inventory sell-off q/q. Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2 2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky Okatysh and Olcon. 9M 2020 GROUP HIGHLIGHTS   Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M 2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF steel following the disposal of Balakovo mini-mill in July 2019. The share of HVA products remained stable y/y at 45% in 9M 2020. The share of domestic shipments in 2020 was 58%, which is lower than in 2019 (9M 2019: 67%). This is a result of a deceleration in domestic demand in 2020 after achieving peak levels in the previous year and the disposal of the Balakovo mini-mill, which primarily served domestic markets. The average steel selling prices for 9M 2020 declined from 10% to 19% across the product range, as a result of adverse pricing dynamics of global benchmarks y/y. Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M 2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the Yakovlevskiy mine y/y. The Company expects to achieve total production of around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020. Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y.   SUMMARY OF KEY PRODUCTION, SALES VOLUMES   Production, thousands of tonnes Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Crude Steel (Russian Steel) 2,890 2,807 3% 8,547 9,133 (6%) Hot metal (Russian Steel) 2,402 2,331 3% 7,143 7,125 0%       Sales volumes, thousands of tonnes Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Coking coal concentrate 1,218 1,276 (5%) 3,445 3,340 3% Iron ore pellets 2,613 2,532 3% 8,112 8,192 (1%) Iron ore concentrate 1,960 1,904 3% 5,333 4,660 14% Total steel products (Consolidated) 3,006 2,551 18% 8,306 8,503 (2%) Total steel products (Russian Steel) 3,020 2,561 18% 8,340 8,538 (2%)     High value added steel products, % Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Severstal (Consolidated) 49% 43% 6 ppts 45% 45% (0 ppts) Severstal Russian Steel 49% 43% 6 ppts 45% 45% (0 ppts)         SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)   Sales volumes, thousands of tonnes Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Coal: 344 370 (7%) 1,101 1,250 (12%) Coking coal concentrate 46 104 (56%) 215 331 (35%) Steam coal 298 266 12% 886 919 (4%) Iron ore: 1,358 1,511 (10%) 4,530 4,785 (5%) Iron ore pellets 1,355 1,461 (7%) 4,343 4,170 4% Iron ore concentrate 3 50 (94%) 187 615 (70%) Semi-finished products 97 100 (3%) 389 279 39% Rolled products: 2,383 2,084 14% 6,637 6,916 (4%) Hot - rolled coil 1,267 1,179 7% 3,643 3,310 10% Hot - rolled plate 244 219 11% 715 702 2% Cold - rolled coil 253 198 28% 661 743 (11%) Galvanised and metallic coated coil 286 196 46% 701 729 (4%) Colour coated coil 162 113 43% 373 365 2% Long products 171 179 (4%) 544 1,067 (49%) Downstream products: 526 367 43% 1,280 1,308 (2%) Metalware products 145 135 7% 426 413 3% Large diameter pipes 85 25 n/a 129 303 (57%) Other tubes, pipes, formed shapes 296 207 43% 725 592 22%     SEVERSTAL RESOURCES Sales volumes of coking coal concentrate from Vorkutaugol declined 5% q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower run-of-mine (ROM-rate) at the Zapolyarnaya mine. ROM coal production at Vorkutaugol decreased by 7% in Q3 2020 vs Q2 2020. Iron ore pellet sales increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 mln tonnes) as a result of higher production levels of iron ore pellets and inventory sell-off q/q. Iron ore concentrate sales volumes grew by 3% to 1.96 mln tonnes (Q2 2020: 1.90 mln tonnes) mainly driven by higher output at Karelsky Okatysh and Olcon.   Sales volumes, thousands tonnes Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Coal: 1,516 1,542 (2%) 4,331 4,260 2% Coking coal concentrate 1,218 1,276 (5%) 3,445 3,340 3% Steam coal 298 266 12% 886 920 (4%) Iron ore: 4,573 4,436 3% 13,445 12,852 5% Iron ore pellets 2,613 2,532 3% 8,112 8,192 (1%) Iron ore concentrate 1,960 1,904 3% 5,333 4,660 14%     SEVERSTAL RUSSIAN STEEL ('RSD') RSD steel product sales of steel products increased 18% q/q to 3.02 mln tonnes in Q3 2020 (Q2 2020: 2.56 mln tonnes) reflecting production growth, a lower share of export shipments with a longer realisation period vs the previous quarter and finished goods stock reduction. The Company increased its share of domestic steel shipments to 63% (Q2 2020: 56%) in response to demand recovery in Russia in Q3 2020. The share of high value-added (HVA) products within the sales portfolio amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA products, and the Company reduced HVA finished goods stock levels q/q. LDP sales volumes increased to 85,000 tonnes in Q3 2020, due to reduced stock levels at the Izhora Pipe Mill (ITZ). In response to a contraction in domestic demand, the Company reallocated a portion of its sales volumes to export destinations in Q3 2020. The weighted average selling price for the whole range of steel products in Q3 2020 increased by 2%, due to positive steel pricing dynamics at export destinations and a higher share of HVA products in the sales mix q/q. Severstal successfully maintained higher average selling prices throughout 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 Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Total steel products 3,020 2,561 18% 8,340 8,538 (2%) Semi-finished products 98 100 (2%) 390 279 40% Rolled products: 2,395 2,093 14% 6,667 6,949 (4%) Hot - rolled coil 1,268 1,178 8% 3,644 3,311 10% Hot - rolled plate 244 219 11% 715 703 2% Cold - rolled coil 253 198 28% 661 743 (11%) Galvanised and metallic coated coil 286 196 46% 701 729 (4%) Colour coated coil 162 113 43% 373 365 2% Long products 182 189 (4%) 573 1,098 (48%) Downstream products: 527 368 43% 1,283 1,310 (2%) Metalware products 147 135 9% 429 416 3% Large diameter pipes 85 25 n/a 129 303 (57%) Other tubes, pipes, formed shapes 295 208 42% 725 591 23%   Sales price, $/tonne Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Semi-finished products 376 388 (3%) 385 427 (10%) Hot - rolled coil 416 417 0% 423 506 (16%) Hot-rolled plate 517 545 (5%) 558 660 (15%) Cold - rolled coil 504 528 (5%) 536 621 (14%) Galvanised and metallic coated coil 639 643 (1%) 638 724 (12%) Colour coated coil 797 790 1% 789 894 (12%) Long products 411 417 (1%) 419 476 (12%) Metalware products 832 837 (1%) 852 965 (12%) Large diameter pipes 825 778 6% 811 996 (19%) Other tubes, pipes, formed shapes 480 477 1% 492 578 (15%)   Sales price, $/tonne Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % Weighted average steel selling price 510 500 2% 510 602 (15%)     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: [phone] ext. 6445 [e-mail]   Public Relations Anastasia Mishanina T: [phone] ext. 6457 [e-mail]   Severstal's financial communications agency - Hudson Sandler Andrew Leach / Emily Dillon T: [phone] ***   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 MOEX 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.:	85657
EQS News ID:	1139893

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