30.07.2014
Moscow, Russia - July 30, 2014 - OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading steel and steel-related mining companies, today announces its Q2 and H1 2014 financial results.
Consolidated financial results for the quater ended 30 June 2014$ million, unless otherwise stated | Q2 2014 | Q1 2014 | Change, % | H1 2014 | H1 2013 | Change, % |
Revenue | 3,253 | 3,007 | 8.2% | 6,260 | 6,736 | (7.1%) |
EBITDA1 | 606 | 534 | 13.5% | 1,140 | 909 | 25.4% |
EBITDA margin, % | 18.6% | 17.8% | 0.8 ppts | 18.2% | 13.5% | 4.7 ppts |
Profit from operations | 404 | 336 | 20.2% | 740 | 500 | 48.0% |
Operating margin, % | 12.4% | 11.2% | 1.2 ppts | 11.8% | 7.4% | 4.4 ppts |
Free cash flow | 486 | 236 | 105.9% | 722 | 133 | n/a |
Net loss 2 | (661) | (100) | n/a | (761) | - | n/a |
Basic EPS3, $ | (0.82) | (0.12) | n/a | (0.94) | - | n/a |
Notes:
- EBITDA represents profit/(loss) from operations plus depreciation and amortization of productive assets (including the Group's share in depreciation and amortization of associates and joint ventures) adjusted for gain/(loss) on disposals of PPE and intangible assets and for share in associates' and joint ventures' non-operating income/(expenses).
- Net (loss)/ profit attributable to shareholders of OAO Severstal.
- Basic EPS is calculated based on the following basic weighted average number of shares outstanding during the period: 810.6 million shares for Q2 2014, Q1 2014, H1 2014 and H1 2013.
- Group revenue increased 8.2% q/q to $3,253 million (Q1 2014: $3,007 million) driven by a strong seasonal rebound in steel product sales volumes as well as a moderate recovery in steel prices;
- Group EBITDA increased 13.5% q/q to $606 million (Q1 2014: $534 million) and Group EBITDA margin grew 0.8 ppts q/q to 18.6% (Q1 2014: 17.8%). This margin represents the highest level since Q3 2011 and primarily reflects a combination of ongoing operational enhancements, a recovery in domestic steel prices and lower raw materials input costs at our steel operations;
- Net loss2 of $661 million (Q1 2014 loss of $100 million) includes expected non-cash losses preliminary estimated at $1,066 million on the disposals5 of Severstal Dearborn LLC, Severstal Columbus LLC, PBS Coals Ltd. and a positive FX gain of $199 million. Excluding these non-cash items, Severstal would have posted a net profit of $206 million (Q1 2014: net profit of $221 million excluding non-cash items);
- Excellent progress against strategic focus of enhancing free cash flow which increased a substantial 105.9% q/q to $486 million (Q1 2014: $236 million);
- Capex of $211 million1, 20.1% lower q/q (Q1 2014: $264 million) reflecting our flexible approach to investments as well as the completion of the Balakovo Mini-Mill project;
- Recommended dividend payment of 2.14 roubles per share (approximately $0.06) for the 6 months ended 30 June 2014.
- H1 2014 revenue was 7.1% lower y/y at $6,260 million (H1 2013: $6,736 million) as Russian Steel and Resources divisions experienced lower realized prices and sales volumes;
- EBITDA increased 25.4% y/y to $1,140 million (H1 2013: $909 million) driven by an ongoing focus on operational enhancements, improved performance at Severstal International and lower raw materials input costs at our steel operations;
- H1 2014 net loss2 was $761 million (H1 2013: Breakeven) includes expected non-cash losses preliminary estimated at $1,066 million on the disposals5 of Severstal Dearborn LLC, Severstal Columbus LLC, PBS Coals Ltd. and a negative FX loss of $121 million (H1 2013: FX loss of $241 million). Excluding these non-cash items, Severstal would have posted a net profit of $426 million (H1 2013: $241 million);
- Strong improvement in free cash flow to $722 million (H1 2013: $133 million), in line with strategic focus;
- Capex3 of $475 million, 15.5% lower y/y (H1 2013: $562 million), representing 48.7% share of 2014 target capex of $976 million.
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