Moscow, Russia - 25 October, 2016 - PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading steel and steel-related mining companies, today announces its Q3 and 9M 2016 financial results for the period ended 30 September 2016.

High margins underpinning strong results

Q3 2016 vs. Q2 2016 ANALYSIS:

  • Group revenue remained almost flat, increasing 0.5% q/q to $1,588 million (Q2 2016: $1,580 million). This reflects a substantial rise in average selling prices for steel products and raw materials which was partly offset by lower sales volumes at both the Russian Steel and Resources divisions due to demand softening in the domestic market and planned stock replenishment;
  • Group EBITDA increased 11.0% q/q to $584 million (Q2 2016: $526 million) driven by lower operating costs and stable topline. Group EBITDA margin increased by a significant 3.5 ppts q/q to 36.8% (Q2 2016: 33.3%) and continues to be one of the highest in the industry;
  • Net profit of $429 million (Q2 2016: net profit of $608 million) includes a FX gain of $31 million, non-current assets impairment of $16 million and a loss on disposal of property, plant and equipment of $35 million in relation to fixed assets of Severnaya mine. Adjusting for these non-cash items, Severstal would have posted an underlying net profit of $449 million (Q2 2016: net profit of $427 million excluding FX gain);
  • Global steel prices started to rise in Q2, and this, alongside an increase in net working capital (on the back of a build-up of steel inventories) enabled the Company to continue generating positive free cash flow. Free cash flow decreased marginally 5.6% q/q to $323 million (Q2 2016: $342 million). Free cash flow remains one of the key strategic priorities for the Company;
  • Cash capex of $122 million increased 4.3% q/q (Q2 2016: $117 million). Severstal's FY 2016 capex target is RUB 43 billion, subject to FX fluctuations;
  • Recommended dividend payment of 24.96 RUB per share for the three months ended 30 September 2016.

The full version of the release

OAO Severstal published this content on 25 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 October 2016 06:17:09 UTC.

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