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(Alliance News) - Evraz PLC on Thursday reported swelling interim profits as it benefitted from the recovery on the global steel market as prices continued to ascend.
The London-based steel maker posted a pretax profit of USD1.63 billion in the six months to June 30, more than double the USD700 million seen a year prior.
Rising profits were driven by a global steel market which rebounded in the second half of 2020, with growth accelerating in the first half of this year. Cost-cutting initiatives also helped bolster the bottom line.
First half revenue grew 24% to USD6.18 billion from USD4.98 billion a year previously. The revenue rise was partly attributed to higher steel, vanadium and coal product sales prices.
Evraz produces steel, iron, vanadium and coal from its operations in Russia, North America, and Eastern Europe.
"Activity in steel-consuming industries continued returning to pre-pandemic levels, driving steel prices and demand," Evraz Chief Executive Alexander Frolov commented.
Evraz continues to progress on the demerger of its coal business, it noted, with all assets now sitting under PJSC Raspadskaya and completion of the restructure envisaged by December.
Looking ahead, Evraz did caution that its full-year results would be impacted heavily by changing commodity prices. The company warned that steel prices look "unsustainable at current levels" and that there is a possibility of a gradual price decline in the coming months due to an expected drop in domestic demand from China.
However, despite commodity market uncertainty, the mining giant was upbeat on its outlook: "In the second half of 2021, we expect global markets to remain fairly healthy, despite a possible correction in steel prices."
Evraz declared an interim dividend of USD0.55 per share, significantly up on the USD0.20 per share paid at the same point in 2020.
Shares were trading up 0.2% at 611.00 pence each in London on Thursday morning.
In a separate announcement, Evraz said its board has approved the construction of a new vanadium slag processing plant at the Uzlovaya special economic zone, in Russia's Tula region.
The plant will target increased cost efficiencies at all stages of the processing chain from slag to final product. Investment in the project is expected to reach around USD228 million, with the launch of the plant scheduled for 2025, Evraz notes.
By Will Paige; willpaige@alliancenews.com
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