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(Alliance News) - Russian steel maker Evraz PLC on Monday said first half adjusted pretax profit fell year-on-year on a drop in commodity sales and prices in the face of the Covid-19 pandemic, but reported pretax profit was up slightly on the absence of impairment charges and a lower interest expense.
For the six months to June 30, the London-headquartered company recorded pretax profit of USD700 million, up 1.4% from USD690 million a year ago.
Earnings before interest, tax, depreciation and amortisation - the company's preferred profit measure - amounted to USD1.07 billion for the period, down 28% from USD1.48 billion a year ago, driving Ebitda margin down to 21.5% from 24.1%.
First half revenue fell 19% to USD4.98 billion from USD6.14 billion, primarily due to lower sales prices for construction, coal products, and lower flat-rolled sales volumes, as well as reduced prices and volumes for vanadium products.
Revenue from the Steel segment, focused on Russia, dropped by 18% to USD3.43 billion, while revenue from the Steel North America segment fell by 22% to USD1.03 billion. The Coal segment's revenue declined by 31% to USD781 million.
Total capital expenditure increased 9% in the first half to USD337 million from USD309 million.
Chief Executive Officer Alexander Frolov, said: "The first half of 2020 was dominated by the global fight against the Covid-19 pandemic. The restrictive measures imposed by the governments of various countries have had a significant impact on the level of consumption of steel products around the world. Prices have reflected this situation, dropping sharply in comparison with the first half of 2019.
"In H2, Evraz will aim to sustain production at full capacity and maximise sales volumes in Russia. We will focus on additional efficiency improvements and maintain balanced and selective approach to our investment projects."
Shares in the FTSE 100-listed company were down 1.7% at 316.60 pence each in London on Thrusday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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