23 Jul 2013 07:00
Severstal reports Q2 2013 and H1 2013 operational results
Moscow, Russia - July 23, 2013 - OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q2 2013 and H1 2013.
Q2 GROUP HIGHLIGHTS
● Crude steel production increased 5% q/q to 4.0 mln tonnes (Q1 2013: 3.8 mln tonnes)
● Steel-making assets at the Russian Steel Division (RSD) and Severstal North America Division (SNA) ran at close to full capacity
● Consolidated sales of steel products increased 5% despite the challenging economic environment
● The share of high value-added products in the sales portfolio remained high at 45%
● Q/q prices for key steel products at RSD were broadly flat or slightly decreased; prices for SNA's rolled products decreased by 3%. Prices for coking coal concentrate mirrored market trends and decreased by 3% at Vorkutaugol, while prices for iron ore pellets increased by 1% despite the challenging pricing environment for key iron ore products.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
Production, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Crude steel (Total output): | 4 031 970 | 3 835 016 | 5 % | 7 866 987 | 7 793 000 | 1 % |
Russian Steel (RSD) | 2 747 533 | 2 658 148 | 3 % | 5 405 682 | 5 357 861 | 1 % |
Severstal North America (SNA) | 1 284 437 | 1 176 868 | 9 % | 2 461 305 | 2 435 139 | 1 % |
Hot metal (total output): | 2 693 714 | 2 631 297 | 2 % | 5 325 011 | 5 217 255 | 2 % |
Russian Steel | 2 183 345 | 2 142 408 | 2 % | 4 325 753 | 4 264 900 | 1 % |
North America | 510 369 | 488 889 | 4 % | 999 258 | 952 355 | 5 % |
Sales volumes, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Coking coal concentrate | 1 787 747 | 1 826 920 | (2) % | 3 614 667 | 3 612 073 | 0 % |
Iron ore pellets | 2 678 099 | 2 460 285 | 9 % | 5 138 384 | 5 112 287 | 1 % |
Iron ore concentrate | 1 219 871 | 1 053 035 | 16 % | 2 272 905 | 2 356 461 | (4) % |
Total steel products (Consolidated) | 3 882 296 | 3 682 416 | 5 % | 7 564 712 | 7 527 981 | 0 % |
Total steel products (Russian Steel) | 2 749 078 | 2 637 901 | 4 % | 5 386 979 | 5 214 253 | 3 % |
Total steel products (SNA) | 1 170 085 | 1 112 716 | 5 % | 2 282 801 | 2 416 734 | (6) % |
Average price, $/tonne | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Coking coal concentrate, Vorkutaugol | 113 | 117 | (3) % | 115 | 153 | (25) % |
Iron ore pellets, Karelsky Okatysh | 112 | 110 | 1 % | 111 | 119 | (7) % |
Hot-rolled coil and plate (RSD) | 560 | 566 | (1) % | 563 | 641 | (12) % |
Rolled products (SNA) | 787 | 808 | (3) % | 798 | 867 | (8) % |
SEVERSTAL RESOURCES
● Iron ore products saw strong demand from both the Cherepovets Steel Mill and external customers. Iron ore pellets sales to external buyers increased 10% in Q2 against Q1 when iron ore sales were affected by logistical issues and seasonal factors
● Coking coal concentrate production remained strong in Q2 while the division saw lower sales at PBS Coals
● Sales of coking coal concentrate to external customers decreased at Vorkutaugol by 18% in Q2 as a result of stronger demand from the Cherepovets Steel Mill following the launch of the fully-modernized coke battery #7 in April 2013
● With the completion of the first modernization phase of the Pechorskaya Preparation Mill at Vorkutaugol by the end of 2013, the recycling of run-of-mine coal in 2013 is expected to grow by 35% to approximately 9.5 million tonnes
● Prices for iron ore pellets increased by 1% in Q2 despite the challenging pricing environment for iron ore products. Vorkutaugol's coking coal concentrate price decreased by 3% after global coal price benchmarks touched a two year low in Q2 2013.
Sales volumes, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Coal: | 2 483 643 | 2 618 400 | (5) % | 5 102 043 | 5 033 938 | 1 % |
Coking coal concentrate, including: | 1 787 747 | 1 826 920 | (2) % | 3 614 667 | 3 612 073 | 0 % |
Vorkutaugol | 1 351 937 | 1 335 369 | 1 % | 2 687 305 | 2 372 808 | 13 % |
PBS Coals | 435 810 | 491 552 | (11) % | 927 362 | 1 239 265 | (25) % |
Raw coking coal, Vorkutaugol | 178 829 | 145 677 | 23 % | 324 506 | 329 182 | (1) % |
Steam coal, including: | 517 067 | 645 803 | (20) % | 1 162 870 | 1 092 684 | 6 % |
Vorkutaugol | 471 319 | 617 766 | (24) % | 1 089 085 | 1 082 605 | 1 % |
PBS Coals | 45 749 | 28 037 | 63 % | 73 785 | 10 078 | n.a. |
Iron ore: | 3 897 970 | 3 513 320 | 11 % | 7 411 289 | 7 468 748 | (1) % |
Iron ore pellets | 2 678 099 | 2 460 285 | 9 % | 5 138 384 | 5 112 287 | 1 % |
Iron ore concentrate | 1 219 871 | 1 053 035 | 16 % | 2 272 905 | 2 356 461 | (4) % |
Sales price, $/tonne | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Coking coal concentrate, Vorkutaugol | 113 | 117 | (3) % | 115 | 153 | (25) % |
Coking coal concentrate, PBS Coals | 109 | 116 | (6) % | 113 | 143 | (21) % |
Raw coking coal, Vorkutaugol | 53 | 52 | 3 % | 52 | 73 | (28) % |
Steam coal, Vorkutaugol | 38 | 40 | (3) % | 39 | 38 | 2 % |
Steam coal, PBS Coals | 46 | 58 | (20) % | 50 | 93 | (46) % |
Iron ore pellets | 112 | 110 | 1 % | 111 | 119 | (7) % |
Iron ore concentrate | 79 | 80 | (1) % | 80 | 86 | (8) % |
SEVERSTAL RUSSIAN STEEL
● Severstal Russian Steel increased sales of steel products in Q2 by 4.2 % q/q to 2.8 mt, largely driven by strong sales of galvanized products, color coated products and hot-rolled plates, while sales of semi-finished products decreased by 19%
● Sales growth of long products (33% q/q) and color coated coils (21% q/q) was primarily driven by seasonal demand from the construction sector and partially due to destocking
● With the exception of semi-finished products and color coated coils, average sale prices remained broadly flat or decreased slightly q/q. Prices for most steel products continued to grow in April with good growth in demand but then decreased in the second half of May and June following the correction in key raw material (coking coal and iron ore) prices.
Sales volumes, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Total steel products | 2 749 078 | 2 637 901 | 4 % | 5 386 979 | 5 214 253 | 3 % |
Semi-finished products | 148 172 | 183 680 | (19) % | 331 852 | 680 507 | (51) % |
Rolled products: | 2 107 777 | 2 008 469 | 5 % | 4 116 246 | 3 653 518 | 13 % |
Hot-rolled coil | 1 114 056 | 1 149 994 | (3) % | 2 264 050 | 2 020 341 | 12 % |
Hot-rolled plate | 137 491 | 102 736 | 34 % | 240 227 | 245 030 | (2) % |
Cold-rolled coil | 326 963 | 335 269 | (2) % | 662 231 | 595 858 | 11 % |
Galvanised and metallic coated coil | 156 895 | 131 112 | 20 % | 288 007 | 282 512 | 2 % |
Color coated coil | 118 606 | 97 855 | 21 % | 216 460 | 159 481 | 36 % |
Long products | 253 767 | 191 503 | 33 % | 445 271 | 350 297 | 27 % |
Downstream products: | 493 128 | 445 752 | 10 % | 938 880 | 880 228 | 7 % |
Metalware products | 223 561 | 200 749 | 9 % | 424 309 | 416 463 | 2 % |
Large diameter pipes | 82 942 | 82 577 | 0 % | 165 519 | 161 941 | 2 % |
Other tubes, pipes, formed shapes | 186 626 | 162 427 | 15 % | 349 052 | 301 824 | 16 % |
Sales price, $/tonne | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Semi-finished products | 490 | 429 | 14 % | 456 | 534 | (15) % |
Hot-rolled coil and plate | 560 | 566 | (1) % | 563 | 641 | (12) % |
Cold-rolled coil | 628 | 628 | (0) % | 628 | 742 | (15) % |
Galvanised and metallic coated coil | 843 | 860 | (2) % | 851 | 973 | (13) % |
Color coated coil | 1 100 | 1 044 | 5 % | 1 074 | 1 195 | (10) % |
Long products | 595 | 617 | (3) % | 604 | 672 | (10) % |
Metalware products | 1 075 | 1 133 | (3) % | 1 103 | 1 177 | (6) % |
Large diameter pipes | 1 511 | 1 600 | (6) % | 1 555 | 1 796 | (13) % |
Other tubes, pipes, formed shapes | 695 | 718 | (3) % | 706 | 781 | (10) % |
SEVERSTAL NORTH AMERICA
● Severstal International significantly increased its sales q/q with steel-making facilities running almost at full capacity
● Hot-rolled product sales increased 5% in Q2, with high value-added products comprising 44% of the sales portfolio (Q1 2013: 46%)
● Prices for key steel products decreased in the second half of Q2 following the correction in global steel prices: this deceleration primarily impacted hot-rolled products while average prices for cold-rolled and galvanized products remained flat q/q
Sales volumes, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Rolled products: | 1 170 068 | 1 112 612 | 5 % | 2 282 680 | 2 416 449 | (6) % |
Hot-rolled coil and plate | 656 574 | 599 031 | 10 % | 1 255 605 | 1 349 994 | (7) % |
Cold-rolled coil | 130 374 | 141 325 | (8) % | 271 699 | 284 278 | (4) % |
Galvanised and metallic coated coil | 383 121 | 372 256 | 3 % | 755 377 | 782 178 | (3) % |
Sales price, $/tonne | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Rolled products | 787 | 808 | (3) % | 798 | 867 | (8) % |
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, tonnes | Q2 2013 | Q1 2013 | Change, % | H1 2013 | H1 2012 | Change, % |
Coal: | 1 544 942 | 1 830 637 | (16) % | 3 375 579 | 3 400 302 | (1) % |
Coking coal concentrate | 849 046 | 1 039 157 | (18) % | 1 888 203 | 1 978 437 | (5) % |
Raw coking coal | 178 829 | 145 677 | 23 % | 324 506 | 329 182 | (1) % |
Steam coal | 517 067 | 645 803 | (20) % | 1 162 870 | 1 092 684 | 6 % |
Iron ore: | 1 598 359 | 1 412 719 | 13 % | 3 011 077 | 2 784 370 | 8 % |
Iron ore pellets | 1 555 857 | 1 412 719 | 10 % | 2 968 575 | 2 784 370 | 7 % |
Semi-finished products | 117 703 | 123 668 | (5) % | 241 371 | 641 448 | (62) % |
Rolled products: | 3 273 262 | 3 113 952 | 5 % | 6 387 215 | 6 008 899 | 6 % |
Hot-rolled coil | 1 770 340 | 1 745 825 | 1 % | 3 516 166 | 3 314 310 | 6 % |
Hot-rolled plate | 137 392 | 102 736 | 34 % | 240 127 | 244 972 | (2) % |
Cold-rolled coil | 457 336 | 476 593 | (4) % | 933 930 | 880 136 | 6 % |
Galvanised and metallic coated coil | 540 015 | 503 368 | 7 % | 1 043 383 | 1 064 689 | (2) % |
Color coated coil | 118 606 | 97 855 | 21 % | 216 460 | 159 481 | 36 % |
Long products | 249 573 | 187 575 | 33 % | 437 148 | 345 312 | 27 % |
Downstream products: | 491 331 | 444 796 | 9 % | 936 126 | 877 633 | 7 % |
Metalware products | 223 347 | 200 434 | 9 % | 423 780 | 415 327 | 2 % |
Large diameter pipes | 81 628 | 81 936 | (0) % | 163 564 | 160 482 | 2 % |
Other tubes, pipes, formed shapes | 186 356 | 162 427 | 15 % | 348 782 | 301 824 | 16 % |
Notes |
1) All production data is reported in metric tonnes;
2) Segmental data includes intercompany sales;
3) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;
4) Metalware sales volumes and metalware average selling prices include Severstal Metiz, Cherepovets Steel Mill, Severstallat and Severstal Invest data
5) Large diameter pipes include all pipes with a diameter in the range between 820 and 1420 mm.
Contacts |
Investor Relations
Vladimir Zaluzhsky
T: +7 (495) 926-77-66 ext. 6375
vladimir.zaluzhsky@severstal.com
Public Relations
Elena Kovaleva
T: +7 (495) 926-77-66 ext. 6447
elena.kovaleva@severstal.com
Severstal's financial communications agent - Hudson Sandler
Andrew Hayes / Maria Ignatova / Alex Brennan
T: +44 (0) 20 7796 4133
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ОАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, the USA, Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $14,104 million and EBITDA of $2,149 million in 2012. Severstal's crude steel production in 2012 reached 15.1 million tonnes. www.severstal.com