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Severstal reports Q1 2017 operational results

13 Apr 2017 07:11

RNS Number : 4191C
Public Joint Stock Co. Severstal
13 April 2017
 

 

Severstal reports Q1 2017 operational results

 

Moscow, Russia - 13 April 2017 - PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrat--ed steel and steel-related mining companies, today announces its operational results for Q1 2017.

 

Q1 2017 GROUP HIGHLIGHTS

 

· Hot metal output remained largely unchanged, decreasing only 1% to 2.34 mln tonnes (Q4 2016: 2.36 mln tonnes) compared with the previous quarter.

 

· Crude steel production declined 2% to 2.86 mln tonnes (Q4 2016: 2.92 mln tonnes). Crude steel output at CherMK was impacted by planned maintenance works at converters #2 and #3.

 

· Consolidated steel product sales declined 9% q/q to 2.53 mln tonnes compared with the previous quarter (Q4 2016: 2.78 mln tonnes). During Q1 2017, following record sales volumes achieved in previous quarter, the Company replenished inventories to normal levels and accumulated finished good stocks for subsequent realisation during 2017 as well as increased export sales in response to weaker domestic demand and lower activity from local traders.

 

· The proximity of key assets to the border also enabled the Company to shift sales to export, accordingly steel product export sales volumes grew to 42% (Q4 2016: 38%) of the sales mix.

 

· Following the refurbishment of the four-stand cold rolling mill at CherMK and the increase in production volumes, cold-rolled coil sales volumes continued to increase, and were up 14% q/q, following the increase of 15% q/q achieved in Q4 2016.

 

· Increased cold-rolled, large diameter pipes and colour-coated sales led to the share of high value-added (HVA) products within the sales portfolio increasing to 44% (Q4 2016: 40%).

 

· Supply disruptions in Australia boosted spot hard coking coal prices at the beginning of April 2017, after tropical cyclone Debbie led to closures of the main railway lines. Industry experts estimate it will take up to five weeks before normal operations are restored. Meanwhile the seaborne HCC market is experiencing a shortage thus boosting the spot price of coking coal. Whilst iron ore prices were supported by significant restocking in Q1 2017 they are now softening as port inventories have reached high levels.

 

SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA

Production, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Crude steel (Russian Steel)

2,863,947

2,924,374

(2%)

2,863,947

2,908,314

(2%)

Hot metal (Russian Steel)

2,341,719

2,358,181

(1%)

2,341,719

2,354,256

(1%)

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Coking coal concentrate

710,622

800,462

(11%)

710,622

1,360,081

(48%)

Iron ore pellets

2,579,417

2,792,900

(8%)

2,579,417

2,407,186

7%

Iron ore concentrate

802,939

922,169

(13%)

802,939

937,772

(14%)

Total steel products (Consolidated)

2,530,181

2,782,004

(9%)

2,530,181

2,448,043

3%

Total steel products (Russian Steel)

2,540,351

2,793,364

(9%)

2,540,351

2,461,741

3%

 

High value added steel products, %

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Severstal (Consolidated)

44%

40%

4 ppts

44%

42%

2 ppts

Severstal Russian Steel

44%

40%

4 ppts

44%

42%

2 ppts

 

 

 

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Coal:

473,233

556,228

(15%)

473,233

1,180,594

(60%)

Coking coal concentrate

7,677

80,684

(90%)

7,677

462,770

(98%)

Steam coal

465,556

475,544

(2%)

465,556

717,824

(35%)

Iron ore:

1,341,387

1,545,101

(13%)

1,341,387

1,154,261

16%

Iron ore pellets

1,341,387

1,545,101

(13%)

1,341,387

1,154,261

16%

Semi-finished products

117,042

260,979

(55%)

117,042

131,402

(11%)

Rolled products:

2,006,200

2,084,938

(4%)

2,006,200

1,848,992

9%

Hot-rolled coil

984,077

1,055,917

(7%)

984,077

966,480

2%

Hot-rolled plate

193,298

189,772

2%

193,298

163,548

18%

Cold-rolled coil

320,186

281,572

14%

320,186

203,972

57%

Galvanised and metallic coated coil

117,517

122,532

(4%)

117,517

117,941

0%

Colour coated coil

84,404

79,592

6%

84,404

82,362

2%

Long products

306,718

355,553

(14%)

306,718

314,689

(3%)

Downstream products:

406,939

436,087

(7%)

406,939

467,649

(13%)

Metalware products

144,429

150,479

(4%)

144,429

147,338

(2%)

Large diameter pipes

68,367

63,280

8%

68,367

113,165

(40%)

Other tubes, pipes, formed shapes

194,143

222,328

(13%)

194,143

207,146

(6%)

 

 

SEVERSTAL RESOURCES

· In Q1 2017 coking coal concentrate sales volumes from Vorkutaugol remained in decline, down 11% q/q to 0.71 mln tonnes (Q4 2016: 0.80 mln tonnes) impacted by scheduled long-wall repositionings at the Vorkutinskaya and Komsomolskaya mines. As anticipated, internal coking coal concentrate procurement decreased 2% and external sales volumes decreased by 90% reflecting the low base effect q/q.

 

· Steam coal sales at Vorkutaugol decreased by a marginal 2% q/q and remained relatively high in response to stronger demand from domestic consumers during the heating season.

 

· Iron ore concentrate sales volumes declined 13% q/q to 0.80 mln tonnes (Q4 2016: 0.92 mln tonnes) mainly impacted by planned maintenance works.

 

· Iron ore pellet sales decreased 8% and totaled 2.58 mln tonnes (Q4 2016: 2.79 mln tonnes). Iron ore pellet sales volumes were impacted by seasonal factors.

 

 

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

 

Coal:

1,176,178

1,276,353

(8%)

1,176,178

2,077,905

(43%)

Coking coal concentrate

710,622

800,462

(11%)

710,622

1,360,081

(48%)

Steam coal

465,556

475,891

(2%)

465,556

717,824

(35%)

Iron ore:

3,382,356

3,715,069

(9%)

3,382,356

3,344,958

1%

Iron ore pellets

2,579,417

2,792,900

(8%)

2,579,417

2,407,186

7%

Iron ore concentrate

802,939

922,169

(13%)

802,939

937,772

(14%)

 

SEVERSTAL RUSSIAN STEEL ('RSD')

 

· RSD steel product sales declined 9% q/q to 2.54 mln tonnes due to the fact that during Q1 2017, after record sales volumes achieved in previous quarter, the Company replenished inventories to normal levels and accumulated finished good stocks for subsequent realisation during 2017 as well as increased export sales in response to weaker domestic demand and lower activity from local traders.

 

· This resulted in a decline in domestic deliveries within the sales-mix to 58% in Q1 2017 (Q4 2016: 62%).

 

· The share of HVA products within the sales mix improved to 44% (Q4 2016: 40%) fueled by cold-rolled, large diameter pipes and colour-coated sales growth.

 

· Cold-rolled coil sales improved further, by 14% q/q, following completion of the refurbishment of the four-stand cold rolling mill at CherMK in 2016. Moreover colour-coated coil seasonal stock was previously created in Q4 which resulted in a 6% sales increase q/q.

 

· Large diameter pipe (LDP) sales volumes increased 8% q/q driven by higher LDP sales from Izhora Pipe Mill for Gazprom projects. Meanwhile, Izhora Pipe Mill remains in full utilisation and continues to supply LDPs to Gazprom, Transneft and other customers.

 

· Average selling prices for all steel products increased between 8% and 21% q/q, depending on the specific product, reflecting an upward adjustment in global steel prices, driven by high raw material benchmarks during Q1 2017.

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Total steel products

2,540,351

2,793,364

(9%)

2,540,351

2,461,741

3%

Semi-finished products

117,042

260,979

(55%)

117,042

131,402

(11%)

Rolled products:

2,016,107

2,095,316

(4%)

2,016,107

1,861,119

8%

Hot-rolled coil

984,350

1,055,969

(7%)

984,350

966,772

2%

Hot-rolled plate

193,491

189,775

2%

193,491

163,703

18%

Cold-rolled coil

320,186

281,572

14%

320,186

203,972

57%

Galvanised and metallic coated coil

117,517

122,531

(4%)

117,517

117,941

0%

Colour coated coil

84,404

79,592

6%

84,404

82,362

2%

Long products

316,159

365,877

(14%)

316,159

326,369

(3%)

Downstream products:

407,202

437,069

(7%)

407,202

469,220

(13%)

Metalware products

144,511

150,856

(4%)

144,511

148,060

(2%)

Large diameter pipes

68,367

63,280

8%

68,367

113,800

(40%)

Other tubes, pipes, formed shapes

194,324

222,933

(13%)

194,324

207,360

(6%)

 

Sales price, $/tonne

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Semi-finished products

374

318

18%

374

224

67%

Hot-rolled coil

481

423

14%

481

255

89%

Hot-rolled plate

569

512

11%

569

354

61%

Cold-rolled coil

602

518

16%

602

365

65%

Galvanised and metallic coated coil

708

637

11%

708

440

61%

Colour coated coil

908

831

9%

908

589

54%

Long products

435

391

11%

435

239

82%

Metalware products

899

835

8%

899

643

40%

Large diameter pipes

1,443

1,192

21%

1,443

1,054

37%

Other tubes, pipes, formed shapes

570

478

19%

570

361

58%

Notes

 

1) All production data is reported in metric tonnes;

2) Sales prices are stated on EXW basis;

3) Segmental data includes intercompany sales;

4) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;

5) Metalware sales volumes and metalware average selling prices include Severstal Metiz, Severstal Distribution LLC and AO Severstal Distribution data;

6) Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.

Contacts

 

Investor Relations

Evgeny Belov

T: +7 (495) 926-77-66 ext. 6445

evgenii.belov@severstal.com

Vladimir Zaluzhsky

T: +7 (495) 926-77-66 ext. 6375

vladimir.zaluzhsky@severstal.com

 

Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66 ext. 6457

anastasia.mishanina@severstal.com

 

Severstal's financial communications agent - Hudson Sandler

Andrew Hayes / Elena Garside / Alex Brennan

T: +44 (0) 20 7796 4133

***

 

PАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, Ukraine, Latvia, Italy and Poland. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $5,916 million and EBITDA of $1,911 million in 2016. Severstal's crude steel production in 2016 reached 11.6 million tonnes www.severstal.com

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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