17 Jan 2020 07:04
PAO Severstal (SVST) Severstal reports Q4 & FY2019 operational results 17-Jan-2020 / 10:04 MSK Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
Severstal reports Q4 & FY2019 operational results Moscow, Russia - 17 January 2020 - PAO 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 Q4 and FY2019. Q4 2019 GROUP HIGHLIGHTS Hot metal output declined 4% q/q in Q4 2019 to 2.36 mln tonnes (Q3 2019: 2.46 mln tonnes) due to short-term maintenance works at blast furnace facilities in Q4 2019. Crude steel production declined 10% to 2.71 mln tonnes (Q3 2019: 3.03 mln tonnes) affected by short-term maintenance works at the BOF and EAF facilities and lower EAF production in Q4 2019 following the sale of the Balakovo mini-mill in the previous quarter.Consolidated steel product sales declined 6% q/q to 2.65 mln tonnes in Q4 2019 (Q3 2019: 2.83 mln tonnes). The Company increased the share of steel export shipments to 41% (Q3 2019: 33%) responding to a seasonal slowdown in domestic demand. The share of high value-added (HVA) products within the sales portfolio remained at 45% (Q3 2019: 45%), supported by higher sales of hot rolled thick plate and cold rolled coil products and declining volumes of long and hot rolled coil sales. Coking coal concentrate sales volumes from Vorkutaugol declined 1% q/q due to a decrease in run-of-mine production q/q. Iron ore pellet sales grew 14% to 2.81 mln tonnes (Q3 2019: 2.46 mln tonnes) reflecting higher production of pellets at Karelsky Okatysh. Iron ore concentrate sales volumes declined 17% to 1.60 mln tonnes (Q3 2019: 1.93 mln tonnes) driven by a decline in iron ore volumes at Karelsky Okatysh.
FY2019 GROUP HIGHLIGHTS Hot metal output increased 4% y/y to 9.49 mln tonnes in 2019 (FY2018: 9.15 mln tonnes) driven by improved efficiency arising from maintenance works and higher quality raw materials. Crude steel production in 2019 declined 2% to 11.85 mln tonnes (FY2018: 12.04 mln tonnes), as higher aggregate productivity levels were offset by lower EAF production in H2 2019 following the sale of the Balakovo mini-mill.Coking coal concentrate sales volumes from Vorkutaugol surged 38% y/y, as a result of planned production growth. Iron ore concentrate sales volumes increased 14% y/y to 6.26 mln tonnes (FY2018: 5.51 mln tonnes) predominantly reflecting production volumes growth at Karelsky Okatysh and the Yakovlevskiy mine. The share of HVA products remained high at 45% in FY2019 (FY2018: 46%), reflecting higher sales of thick plate, as well as galvanised and colour-coated products following the launch of new product lines, which reached full utilisation in the beginning of 2019. In 2019 the share of domestic shipments reached 65% (FY2018: 61%) due to more attractive pricing in the Russian market. SUMMARY OF KEY PRODUCTION, SALES VOLUMES
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
SEVERSTAL RESOURCES Coking coal concentrate sales volumes from Vorkutaugol declined 1% q/q reflecting a decrease in run-of-mine production q/q. Iron ore pellet sales grew 14% to 2.81 mln tonnes (Q3 2019: 2.46 mln tonnes) reflecting higher production of pellets at Karelsky Okatysh. Iron ore concentrate sales volumes declined 17% to 1.60 mln tonnes (Q3 2019: 1.93 mln tonnes) driven by a decline in iron ore concentrate volumes at Karelsky Okatysh.
SEVERSTAL RUSSIAN STEEL ('RSD') RSD steel product sales declined 6% q/q to 2.66 mln tonnes in Q4 2019 (Q3 2019: 2.85 mln tonnes).The Company increased the share of steel export shipments to 41% (Q3 2019: 33%) as a result of domestic demand seasonal slowdown. The share of high value-added (HVA) products within the sales portfolio remained at 45% (Q3 2019: 45%), supported by higher sales of hot rolled thick plate and cold rolled coil products and declining long and hot rolled coil sales volumes. LDP sales volumes declined 20% q/q, reflecting changes in the product mix, at the same time sales volumes of thick plate increased 4% q/q. Meanwhile Izhora Pipe Mill maintained its 100% utilisation rate in Q4 2019. The weighted average selling price for the whole range of rolled steel products declined in Q4 2019 following global benchmarks and a seasonal slowdown in local demand.
Q4, H2 & FY 2019 ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE) HIGHLIGHTS The health and safety of all our employees and contractors is an absolute priority for Severstal as we remain committed to reaching zero fatalities across all our operations. The LTIFR for FY 2019 stood at 0.61, decreasing by 36% y/y (FY2018: 0.95), surpassing our set target of 0.84 for 2019 by 27%. The total number of incidents in 2019 decreased to 55 from 81 in 2018. Tragically, there were three fatal incidents in H2 2019 including two members of our staff and one contractor. We are investigating each of these cases in detail and taking preventative measures to ensure that similar incidents do not take place in the future. The overall level of employee engagement in safety issues has increased in 2019; this is confirmed by the results of our Accident Prevention System (APS) audits, which demonstrate that both Russian Steel and Severstal Metiz exceeded their set targets, achieving engagement levels of 3.9 and 2.8 out of 5 respectively. Vorkutaugol also met its target engagement level of 3.0.
At Severstal Russian Steel, the total emissions of air pollutants decreased by 8% in 2019 to 277,492 tonnes (2018: 301,695 tonnes). The level of emissions of air pollutants per tonne of steel products was reduced by 7% to 23.4 kg per tonne of steel in 2019 (2018: 25.1 kg per tonne), due to decreased consumption intensity of coke fines while sintering following reconstruction of solid fuel preparation unit at Sinter plant 3. The overall reduction in total emissions is also related to the sale of Mini-Mill Balakovo in 2019 and its inclusion into the calculations scope for H1 2019 only (leading to 8,300 tonnes reduction in pollutants). At Severstal Resources, the total emissions of air pollutants fell by 3% in 2019 to 213,291 tonnes (2018: 220,016 tonnes). This decrease primarily reflects reduced emissions levels at Vorkutaugol due to higher volumes of methane utilised at the mines' boiler units.
Notes to this section:
* LTIFR refers to Lost Time Injury Frequency Rate of Severstal staff, the number of lost time injuries occurring in a workplace per 1 million hours worked. ** Emissions data is calculated in accordance with Russian regulations and is reported to the relevant Russian authorities on an annual basis and reviewed by them. ***Minor changes in data for H1 2018 took place due to a review of methodology and scope of emissions measurement at Karelsky Okatysh and Olcon. **** Steel production at Cherepovets Steel Mill and Severstal Long Product Mill Balakovo (the latter for Jan - Jul 2019)
1) Sales prices are stated on EXW basis; 2) Segmental data includes intercompany sales; 3) Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings; 4) Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.
Investor Relations Evgeny Belov T: +7 (495) 926-77-66 ext. 6445 evgenii.belov@severstal.com
Public Relations Anastasia Mishanina T: +7 (495) 926-77-66 ext. 6457 anastasia.mishanina@severstal.com
Severstal's financial communications agency - Hudson Sandler Andrew Leach / Emily Dillon 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, Latvia and Poland. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $8,580 million and EBITDA of $3,142 million in 2018. Severstal's crude steel production in 2019 reached 11.8 million tonnes. www.severstal.com
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| ISIN: | US8181503025 |
| Category Code: | TST |
| TIDM: | SVST |
| LEI Code: | 213800OKDPTV6K4ONO53 |
| Sequence No.: | 41140 |
| EQS News ID: | 955703 |
| End of Announcement | EQS News Service |
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