21 Jan 2021 07:01
PAO Severstal (SVST) Severstal reports Q4 & FY2020 operational results 21-Jan-2021 / 10:00 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 & FY2020 operational results
Moscow, Russia - 21 January 2021 - PAO Severstal (MOEX: 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 FY2020.
Q4 2020 GROUP HIGHLIGHTS Hot metal output remained flat q/q in Q4 2020 at 2.40 mln tonnes (Q3 2020: 2.40 mln tonnes). Crude steel production declined by 4% to 2.77 mln tonnes (Q3 2020: 2.89 mln tonnes) due to planned short-term maintenance works at BOF#2.Consolidated sales of steel products declined 18% q/q to 2.45 mln tonnes in Q4 2020 (Q3 2020: 2.99 mln tonnes), reflecting the high base effect on sales volumes of Q3 2020, along with a higher share of exports with a longer realisation period in the sales mix, and a decline in production q/q.The Company's share of domestic steel shipments was 65% (Q3 2020: 63%). In Q4 2020 Severstal increased its exports share of semi-finished and hot rolled products. The share of high value-added (HVA) products within the sales portfolio increased to 53% (Q3 2020: 49%). Sales volumes of coking coal concentrate from Vorkutaugol increased 3% q/q to 1.26 mln tonnes as a result of 1ZH concentrate output growth q/q. Sales volumes of iron ore pellets increased by 8% to 2.83 mln tonnes (Q3 2020: 2.61 mln tonnes) on the back of growth in iron ore pellet production at Karelsky Okatysh q/q. Sales volumes of iron ore concentrate declined by 11% to 1.74 mln tonnes (Q3 2020: 1.96 mln tonnes), primarily driven by higher output at the Yakovlevskiy mine, which was offset by lower production at Karelsky Okatysh due to seasonal factors and increased pellet sales. The weighted average steel selling price of Severstal's product mix rose by 8% q/q in Q4 2020. Severstal anticipates that the positive momentum in steel and raw material prices observed in November and December 2020 will positively impact Q1 2021 results. FY2020 GROUP HIGHLIGHTS Output of hot metal increased 1% y/y in FY2020 to 9.54 mln tonnes (FY2019: 9.49 mln tonnes). Production of crude steel and steel sales volumes both declined 4% y/y due to lower production volumes of EAF steel following the sale of the Balakovo mini-mill in 2019. The share of HVA products increased y/y to 47% in 2020. The share of domestic shipments in 2020 amounted to 60%, which is lower than 2019 levels (FY2019: 65%). This is the result of a deceleration in the domestic demand in 2020 and the sale of the Balakovo mini-mill, which primarily served domestic markets. The weighted average steel selling price for 2020 declined by 12%, as a result of adverse pricing dynamics globally y/y. Iron ore concentrate sales volumes grew 13% y/y to 7.07 mln tonnes (FY2019: 6.26 mln tonnes) driven by output growth at Karelsky Okatysh and the Yakovlevskiy mine y/y. Coking coal concentrate sales volumes from Vorkutaugol increased 1% y/y. SUMMARY OF KEY PRODUCTION, SALES VOLUMES
* Total steel products sales volumes (Consolidated) have been adjusted by 17 kt for 9M 2020 ** Total steel products sales volumes (Russian Steel) have been adjusted by 17 kt for 9M 2020
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
* Hot - rolled coil sales volumes are adjusted by 17 kt for 9M 2020
SEVERSTAL RESOURCES Sales volumes of coking coal concentrate from Vorkutaugol increased 3% q/q to 1.26 mln tonnes as a result of higher output of 1Zh concentrate q/q. Run of mine coal production at Vorkutaugol decreased by 5% in Q4 2020 vs Q3 2020. Sales volumes of iron ore pellets increased by 8% to 2.83 mln tonnes (Q3 2020: 2.61 mln tonnes) on the back of growth in iron ore pellet production at Karelsky Okatysh q/q. Sales volumes of iron ore concentrate declined by 11% to 1.74 mln tonnes (Q3 2020: 1.96 mln tonnes), primarily driven by higher output at the Yakovlevskiy mine, which was offset by lower production at Karelsky Okatysh due to seasonal factors and increased pellet sales.
SEVERSTAL RUSSIAN STEEL ('RSD') RSD sales of steel products declined 18% q/q to 2.46 mln tonnes in Q4 2020 (Q3 2020: 3.00 mln tonnes) reflecting the high base effect in sales volumes of Q3 2020, a higher share of exports with a longer realisation period and production decline q/q. The Company's share of domestic steel shipments amounted to 65% (Q3 2020: 63%). In Q4 2020 Severstal increased its export share of semi-finished and hot rolled products. The share of high value-added (HVA) products within the sales portfolio increased to 53% (Q3 2020: 49%). Severstal increased sales volumes of HVA metalware products by 10% in Q4 2020, which resulted in lower sales volumes of long products q/q. LDP sales volumes totalled 59,000 tonnes in Q4 2020 at the Izhora Pipe Mill (ITZ). In response to a contraction in domestic demand, the Company reallocated a portion of its sales volumes to export destinations in H2 2020. Severstal expects partial normalisation of oil and gas demand in 2021 and anticipates a recovery in LDP sales volumes to approximately ~400.000 tonnes. The weighted average selling price for the whole range of steel products in Q4 2020 continued to rise, growing by 8% q/q following an increase of 2% in the previous quarter. This is the result of positive steel pricing dynamics at export destinations and a higher share of HVA products in the sales mix q/q. Severstal anticipates that the positive momentum in steel and raw material prices observed in November and December 2020 will positively impact Q1 2021 results.
* Hot - rolled coil sales volumes are adjusted by 17 kt for 9M 2020
Q4, H2 & FY 2020 ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE) HIGHLIGHTS Severstal is focused on improving working conditions for our employees and reducing the number of health and safety incidents for the long-term. The main challenges we faced in 2020 were COVID-19, and the management of contractor safety. We had a higher number of contractors present on site during the year to work on our major investment projects, and unfortunately some of these did not adhere to Severstal's high safety standards. In 2020, the LTIFR* increased by 7% to 0.65 (FY2019: 0.61), which is 12% below our 2020 target. The total number of incidents rose to 59 in 2020, from 55 in 2019. Tragically, there were ten fatal incidents in H2 2020, including one member of our staff and nine contractors. Of those, six contractors died following two group incidents which took place during demolition works at decommissioned sites. We have made detailed investigations into each of these cases and taken valuable learning from each to ensure that similar incidents do not take place in the future.
At Severstal Russian Steel, total emissions of air pollutants decreased by 7% in 2020 to 259,000 tonnes (FY2019: 277,500 tonnes). This reduction is primarily linked to the introduction of combined blowing at converters and the reduced working hours of sintering machines without the bed layer, following the completion of maintenance works, in addition to the sale of Balakovo mini-mill in 2019. The emissions intensity of air pollutants per tonne of steel products declined by 2% to 22.6 kg per tonne of steel in 2020 (FY2019: 23.2 kg per tonne). At Severstal Resources, total emissions of air pollutants fell by 12% in 2020 to 187,600 tonnes (FY2019: 213,600 tonnes). This decrease primarily reflects lower emissions levels at Vorkutaugol, due to the higher utilisation rate of methane 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. Methane is regarded as an air pollutant under Russian regulations. ***Minor changes in data for 2019 took place due to a review of methodology and scope of emissions measurement at Karelsky Okatysh and Olcon and the emissions intensity calculation per tonne of liquid steel, instead of crude steel **** Steel production at Cherepovets Steel Mill and Balakovo mini-mill (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 MOEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $8,157 million and EBITDA of $2,805 million in 2019. Severstal's crude steel production in 2020 reached 11.3 million tonnes. www.severstal.com
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| ISIN: | US8181503025 |
| Category Code: | FR |
| TIDM: | SVST |
| LEI Code: | 213800OKDPTV6K4ONO53 |
| Sequence No.: | 91923 |
| EQS News ID: | 1162144 |
| End of Announcement | EQS News Service |
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