15 Apr 2014 07:00
Severstal reports Q1 2014 operational results
Moscow, Russia - April 15, 2014 - 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 Q1 2014.
Q1 2014 GROUP HIGHLIGHTS
● Production of crude steel increased 4% q/q driven by production growth at the Russian Steel Division ("RSD").
● Steel product sales at RSD were down by 8% against increased sales in Q4 2013, although export sales advanced moderately in Q1 2014. Steel product sales at Severstal North America ("SNA") also increased by 1% q/q.
● The pricing environment was challenging; coking coal concentrate at Vorkuta and high value added ("HVA") products at RSD were impacted the most, while SNA saw a favorable 1% q/q increase in prices for rolled products.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
Production, tonnes | Q1 2014 | Q4 2013 | Change | Q1 2014 | Q1 2013 | Change | |||
Crude steel (Total output): | 3 932 664 | 3 780 391 | 4 % | 3 932 664 | 3 835 016 | 3 % | |||
Russian Steel (RSD) | 2 713 759 | 2 508 594 | 8 % | 2 713 759 | 2 658 148 | 2 % | |||
Severstal North America (SNA) | 1 218 904 | 1 271 797 | (4) % | 1 218 904 | 1 176 868 | 4 % | |||
Hot metal (total output): | 2 697 370 | 2 681 536 | 1 % | 2 697 370 | 2 631 297 | 3 % | |||
Russian Steel | 2 246 364 | 2 182 400 | 3 % | 2 246 364 | 2 142 408 | 5 % | |||
North America | 451 006 | 499 136 | (10) % | 451 006 | 488 889 | (8) % | |||
Sales volumes, tonnes | Q1 2014 | Q4 2013 | Change | Q1 2014 | Q1 2013 | Change | |||
Coking coal concentrate | 1 391 490 | 1 721 259 | (19) % | 1 391 490 | 1 826 920 | (24) % | |||
Iron ore pellets | 2 582 560 | 2 805 851 | (8) % | 2 582 560 | 2 460 285 | 5 % | |||
Iron ore concentrate | 1 099 297 | 1 109 515 | (1) % | 1 099 297 | 1 053 035 | 4 % | |||
Total steel products (Consolidated) | 3 588 180 | 3 833 134 | (6) % | 3 588 180 | 3 682 416 | (3) % | |||
Total steel products (Russian Steel) | 2 453 932 | 2 674 258 | (8) % | 2 453 932 | 2 637 901 | (7) % | |||
Total steel products (SNA) | 1 182 755 | 1 172 137 | 1 % | 1 182 755 | 1 112 716 | 6 % | |||
Average price, $/tonne | Q1 2014 | Q4 2013 | Change | Q1 2014 | Q1 2013 | Change | |||
Coking coal concentrate, Vorkutaugol | 96 | 102 | (6) % | 96 | 117 | (18) % | |||
Iron ore pellets, Karelsky Okatysh | 107 | 108 | (1) % | 107 | 110 | (3) % | |||
Hot-rolled coil (RSD) | 469 | 495 | (5) % | 469 | 534 | (12) % | |||
Rolled products (SNA) | 835 | 829 | 1 % | 835 | 808 | 3 % | |||
High value added steel products, % | Q1 2014 | Q4 2013 | Change | Q1 2014 | Q1 2013 | Change | |||
Severstal (Consolidated) | 47% | 48% | (1) ppts | 47% | 46% | 1 ppts | |||
Severstal Russian Steel | 47% | 48% | (1) ppts | 47% | 45% | 2 ppts | |||
Severstal North America | 46% | 48% | (2) ppts | 46% | 46% | 0 ppts | |||
SEVERSTAL RESOURCES
● Iron ore pellet sales volumes decreased 8% q/q against extremely high sales volumes in Q4 2013. A decrease in iron ore concentrate sales to external customers was offset by a higher demand from Cherepovets Steel Mill.
● Coking coal concentrate sales volumes at Vorkutaugol were down 16% due to lower production volumes (particularly at the Zapolyarnaya mine) which were affected by a rearrangement of the long walls in Q1 2014. The Vorkutinskaya preparation plant was also temporally idled due to decreased production volumes.
● Sales of raw coking coal at Vorkutaugol continued to decrease due to redirection of the volumes to Pechorskaya preparation plant which was modernized in H2 2013. Sales of coking coal concentrate at PBS Coals decelerated due to weaker export demand. Some volumes of coking coal concentrate supplied from PBS Coals in March will be reflected in April's data.
● Prices of iron ore pellets were resilient, with only 1% decrease q/q while prices of iron ore concentrate decreased 8% q/q. Prices for coking coal concentrate at Vorkuta were down by 6% q/q, reflecting global trends for iron ore and hard coking coal prices.
Sales volumes, tonnes | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % |
Coal: | 1 869 528 | 2 344 612 | (20) % | 1 869 528 | 2 618 400 | (29) % |
Coking coal concentrate, including: | 1 391 490 | 1 721 259 | (19) % | 1 391 490 | 1 826 920 | (24) % |
Vorkutaugol | 1 192 711 | 1 419 670 | (16) % | 1 192 711 | 1 335 369 | (11) % |
PBS Coals | 198 779 | 301 590 | (34) % | 198 779 | 491 552 | (60) % |
Raw coking coal, Vorkutaugol | 32 032 | 42 221 | (24) % | 32 032 | 145 677 | (78) % |
Steam coal, including: | 446 006 | 581 132 | (23) % | 446 006 | 645 803 | (31) % |
Vorkutaugol | 432 783 | 570 084 | (24) % | 432 783 | 617 766 | (30) % |
PBS Coals | 13 223 | 11 048 | 20 % | 13 223 | 28 037 | (53) % |
Iron ore: | 3 681 857 | 3 915 366 | (6) % | 3 681 857 | 3 513 320 | 5 % |
Iron ore pellets | 2 582 560 | 2 805 851 | (8) % | 2 582 560 | 2 460 285 | 5 % |
Iron ore concentrate | 1 099 297 | 1 109 515 | (1) % | 1 099 297 | 1 053 035 | 4 % |
Sales price, $/tonne | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change,% |
Coking coal concentrate, Vorkutaugol | 96 | 102 | (6) % | 96 | 117 | (18) % |
Coking coal concentrate, PBS Coals | 111 | 107 | 4 % | 111 | 116 | (4) % |
Raw coking coal, Vorkutaugol | 57 | 54 | 5 % | 57 | 52 | 10 % |
Steam coal, Vorkutaugol | 36 | 38 | (6) % | 36 | 40 | (10) % |
Steam coal, PBS Coals | 78 | 72 | 9 % | 78 | 58 | 35 % |
Iron ore pellets | 107 | 108 | (1) % | 107 | 110 | (3) % |
Iron ore concentrate | 70 | 77 | (8) % | 70 | 80 | (12) % |
SEVERSTAL RUSSIAN STEEL
● Q1 2014 steel products sales down by 8% q/q as the division was building its internal stock to normal levels after divesting inventories during the temporary idling of #2 converter at the Cherepovets Steel Mill in Q4 13
● Severstal Russian Steel ("RSD") recorded a 35% increase in sales volumes of semi-finished products due to increased export demand; sales of long products increased by 6%, driven by strong seasonal demand.
● Sales of polymer-coated products decreased by 34% against very strong sales in Q4 2013; polymer coating facilities were running at almost full capacity in Q1 2014 which facilitated an increase in volumes ahead of seasonal demand.
● Following a 62% q/q increase in Q4 2013, sales of large diameter pipes decreased q/q by 23%.
● Average prices for steel products at RSD decreased q/q with the most significant decline for color-coated products (11%), long products (12%) and large diameter pipes (11%). Nevertheless, prices for March and April deliveries were higher than prices for January and February. In Q1 2014, the Cherepovets Steel Mill announced several ruble price increases for domestic customers, which will partly be reflected in average prices in Q2 2014.
Sales volumes, tonnes | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % | |
Total steel products | 2 453 932 | 2 674 258 | (8) % | 2 453 932 | 2 637 901 | (7) % | |
Semi-finished products | 119 604 | 88 372 | 35 % | 119 604 | 183 680 | (35) % | |
Rolled products: | 1 937 075 | 2 141 583 | (10) % | 1 937 075 | 2 051 057 | (6) % | |
Hot-rolled coil | 944 129 | 1 077 780 | (12) % | 944 129 | 1 085 276 | (13) % | |
Hot-rolled plate | 230 355 | 207 037 | 11 % | 230 355 | 189 368 | 22 % | |
Cold-rolled coil | 335 082 | 367 784 | (9) % | 335 082 | 353 875 | (5) % | |
Galvanised and metallic coated coil | 119 716 | 153 830 | (22) % | 119 716 | 132 477 | (10) % | |
Color coated coil | 77 867 | 117 340 | (34) % | 77 867 | 98 558 | (21) % | |
Long products | 229 926 | 217 813 | 6 % | 229 926 | 191 503 | 20 % | |
Downstream products: | 397 253 | 444 303 | (11) % | 397 253 | 403 164 | (1) % | |
Metalware products | 145 813 | 156 824 | (7) % | 145 813 | 157 525 | (7) % | |
Large diameter pipes | 75 844 | 98 453 | (23) % | 75 844 | 82 577 | (8) % | |
Other tubes, pipes, formed shapes | 175 596 | 189 027 | (7) % | 175 596 | 163 062 | 8 % | |
Sales price, $/tonne | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % |
Semi-finished products | 423 | 458 | (8) % | 423 | 429 | (1) % |
Hot-rolled coil | 469 | 495 | (5) % | 469 | 534 | (12) % |
Hot-rolled plate | 741 | 753 | (1) % | 741 | 767 | (3) % |
Cold-rolled coil | 579 | 599 | (3) % | 579 | 639 | (9) % |
Galvanised and metallic coated coil | 741 | 792 | (7) % | 741 | 859 | (14) % |
Color coated coil | 909 | 1 025 | (11) % | 909 | 1 044 | (13) % |
Long products | 490 | 557 | (12) % | 490 | 617 | (21) % |
Metalware products | 1 099 | 1 147 | (4) % | 1 099 | 1 237 | (11) % |
Large diameter pipes | 1 564 | 1 756 | (11) % | 1 564 | 1 600 | (2) % |
Other tubes, pipes, formed shapes | 626 | 671 | (7) % | 626 | 718 | (13) % |
SEVERSTAL NORTH AMERICA
● Severstal North America increased q/q rolled steel products sales by 1% to q/q 1.2 mt.
● Crude steel production at Dearborn decreased 8% q/q as a result of severe weather conditions in Q1 2014 which also spurred an increase in natural gas prices.
● The share of HVA products in the sales portfolio decreased slightly from 48% to 46%.
● The prices for most of steel products remained mostly flat with prices for hot-rolled coils posting the highest increase q/q.
Sales volumes, tonnes | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % |
Rolled products: | 1 182 755 | 1 172 137 | 1 % | 1 182 755 | 1 112 612 | 6 % |
Hot-rolled coil and plate | 638 170 | 608 160 | 5 % | 638 170 | 599 031 | 7 % |
Cold-rolled coil | 144 829 | 146 937 | (1) % | 144 829 | 141 325 | 2 % |
Galvanised and metallic coated coil | 399 756 | 417 040 | (4) % | 399 756 | 372 256 | 7 % |
Sales price, $/tonne | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % | |
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Rolled products | 835 | 829 | 1 % | 835 | 808 | 3 % |
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SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, tonnes | Q1 2014 | Q4 2013 | Change, % | Q1 2014 | Q1 2013 | Change, % | |
Coal: | 949 485 | 1 380 363 | (31) % | 949 485 | 1 830 637 | (48) % | |
Coking coal concentrate | 471 448 | 757 010 | (38) % | 471 448 | 1 039 157 | (55) % | |
Raw coking coal | 32 032 | 42 221 | (24) % | 32 032 | 145 677 | (78) % | |
Steam coal | 446 006 | 581 132 | (23) % | 446 006 | 645 803 | (31) % | |
Iron ore: | 1 528 347 | 1 823 355 | (16) % | 1 528 347 | 1 412 719 | 8 % | |
Iron ore pellets | 1 483 140 | 1 721 655 | (14) % | 1 483 140 | 1 412 719 | 5 % | |
Iron ore concentrate | 45 207 | 101 700 | (56) % | 45 207 | - | - | |
Semi-finished products | 89 633 | 88 372 | 1 % | 89 633 | 123 668 | (28) % | |
Rolled products: | 3 102 659 | 3 300 927 | (6) % | 3 102 659 | 3 156 540 | (2) % | |
Hot-rolled coil | 1 569 216 | 1 676 764 | (6) % | 1 569 216 | 1 681 107 | (7) % | |
Hot-rolled plate | 230 245 | 206 983 | 11 % | 230 245 | 189 368 | 22 % | |
Cold-rolled coil | 479 911 | 514 719 | (7) % | 479 911 | 495 200 | (3) % | |
Galvanised and metallic coated coil | 519 471 | 570 868 | (9) % | 519 471 | 504 733 | 3 % | |
Color coated coil | 77 867 | 117 340 | (34) % | 77 867 | 98 558 | (21) % | |
Long products | 225 949 | 214 253 | 5 % | 225 949 | 187 575 | 20 % | |
Downstream products: | 395 889 | 443 835 | (11) % | 395 889 | 402 208 | (2) % | |
Metalware products | 145 398 | 156 513 | (7) % | 145 398 | 157 210 | (8) % | |
Large diameter pipes | 75 213 | 98 453 | (24) % | 75 213 | 81 936 | (8) % | |
Other tubes, pipes, formed shapes | 175 277 | 188 869 | (7) % | 175 277 | 163 062 | 7 % | |
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, Cherepovets Steel Mill, Severstallat and Severstal Invest data;
6) Large diameter pipes include all pipes with a diameter between 820 and 1420 mm;
7) Group and RSD volumes and average selling prices for Q4 2013 and Q1 2013 were restated due to a change in recognised revenues, based on a re- classification of products
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 $13,312 million and EBITDA of $2,063 million in 2013. Severstal's crude steel production in 2013 reached 15.7 million tonnes. www.severstal.com