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PAO Severstal (SVST)
Severstal announces 2019 capital investment programme
04-Feb-2019 / 12:07 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 announces 2019 capital investment programme
4 February 2019, Moscow - PAO Severstal ("Severstal"; "the Company"), one of
the world's leading vertically integrated steel and steel-related mining
companies, today announces its capital investment programme for 2019.
In like with previous announcements, Severstal plans to invest approximately
95.7 billion rubles in 2019, focusing on the key areas of the Company's
updated strategy disclosed during its Capital Markets Day in November 2018 -
superior client experience, cost leadership and embracing new opportunities
- and aimed at further strengthening its financial performance, maximising
value creation and enhancing shareholder returns.
Severstal Russian Steel
Severstal will invest approximately 64.8 billion rubles into its Russian
Steel division in 2019, of which 48.6 billion rubles will be committed to
development projects.
The most significant projects in 2019 will be the construction of the new
Blast Furnace #3 (expected to be launched in 2021), the Coking Battery #11
(to be launched in 2022 to replace batteries #8 and #9) and the flat steel
production development programme aimed at improving the Company's product
mix. Cutting-edge technology will allow the Company to produce more
high-value added and innovative products and solutions, improve customer
care and reduce its environmental impact.
Severstal Russian Steel will invest 16.2 billion rubles in maintenance,
environmental and health and safety projects in 2019.
Severstal Resources
Severstal will invest approximately 30.9 billion rubles in its Resources
division in 2019, of which 18.9 billion rubles will be invested in asset
development.
One of the main investment areas within Severstal Resources is development
of Yakovlevskiy mine which will receive investment of 8.3 billion rubles in
2019. This will allow the Company to upgrade its production capacity to 5 m
tonnes.
Among other significant projects are construction of a conveyor for
run-of-mine transportation at Tsentralniy pit, redesign of the boiler-house
aimed at switching from oil to peat fuel, increasing pellet quality by
introducing lime hydrate at Karelskiy Okatysh etc. Besides, the company will
continue investing in restoring volumes at Vorkutaugol.
Severstal will continue to focus on safety and ecology in 2019 and boost its
investments in these areas. The Company plans to invest a further 1.1
billion rubles into safety improvement measures (almost half of which will
be invested into health and safety initiatives - including digital systems -
at Vorkutaugol), and an additional 827 million rubles in environmental
projects.
The Company will commit 5.7 billion rubles of investment capital to digital
and IT projects focused on at further improving operational excellence and
enhancing product quality and customer service.
Alexey Kulichenko, CFO of Severstal, commented:
"As a global efficiency leader with a strong track record of delivering
progress, we are now striving for further growth, and can see many growth
opportunities. Therefore, most of our capital investment programme (around
75%) will fund development projects focused on achieving a significant cost
advantage in basic steel products, improvements to our product-mix and
services and growth in both mining and steel volumes. At the same time, we
remain committed to our "smart capex" approach, which requires a minimum of
20% IRR for every investment project. In order to maximise investor value,
Severstal will be using "Adjusted FCF" for the dividend calculation during
the intensive stage of the investment programme, which will return to
historical levels after 2022. Any capex which exceeds the base-line level of
$800m will not be taken into consideration when determining the level of
dividend payout".
The planned investments are preliminary estimates and amounts are subject to
adjustments dependent on FX changes. The majority of the Company's
expenditure in 2019 will be in rubles.
For further information, please contact:
Investor Relations
Evgeny Belov
T: +7 (495) 926-77-66
evgenii.belov@severstal.com
Public Relations
Anastasia Mishanina
T: +7 (495) 926-77-66
anastasia.mishanina@severstal.com
***
P?? 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 $7,848 million and EBITDA of $2,577
million in 2017. Severstal's crude steel production in 2018 reached 12.0
million tonnes. www.severstal.com [1]
ISIN: US8181503025
Category Code: UPD
TIDM: SVST
LEI Code: 213800OKDPTV6K4ONO53
Sequence No.: 7343
EQS News ID: 772091
End of Announcement EQS News Service
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(END) Dow Jones Newswires
February 04, 2019 04:08 ET (09:08 GMT)
