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
Production, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
thousands of
tonnes
Crude Steel 2,714 3,032 (10%) 11,847 12,039 (2%)
(Russian
Steel)
Hot metal 2,361 2,458 (4%) 9,486 9,146 4%
(Russian
Steel)
Sales volumes, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
thousands of
tonnes
Coking coal 1,331 1,351 (1%) 4,671 3,374 38%
concentrate
Iron ore 2,810 2,461 14% 11,002 10,997 0%
pellets
Iron ore 1,595 1,931 (17%) 6,255 5,510 14%
concentrate
Total steel 2,651 2,834 (6%) 11,154 11,176 0%
products
(Consolidated)
Total steel 2,663 2,847 (6%) 11,201 11,220 0%
products
(Russian
Steel)
High value added Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
steel products,
%
Severstal 45% 45% 0 ppts 45% 46% (1 ppts)
(Consolidated)
Severstal 45% 45% 0 ppts 45% 46% (1 ppts)
Russian Steel
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
thousands of
tonnes
Coal: 435 330 32% 1,685 1,671 1%
Coking coal 77 66 17% 408 359 14%
concentrate
Steam coal 358 264 36% 1,277 1,312 (3%)
Iron ore: 2,175 1,443 51% 6,960 7,405 (6%)
Iron ore pellets 1,825 1,380 32% 5,995 6,578 (9%)
Iron ore 350 63 n/a 965 827 17%
concentrate
Semi-finished 208 89 134% 487 695 (30%)
products
Rolled products: 2,016 2,292 (12%) 8,932 8,719 2%
Hot - rolled 1,072 1,168 (8%) 4,382 3,895 13%
coil
Hot - rolled 255 244 5% 957 852 12%
plate
Cold - rolled 234 226 4% 977 1,286 (24%)
coil
Galvanised and 205 238 (14%) 934 835 12%
metallic coated
coil
Colour coated 83 122 (32%) 448 391 15%
coil
Long products 167 294 (43%) 1,234 1,460 (15%)
Downstream 427 453 (6%) 1,735 1,762 (2%)
products:
Metalware 150 147 2% 563 560 1%
products
Large diameter 80 100 (20%) 383 440 (13%)
pipes
Other tubes, 197 206 (4%) 789 762 4%
pipes, formed
shapes
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.
Sales volumes, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
thousands
tonnes
Coal: 1,688 1,616 4% 5,948 4,686 27%
Coking coal 1,331 1,351 (1%) 4,671 3,374 38%
concentrate
Steam coal 357 265 35% 1,277 1,312 (3%)
Iron ore: 4,405 4,392 0% 17,257 16,507 5%
Iron ore 2,810 2,461 14% 11,002 10,997 0%
pellets
Iron ore 1,595 1,931 (17%) 6,255 5,510 14%
concentrate
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.
Sales volumes, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
thousands of
tonnes
Total steel 2,663 2,847 (6%) 11,201 11,220 0%
products
Semi-finished 207 89 133% 486 695 (30%)
products
Rolled 2,028 2,305 (12%) 8,977 8,760 2%
products:
Hot - rolled 1,071 1,169 (8%) 4,382 3,896 12%
coil
Hot - rolled 254 245 4% 957 852 12%
plate
Cold - rolled 234 226 4% 977 1,286 (24%)
coil
Galvanised and 205 238 (14%) 934 835 12%
metallic
coated coil
Colour coated 83 122 (32%) 448 391 15%
coil
Long products 181 305 (41%) 1,279 1,500 (15%)
Downstream 428 453 (6%) 1,738 1,765 (2%)
products:
Metalware 150 148 1% 566 562 1%
products
Large diameter 80 100 (20%) 383 440 (13%)
pipes
Other tubes, 198 205 (3%) 789 763 3%
pipes, formed
shapes
Sales price, Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
$/tonne
Semi-finished 362 414 (13%) 399 463 (14%)
products
Hot - rolled 443 510 (13%) 491 553 (11%)
coil
Hot-rolled plate 655 683 (4%) 658 708 (7%)
Cold - rolled 611 647 (6%) 618 623 (1%)
coil
Galvanised and 680 733 (7%) 714 753 (5%)
metallic coated
coil
Colour coated 847 905 (6%) 886 932 (5%)
coil
Long products 425 498 (15%) 469 483 (3%)
Metalware 935 965 (3%) 957 967 (1%)
products
Large diameter 931 945 (1%) 982 1,083 (9%)
pipes
Other tubes, 527 580 (9%) 565 599 (6%)
pipes, formed
shapes
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.
Health and Safety Q4 2019 Q3 2019 Change, % 2019 2018 Change, %
LTIFR* 0.60 0.45 33% 0.61 0.95 (36%)
· 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.
Environment** Q4 2019 Q3 2019 Change, % 2019 2018*** Change, %
Atmospheric 61.8 73.2 (16%) 277.5 301.7 (8%)
emission of
pollutants,
thousand
tonnes
(Russian
Steel)
Atmospheric 54.4 58.7 (7%) 213.3 220.0 (3%)
emission of
pollutants,
thousand
tonnes
(Severstal
Resources)
Specific 23.8 24.2 (2%) 23.4 25.1 (7%)
atmospheric
emission of
pollutants, kg
per tonne of
steel****
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)
Notes:
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.
Contacts
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
***
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 $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 [1]
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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January 17, 2020 02:04 ET (07:04 GMT)
