DJ Severstal reports Q3 & 9M 2020 operational results
PAO Severstal (SVST)
Severstal reports Q3 & 9M 2020 operational results
09-Oct-2020 / 09:02 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 Q3 & 9M 2020 operational results
Moscow, Russia - 9 October 2020 - 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 Q3 & 9M 2020.
Q3 2020 GROUP HIGHLIGHTS
- Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2
2020: 2.33 mln tonnes) following the completion of maintenance works at
blast furnace facilities in the previous quarter. Crude steel production
increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported
by growth in hot metal output.
- Consolidated sales of steel products increased 18% q/q to 3.01 mln
tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth,
a lower share of export shipments with a longer realisation period vs the
previous quarter and finished goods stock reduction.
- The Company increased its share of domestic steel shipments to 63% (Q2
2020: 56%) in response to a demand recovery in Russia in Q3 2020.
- The share of high value-added (HVA) products within the sales portfolio
amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA
products, and the Company reduced HVA finished goods stock levels q/q.
- Sales volumes of coking coal concentrate from Vorkutaugol declined 5%
q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower
run-of-mine (ROM-rate) at the Zapolyarnaya mine.
- Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2
2020: 2.53 mln tonnes) on the back of iron ore pellet production growth
and inventory sell-off q/q.
- Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2
2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky
Okatysh and Olcon.
9M 2020 GROUP HIGHLIGHTS
- Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M
2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln
tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF
steel following the disposal of Balakovo mini-mill in July 2019.
- The share of HVA products remained stable y/y at 45% in 9M 2020. The
share of domestic shipments in 2020 was 58%, which is lower than in 2019
(9M 2019: 67%). This is a result of a deceleration in domestic demand in
2020 after achieving peak levels in the previous year and the disposal of
the Balakovo mini-mill, which primarily served domestic markets.
- The average steel selling prices for 9M 2020 declined from 10% to 19%
across the product range, as a result of adverse pricing dynamics of
global benchmarks y/y.
- Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M
2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the
Yakovlevskiy mine y/y. The Company expects to achieve total production of
around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020.
- Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES
Production, Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, %
thousands of
tonnes
Crude Steel 2,890 2,807 3% 8,547 9,133 (6%)
(Russian
Steel)
Hot metal 2,402 2,331 3% 7,143 7,125 0%
(Russian
Steel)
Sales Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, %
volumes,
thousands of
tonnes
Coking coal 1,218 1,276 (5%) 3,445 3,340 3%
concentrate
Iron ore 2,613 2,532 3% 8,112 8,192 (1%)
pellets
Iron ore 1,960 1,904 3% 5,333 4,660 14%
concentrate
Total steel 3,006 2,551 18% 8,306 8,503 (2%)
products
(Consolidate
d)
Total steel 3,020 2,561 18% 8,340 8,538 (2%)
products
(Russian
Steel)
High value Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, %
added steel
products, %
Severstal 49% 43% 6 ppts 45% 45% (0 ppts)
(Consolidate
d)
Severstal 49% 43% 6 ppts 45% 45% (0 ppts)
Russian
Steel
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, Q3 2020 Q2 Change, % 9M 2020 9M Change,
thousands of 2020 2019 %
tonnes
Coal: 344 370 (7%) 1,101 1,250 (12%)
Coking coal 46 104 (56%) 215 331 (35%)
concentrate
Steam coal 298 266 12% 886 919 (4%)
Iron ore: 1,358 1,511 (10%) 4,530 4,785 (5%)
Iron ore 1,355 1,461 (7%) 4,343 4,170 4%
pellets
Iron ore 3 50 (94%) 187 615 (70%)
concentrate
Semi-finished 97 100 (3%) 389 279 39%
products
Rolled 2,383 2,084 14% 6,637 6,916 (4%)
products:
Hot - rolled 1,267 1,179 7% 3,643 3,310 10%
coil
Hot - rolled 244 219 11% 715 702 2%
plate
Cold - rolled 253 198 28% 661 743 (11%)
coil
Galvanised and 286 196 46% 701 729 (4%)
metallic coated
coil
Colour coated 162 113 43% 373 365 2%
coil
Long products 171 179 (4%) 544 1,067 (49%)
Downstream 526 367 43% 1,280 1,308 (2%)
products:
Metalware 145 135 7% 426 413 3%
products
Large diameter 85 25 n/a 129 303 (57%)
pipes
Other tubes, 296 207 43% 725 592 22%
pipes, formed
shapes
SEVERSTAL RESOURCES
? Sales volumes of coking coal concentrate from Vorkutaugol declined 5%
q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower
run-of-mine (ROM-rate) at the Zapolyarnaya mine.
? ROM coal production at Vorkutaugol decreased by 7% in Q3 2020 vs Q2
2020.
? Iron ore pellet sales increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53
mln tonnes) as a result of higher production levels of iron ore pellets
and inventory sell-off q/q.
? Iron ore concentrate sales volumes grew by 3% to 1.96 mln tonnes (Q2
2020: 1.90 mln tonnes) mainly driven by higher output at Karelsky Okatysh
and Olcon.
Sales Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, %
volumes,
thousands
tonnes
Coal: 1,516 1,542 (2%) 4,331 4,260 2%
Coking coal 1,218 1,276 (5%) 3,445 3,340 3%
concentrate
Steam coal 298 266 12% 886 920 (4%)
Iron ore: 4,573 4,436 3% 13,445 12,852 5%
Iron ore 2,613 2,532 3% 8,112 8,192 (1%)
pellets
Iron ore 1,960 1,904 3% 5,333 4,660 14%
concentrate
SEVERSTAL RUSSIAN STEEL ('RSD')
? RSD steel product sales of steel products increased 18% q/q to 3.02 mln
tonnes in Q3 2020 (Q2 2020: 2.56 mln tonnes) reflecting production growth,
a lower share of export shipments with a longer realisation period vs the
previous quarter and finished goods stock reduction.
? The Company increased its share of domestic steel shipments to 63% (Q2
2020: 56%) in response to demand recovery in Russia in Q3 2020.
? The share of high value-added (HVA) products within the sales portfolio
amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA
products, and the Company reduced HVA finished goods stock levels q/q.
? LDP sales volumes increased to 85,000 tonnes in Q3 2020, due to reduced
stock levels 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 Q3 2020.
? The weighted average selling price for the whole range of steel products
in Q3 2020 increased by 2%, due to positive steel pricing dynamics at
export destinations and a higher share of HVA products in the sales mix
q/q. Severstal successfully maintained higher average selling prices
throughout the period, as a result of its customer-focused approach, the
flexibility of its distribution channels and the high proportion of HVA
products within its portfolio.
Sales volumes, Q3 2020 Q2 Change, % 9M 2020 9M Change,
thousands of 2020 2019 %
tonnes
Total steel 3,020 2,561 18% 8,340 8,538 (2%)
products
Semi-finished 98 100 (2%) 390 279 40%
products
Rolled 2,395 2,093 14% 6,667 6,949 (4%)
products:
Hot - rolled 1,268 1,178 8% 3,644 3,311 10%
coil
Hot - rolled 244 219 11% 715 703 2%
plate
Cold - rolled 253 198 28% 661 743 (11%)
coil
Galvanised and 286 196 46% 701 729 (4%)
metallic coated
coil
Colour coated 162 113 43% 373 365 2%
coil
Long products 182 189 (4%) 573 1,098 (48%)
Downstream 527 368 43% 1,283 1,310 (2%)
products:
Metalware 147 135 9% 429 416 3%
products
Large diameter 85 25 n/a 129 303 (57%)
pipes
Other tubes, 295 208 42% 725 591 23%
pipes, formed
shapes
Sales price, Q3 2020 Q2 Change, % 9M 2020 9M Change,
$/tonne 2020 2019 %
Semi-finished 376 388 (3%) 385 427 (10%)
products
Hot - rolled 416 417 0% 423 506 (16%)
coil
Hot-rolled 517 545 (5%) 558 660 (15%)
plate
Cold - rolled 504 528 (5%) 536 621 (14%)
coil
Galvanised and 639 643 (1%) 638 724 (12%)
metallic coated
coil
(MORE TO FOLLOW) Dow Jones Newswires
October 09, 2020 02:02 ET (06:02 GMT)
