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)
DJ Severstal reports Q3 & 9M 2020 operational results -2-
Colour coated 797 790 1% 789 894 (12%)
coil
Long products 411 417 (1%) 419 476 (12%)
Metalware 832 837 (1%) 852 965 (12%)
products
Large diameter 825 778 6% 811 996 (19%)
pipes
Other tubes, 480 477 1% 492 578 (15%)
pipes, formed
shapes
Sales price, Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, %
$/tonne
Weighted 510 500 2% 510 602 (15%)
average
steel
selling
price
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 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 2019 reached 11.8 million
tonnes. www.severstal.com [1]
ISIN: US8181503025
Category Code: TST
TIDM: SVST
LEI Code: 213800OKDPTV6K4ONO53
Sequence No.: 85657
EQS News ID: 1139893
End of Announcement EQS News Service
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(END) Dow Jones Newswires
October 09, 2020 02:02 ET (06:02 GMT)
