DJ Severstal reports Q4 & FY2020 operational results
PAO Severstal (SVST)
Severstal reports Q4 & FY2020 operational results
21-Jan-2021 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
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The issuer is solely responsible for the content of this announcement.
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Severstal reports Q4 & FY2020 operational results
Moscow, Russia - 21 January 2021 - 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 Q4 and FY2020.
Q4 2020 GROUP HIGHLIGHTS
- Hot metal output remained flat q/q in Q4 2020 at 2.40 mln tonnes (Q3 2020: 2.40 mln tonnes). Crude steel production
declined by 4% to 2.77 mln tonnes (Q3 2020: 2.89 mln tonnes) due to planned short-term maintenance works at BOF#2.
- Consolidated sales of steel products declined 18% q/q to 2.45 mln tonnes in Q4 2020 (Q3 2020: 2.99 mln tonnes),
reflecting the high base effect on sales volumes of Q3 2020, along with a higher share of exports with a longer
realisation period in the sales mix, and a decline in production q/q.
- The Company's share of domestic steel shipments was 65% (Q3 2020: 63%). In Q4 2020 Severstal increased its exports
share of semi-finished and hot rolled products.
- The share of high value-added (HVA) products within the sales portfolio increased to 53% (Q3 2020: 49%).
- Sales volumes of coking coal concentrate from Vorkutaugol increased 3% q/q to 1.26 mln tonnes as a result of 1ZH
concentrate output growth q/q.
- Sales volumes of iron ore pellets increased by 8% to 2.83 mln tonnes (Q3 2020: 2.61 mln tonnes) on the back of
growth in iron ore pellet production at Karelsky Okatysh q/q.
- Sales volumes of iron ore concentrate declined by 11% to 1.74 mln tonnes (Q3 2020: 1.96 mln tonnes), primarily
driven by higher output at the Yakovlevskiy mine, which was offset by lower production at Karelsky Okatysh due to
seasonal factors and increased pellet sales.
- The weighted average steel selling price of Severstal's product mix rose by 8% q/q in Q4 2020. Severstal
anticipates that the positive momentum in steel and raw material prices observed in November and December 2020 will
positively impact Q1 2021 results.
FY2020 GROUP HIGHLIGHTS
- Output of hot metal increased 1% y/y in FY2020 to 9.54 mln tonnes (FY2019: 9.49 mln tonnes). Production of crude
steel and steel sales volumes both declined 4% y/y due to lower production volumes of EAF steel following the sale
of the Balakovo mini-mill in 2019.
- The share of HVA products increased y/y to 47% in 2020. The share of domestic shipments in 2020 amounted to 60%,
which is lower than 2019 levels (FY2019: 65%). This is the result of a deceleration in the domestic demand in 2020
and the sale of the Balakovo mini-mill, which primarily served domestic markets.
- The weighted average steel selling price for 2020 declined by 12%, as a result of adverse pricing dynamics globally
y/y.
- Iron ore concentrate sales volumes grew 13% y/y to 7.07 mln tonnes (FY2019: 6.26 mln tonnes) driven by output
growth at Karelsky Okatysh and the Yakovlevskiy mine y/y.
- Coking coal concentrate sales volumes from Vorkutaugol increased 1% y/y.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES
Production, thousands of tonnes Q4 2020 Q3 2020 Change, % 2020 2019 Change, %
Crude Steel (Russian Steel) 2,767 2,890 (4%) 11,314 11,847 (4%)
Hot metal (Russian Steel) 2,398 2,402 0% 9,541 9,486 1%
Sales volumes, thousands of tonnes Q4 2020 Q3 2020 Change, % 2020 2019 Change, %
Coking coal concentrate 1,257 1,218 3% 4,702 4,671 1%
Iron ore pellets 2,830 2,613 8% 10,942 11,002 (1%)
Iron ore concentrate 1,735 1,960 (11%) 7,068 6,255 13%
Total steel products (Consolidated)* 2,447 2,989 (18%) 10,736 11,154 (4%)
Total steel products (Russian Steel)** 2,458 3,003 (18%) 10,781 11,201 (4%)
* Total steel products sales volumes (Consolidated) have been adjusted by 17 kt for 9M 2020
** Total steel products sales volumes (Russian Steel) have been adjusted by 17 kt for 9M 2020
High value added steel products, % Q4 2020 Q3 2020 Change, % 2020 2019 Change, % Severstal (Consolidated) 53% 49% 4 ppts 47% 45% 2 ppts Severstal Russian Steel 53% 49% 4 ppts 47% 45% 2 ppts
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, thousands of tonnes Q4 2020 Q3 2020 Change, % 2020 2019 Change, % Coal: 368 344 7% 1,469 1,685 (13%) Coking coal concentrate 66 46 43% 281 408 (31%) Steam coal 302 298 1% 1,188 1,277 (7%) Iron ore: 1,494 1,358 10% 6,024 6,960 (13%) Iron ore pellets 1,494 1,355 10% 5,837 5,995 (3%) Iron ore concentrate 0 3 n/a 187 965 (81%) Semi-finished products 212 97 119% 601 487 23% Rolled products: 1,743 2,366 (26%) 8,363 8,932 (6%) Hot - rolled coil * 816 1,250 (35%) 4,442 4,382 1% Hot - rolled plate 210 244 (14%) 925 957 (3%) Cold - rolled coil 257 253 2% 918 977 (6%) Galvanised and metallic coated coil 238 286 (17%) 939 934 1% Colour coated coil 98 162 (40%) 471 448 5% Long products 124 171 (27%) 668 1,234 (46%) Downstream products: 492 526 (6%) 1,772 1,735 2% Metalware products 161 145 11% 587 563 4% Large diameter pipes 59 85 (31%) 188 383 (51%) Other tubes, pipes, formed shapes 272 296 (8%) 997 789 26%
* Hot - rolled coil sales volumes are adjusted by 17 kt for 9M 2020
SEVERSTAL RESOURCES - Sales volumes of coking coal concentrate from Vorkutaugol increased 3% q/q to 1.26 mln tonnes as a result of higher
output of 1Zh concentrate q/q. - Run of mine coal production at Vorkutaugol decreased by 5% in Q4 2020 vs Q3 2020. - Sales volumes of iron ore pellets increased by 8% to 2.83 mln tonnes (Q3 2020: 2.61 mln tonnes) on the back of
growth in iron ore pellet production at Karelsky Okatysh q/q. - Sales volumes of iron ore concentrate declined by 11% to 1.74 mln tonnes (Q3 2020: 1.96 mln tonnes), primarily
driven by higher output at the Yakovlevskiy mine, which was offset by lower production at Karelsky Okatysh due to
seasonal factors and increased pellet sales.
Sales volumes, thousands of tonnes Q4 2020 Q3 2020 Change, % 2020 2019 Change, % Coal: 1,559 1,516 3% 5,890 5,948 (1%) Coking coal concentrate 1,257 1,218 3% 4,702 4,671 1% Steam coal 302 298 1% 1,188 1,277 (7%) Iron ore: 4,565 4,573 0% 18,010 17,257 4% Iron ore pellets 2,830 2,613 8% 10,942 11,002 (1%) Iron ore concentrate 1,735 1,960 (11%) 7,068 6,255 13%
SEVERSTAL RUSSIAN STEEL ('RSD') - RSD sales of steel products declined 18% q/q to 2.46 mln tonnes in Q4 2020 (Q3 2020: 3.00 mln tonnes) reflecting
the high base effect in sales volumes of Q3 2020, a higher share of exports with a longer realisation period and
production decline q/q. - The Company's share of domestic steel shipments amounted to 65% (Q3 2020: 63%). In Q4 2020 Severstal increased its
export share of semi-finished and hot rolled products. - The share of high value-added (HVA) products within the sales portfolio increased to 53% (Q3 2020: 49%). Severstal
increased sales volumes of HVA metalware products by 10% in Q4 2020, which resulted in lower sales volumes of long
products q/q. - LDP sales volumes totalled 59,000 tonnes in Q4 2020 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 H2 2020.
Severstal expects partial normalisation of oil and gas demand in 2021 and anticipates a recovery in LDP sales
volumes to approximately 400.000 tonnes. - The weighted average selling price for the whole range of steel products in Q4 2020 continued to rise, growing by
8% q/q following an increase of 2% in the previous quarter. This is the result of positive steel pricing dynamics
at export destinations and a higher share of HVA products in the sales mix q/q. Severstal anticipates that the
positive momentum in steel and raw material prices observed in November and December 2020 will positively impact Q1
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