DJ PAO Severstal: Severstal reports Q1 2021 financial and operational results
PAO Severstal (SVST) PAO Severstal: Severstal reports Q1 2021 financial and operational results 16-Apr-2021 / 10:01 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 Q1 2021 financial and operational results - EBITDA margin hits 52%; Delivering 64% EBITDA growth and 134% FCF growth q/q - Moscow, Russia - 16 April 2021 - PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's leading steel and steel-related mining companies, today announces its Q1 2021 operational and financial results for the period ended 31 March 2021. CONSOLIDATED OPERATIONAL AND FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED 31 MARCH 2021 USD million, unless otherwise stated Q1 2021 Q4 2020 Change, % Q1 2021 Q1 20201 Change, % Revenue 2,219 1,723 28.8% 2,219 1,740 27.5% EBITDA2 1,162 710 63.7% 1,162 555 109.4% EBITDA margin, % 52.4% 41.2% 11.2 ppts 52.4% 31.9% 20.5 ppts Profit from operations 1,021 585 74.5% 1,021 425 140.2% Operating margin, % 46.0% 34.0% 12.0 ppts 46.0% 24.4% 21.6 ppts Free cash flow3 497 212 134.4% 497 54 820.4% Net profit 721 386 86.8% 721 72 901.4% Basic EPS4, USD 0.87 0.47 85.1% 0.87 0.09 866.7% Net Debt/EBITDA5, x 0.52 0.84 (38.1%) 0.52 0.57 (8.8%) LTIFR (staff)/LTIFR (staff+contractors)6 0.50/0.69 0.55 (9%)/n/a 0.50/0.69 0.81 (38%)/n/a Crude steel production, kt 2,961 2,767 7% 2,961 2,850 4% Hot metal production, kt 2,674 2,398 12% 2,674 2,410 11% Total steel products sales, kt 2,630 2,441 8% 2,630 2,660 (1%) Share of high value added steel products, % 46% 53% (7 ppts) 46% 42% 4 ppts
Notes: 1. These data include adjustments made in connection with the change in presentation described in Severstal's
quarterly financial statements. 2. EBITDA represents profit from operations plus depreciation and amortisation of productive assets (including the
Group's share in depreciation and amortisation of associates and joint ventures) adjusted for gain/(loss) on
disposals of PPE and intangible assets and its share in associates' and joint ventures' non-operating income/
(expenses). A reconciliation of EBITDA to profit from operations is presented in Severstal's quarterly financial
statements. 3. Free Cash Flow ("FCF") is determined as the aggregate amount of the following items: Net cash from operating
activities, CAPEX, proceeds from disposal of PPE and intangible assets, interest received and dividends received. A
reconciliation of FCF to net cash from operating activities is presented in Severstal's quarterly financial
statements. 4. Basic EPS is calculated as profit for the period divided by the weighted average number of shares outstanding
during the period: 826 million shares for Q1 2021 and Q4 2020, and 825 million shares for Q1 2020. 5. Net Debt/EBITDA ratio is calculated as net debt divided by EBITDA for the last 12 months and is included in
Severstal's quarterly financial statements. Net debt equals the total debt less cash and cash equivalents at the
end of the reporting period. 6. LTIFR refers to Lost Time Injury Frequency Rate, the number of lost time injuries occurring in a workplace per 1
million hours worked. The scope covers injuries and hours worked for staff and contractors, using the cumulative
data from the beginning of the calendar year.
Q1 2021 vs. Q4 2020 ANALYSIS: - Crude steel production increased 7% q/q to 2.96 million tonnes (Q4 2020: 2.77 million tonnes), driven by a higher
number of castings in Q1 2021 and an increase in the weight of each casting. - Hot metal output increased 12% q/q in Q1 2021 to 2.67 million tonnes (Q4 2020: 2.40 million tonnes) following the
launch of BF#3. - Steel product sales increased 8% q/q to 2.63 million tonnes in Q1 2021 (Q4 2020: 2.44 million tonnes) following
higher output volumes and the completion of short-term maintenance works in the previous quarter. - The Company increased its share of steel export shipments to 52% (Q4 2020: 35%) due to the more favourable export
price dynamics and higher demand. - The share of high value-added (HVA) products within the sales portfolio amounted to 46% (Q4 2020: 53%) mainly
reflecting increased volumes of hot-rolled coil, long products and semi-finished products. - Group revenue increased by 28.8% q/q to USD2,219 million (Q4 2020: USD1,723 million) reflecting higher steel sales
volumes and favourable price dynamics. - Group EBITDA increased by 63.7% q/q to USD1,162 million (Q4 2020: USD710 million), driven by higher revenues.
Severstal's vertically integrated business model delivered an EBITDA margin of 52.4%, maintaining the Group's
position as the global leader by EBITDA margin in the steel industry. - Free Cash Flow increased by 134.4% q/q to USD497 million in Q1 2021 (Q4 2020: USD212 million), which primarily reflects
positive changes in net working capital q/q and higher earnings. - Net profit totaled USD721 million (Q4 2020: USD386 million), including a FX loss of USD47 million. - Cash CAPEX amounted to USD278 million (Q4 2020: USD311 million). - Net debt declined to USD1,589 million at the end of Q1 2021 (Q4 2020: USD2,029 million). - Severstal is committed to returning value to its shareholders whilst maintaining a comfortable level of debt.
Severstal's financial position remains strong with a Net debt/EBITDA ratio of 0.52 as at the end of Q1 2021. The
Board of Directors has therefore recommended a dividend of 46.77 roubles per share for Q1 2021.
Q1 2021 vs. Q1 2020 ANALYSIS: - Hot metal output increased 11% y/y in Q1 2021 to 2.67 million tonnes (Q1 2020: 2.41 million tonnes) following the
launch of BF#3. - Crude steel production increased 4% y/y to 2.96 million tonnes (Q1 2020: 2.85 million tonnes), driven by a higher
number of castings in Q1 2021 and an increase in the weight of each casting. - Steel product sales decreased 1% y/y to 2.63 million tonnes in Q1 2021 (Q1 2020: 2.66 million tonnes). - The Company increased its share of steel export shipments to 52% (Q1 2020: 43%) due to the more favourable export
price dynamics and higher demand. - The share of high value-added (HVA) products within the sales portfolio increased to 46% y/y (Q1 2020: 42%). - Group revenue increased by 27.5% y/y to USD2,219 million in Q1 2021 (Q1 2020: USD1,740 million) due to stronger pricing
dynamics. - Group EBITDA was 109.4% higher y/y at USD1,162 million (Q1 2020: USD555 million), reflecting increased revenues. The
Group's EBITDA margin reached record high 52.4% (Q1 2020: 31.9%). - The Company generated USD497 million of Free Cash Flow (Q1 2020: USD54 million), mainly reflecting positive changes in
net working capital y/y and higher earnings.
FINANCIAL POSITION HIGHLIGHTS: - At the end of Q1 2021, cash and cash equivalents increased to USD921 million (Q4 2020: USD583 million). - Gross debt slightly declined to USD2,510 million (Q4 2020: USD2,612 million). - Net debt declined to USD1,589 million at the end of Q1 2021 (Q4 2020: USD2,029 million). The Net debt/EBITDA ratio was
0.52 at the end of Q1 2021 (Q4 2020: 0.84). Severstal's Net debt/EBITDA ratio remains one of the lowest among steel
companies globally and allows the Company to maintain a comfortable level of debt, whilst continuing to return
value to its shareholders. - The Group's liquidity position remains strong, with USD921 million in cash and cash equivalents in addition to unused
committed credit lines and overdraft facilities of USD1,139 million, more than covering the Company's short-term
principal debt of USD718 million.
Alexander Shevelev, CEO of Severstal Management, commented:
"From Q1 2021, Severstal will begin reporting its quarterly financial results a week earlier than previously, shortening the gap between the end of a reporting period and the publication of our financial results. Accordingly, in future, also with effect from Q1, Severstal's quarterly operational and financial performance will be issued as a single document. Severstal was one of the first issuers in the Russian market to publish its Annual Report at the same time as its full-year financial results. Similarly, we are adopting global best practice of publishing unified operational and financial results for investors' convenience.
We will continue to report our safety performance quarterly. We are pleased to report no fatalities with our staff in this period. Starting Q1 2021, we will report quarterly data on the LTIFR for our staff and contractors, and we included contractors in the scope of previously announced safety goals, thus making them more ambitious. I am especially proud to say that LTIFR for our staff declined in Q1 2021 to 0.50.
Severstal's strong performance in Q1 2021 has once again demonstrated the strength of our business model as well as the rewards of our ongoing transformation programme. In Q1 we achieved a record high EBITDA margin of 52.4%.
(MORE TO FOLLOW) Dow Jones Newswires
April 16, 2021 03:02 ET (07:02 GMT)
