TIDMEVR
RNS Number : 2870Y
Evraz Group S.A.
01 September 2009
for immediate release
EVRAZ ANNOUNCES INTERIM RESULTS FOR 1H 2009
September 1, 2009 - Evraz Group S.A. (LSE: EVR) today announces its
unaudited interim results for the six months ended 30 June 2009.
1H 2009 Highlights:
Financials:
* Revenue US$4,639 million
* Consolidated adjusted EBITDA US$468 million*
* Net loss US$999 million, negatively impacted by US$833 million due to change in
accounting policies. Excluding this impact, it would have been US$166 million
loss
* Operating cash flow US$1,123 million
* Total debt reduced by US$1,504 million to US$8,482 million
Steel:
* Crude steel production fell by 28.8% year-on-year to 6.8 million tonnes
* Total steel sales volumes decreased by 28.0% to 6.8 million tonnes
* Restart of Blast Furnace No. 3 at Zapsib at the end of June
Vanadium:
* Vanadium segment revenues decreased by 81.4% to US$138 million
* Sales volumes of vanadium products fell 52.8% year-on-year to 7,448 tonnes in
vanadium equivalent
Mining:
* Iron ore self-coverage of 99%
* Coking coal self-coverage of 133%
Corporate developments:
* Sale of 49% interest in NS Group to TMK for US$508 million completed
* Renouncement of the right to purchase licence to develop the Mezhegey coal
deposit
* Transfer of 26% of the ordinary equity interest in Mapochs Mine (Proprietary)
Limited to local partners in South Africa as part of the Black Economic
Empowerment (BEE) government programme, valued at US$59.8 million
* Excluding extraordinary charges related to bad debt write-offs (US$26
million), net realisable value adjustment of Evraz Inc NA inventories (US$11
million) and penalties (US$7 million), underlying adjusted EBITDA would have
been US$512 million
Execution of Management Action Plan
Production optimisation:
* Shutdown of inefficient capacity
* Shift of production to semi-finished products, where demand is relatively high
* Taking advantage of flexibility between billet and slab production depending on
market situation
* Full utilisation of available capacity in Russian operations achieved from 1
July 2009 (13.5 million tonnes of crude steel per annum)
Cost savings compared to 1H08:
* Cash cost per tonne of semi-finished steel products in Russia and Ukraine
decreased by 35%
* Labour costs decreased by 32%
* Cost of services and auxiliary materials decreased by 42%
Capex savings:
* Capex in 1H09 was US$203 million (a decrease of 61.5% compared with 1H08) out of
US$500 million budgeted for FY2009
* Exit from Cape Lambert Project in Australia
Financial management:
* US$738 million released from working capital in 1H09 in line with our full year
guidance of US$700 million release
* Total debt decreased to US$8,482 million, net debt decreased to US$7,783 million
* Convertible bond and GDR issue in July raised US$965 million
* US$912 million of current loans and borrowings repaid in July-August 2009
* Evraz is currently in compliance with all its financial covenants
* Management intends to proactively approach lenders to address potential covenant
compliance issues in relation to full year results for 2009
Major Changes in Accounting Policies
In order to provide reliable and more relevant information regarding Group
assets in the light of the recent currency fluctuations, Evraz's Board and
management decided to make a voluntary change in the Group's accounting policies
in respect of selected classes of property, plant and equipment under a
revaluation model instead of a cost model with effect from 1 January 2009.
The Group selected the following classes of property, plant and equipment for
inclusion in the revaluation model: land, buildings and constructions, machinery
and equipment. The Group continued to apply the cost model for other classes of
property, plant and equipment.
The effects of this change in accounting policies on the consolidated profit
(loss) and consolidated other comprehensive income for the six-month period
ended 30 June 2009 are:
Effect on consolidated other comprehensive income:
* US$6,231 million of surplus arising on revaluation of property, plant and
equipment, which cannot be distributed to shareholders (net of income tax effect
of $1,670 million)
Effect on consolidated profit (loss):
* US$420 million of revaluation deficit (net of income tax effect of $144 million)
* US$262 million of additional depreciation expense (net of income tax effect of
$77 million)
* US$76 million of impairment loss recognised as of the date of revaluation in
respect of goodwill
* US$75 million impairment loss recognised as of the date of revaluation in
respect of classes of property, plant and equipment that were not subject to
revaluation (net of income tax effect of $21 million)
* No impact on EBITDA or cash-flow
+----------------------------+----------------+----------------+----------------+
| Six months to 30 June | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+----------------------------+----------------+----------------+----------------+
| Revenue | 4,639 | 10,723 | (56.7)% |
+----------------------------+----------------+----------------+----------------+
| Adjusted EBITDA 1 | 468 | 3,706 | (87.4)% |
+----------------------------+----------------+----------------+----------------+
| (Loss)/profit from | (1,046)* | 3,056 | |
| operations | | | |
+----------------------------+----------------+----------------+----------------+
| Net (loss)/profit | (999)** | 2,039 | |
+----------------------------+----------------+----------------+----------------+
| (Losses)/earnings per GDR | (2.52) | 5.37 | |
| 2, (US$) | | | |
+----------------------------+----------------+----------------+----------------+
1 Refer to Attachment 1 for reconciliation to profit from operations
2 One share is represented by three GDRs
* Net (loss)/profit was adversely affected by US$833 million negative effect of
the revaluation of property, plant and equipment, caused by changes in
accounting policy. Excluding this effect it would have been net loss of US$166
million
** (Loss)/profit from operations was adversely affected by US$1,075 million
negative effect of the revaluation of property, plant and equipment, caused by
changes in accounting policy. Excluding this effect it would have been operating
profit of US$29 million.
Alexander Frolov, Evraz Group's CEO, commented:
"The first half of 2009 proved a challenging time for Evraz and for the global
steel industry in general. The ongoing economic recession negatively affected
global infrastructure investments and steel consumption in our key markets.
At the same time Evraz's business model proved its viability and resistance
against the global downturn. Our strategy of pursuing international acquisitions
and global diversification provided us with relative stability. Due to the
different types of cyclicality in relation to different products in different
markets, a sharp contraction of demand in one of our regions was partially
offset by better performances across other business units.
Our Russian operations were among the first to be hit by the global economic
crisis during the second half of 2008, whereas our operations in North America
achieved a stronger performance and, at the onset of 2009, displayed greater
resistance, thereby helping us to partially offset the negative impacts.
Later, as the prices and volumes in North America started to deteriorate in line
with the region's overall market trend, we achieved certain improvements in our
other business units, largely reflecting the end of traders' de-stocking
activities. From April 2009 we witnessed the onset of improved demand,
accompanied by higher pricing, for steel products from our traditional
international markets, particularly South-East Asia, the Middle East and North
Africa. This allowed us to restart our previously idled blast furnace in Siberia
and reach full capacity utilisation across our Russian operations from 1 July
2009.
As a result, our steel segment sales to clients outside Russia accounted for 72%
of our revenues in the first half of 2009, versus 58% for the same period of
2008, a development that demonstrates the increasing geographical
diversification and global competitiveness of our business.
Due to the forward nature of export contracts we experience a time lag of
approximately two months before the benefits of any improvement in international
benchmark prices for semi-finished steel products are translated into revenues.
The international spot price increases for semi-finished steel products in
May-June 2009 will therefore find reflection in our third quarter revenues.
I am pleased to report that we are delivering against our management action plan
and have made good progress in cost reduction, working capital decrease
and capex savings.
Deleveraging remains one of our key priorities and our liquidity plan has
yielded positive results. We decreased our total debt by approximately $1.5
billion in the first half of 2009. In addition, we improved our liquidity
position through a successful concurrent issuance of GDRs and convertible bonds
in July 2009, raising US$965 million."
Outlook
Commenting on the outlook for the remainder of 2009 and beyond Mr Frolov added:
"In view of the positive pricing trends in recent months in our key export
markets, driven primarily by robust demand from the emerging economies of Asia,
the Middle East and North Africa, and the growing volumes of our Russian steel
production from July 2009, we expect better results in the second half of the
current financial year than in the first half.
At the same time, the improving performance of our Russian and Ukrainian
operations was overshadowed by the decreasing profitability of our international
business units, particularly in North America. Although none of our business
divisions are currently making losses at EBITDA level, the situation in the
mature markets of North America and Europe is still uncertain and although
destocking in these markets is largely over, underlying demand remains
distinctly weak.
We remain committed to running the business in the best interests of our
stakeholders and we are confident that consistent execution of our strategy and
our management action plan in relation to cost reduction, efficiency gains and
rigorous financial discipline will allow us to see through the downturn and
improve global competitiveness in order to benefit from subsequent market
growth."
1H 2009 Results Summary:
Evraz's consolidated revenues decreased by 56.7% to US$4,639 million in the
first six months of 2009 compared with US$10,723 million in the first six months
of 2008. Steel segment sales accounted for the majority of the decrease in
revenues, largely due to the drop in average prices and sales volumes of steel
products. Evraz's sales volumes of steel products decreased from 9.5 million
tonnes in 1H 2008 to 6.8 million tonnes in 1H 2009.
The decrease in steel sales volumes primarily relates to a decline in demand for
construction products in Russia with the overall sales in the Russian market
down by 1.9 million tonnes. Sales volumes in Ukraine declined by 0.1 million
tonnes, while total export sales volumes of the Russian and Ukrainian operations
remained at 1H 2008 level. The European and South African operations made
respective contribution of -0.3 million tonnes and -0.2 million tonnes to the
total decrease. Evraz's North American operations contributed -0.3 million
tonnes in spite of 0.3 million of extra tonnes from Evraz Inc. Canada (former
IPSCO Canada), which was acquired in June 2008. These decreases were
attributable to the general slowdown in the steel markets in the first six
months of 2009.
Geographic breakdown of consolidated revenues
+----------+---------+--------+---------+--------+---------+
| | Six months ended 30 June |
+----------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+----------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+----------+---------+--------+---------+--------+---------+
| Russia | 1,304 | 28.1% | 4,280 | 39.9% | (69.5)% |
+----------+---------+--------+---------+--------+---------+
| Americas | 1,354 | 29.2% | 1,765 | 16.5% | (23.3)% |
+----------+---------+--------+---------+--------+---------+
| Asia | 1,075 | 23.2% | 1,911 | 17.8% | (43.7)% |
+----------+---------+--------+---------+--------+---------+
| Europe | 507 | 10.9% | 1,543 | 14.4% | (67.1)% |
+----------+---------+--------+---------+--------+---------+
| CIS | 245 | 5.3% | 783 | 7.3% | (68.7)% |
+----------+---------+--------+---------+--------+---------+
| Africa | 138 | 3.0% | 406 | 3.8% | (66.0)% |
+----------+---------+--------+---------+--------+---------+
| Rest | 16 | 0.3% | 35 | 0.3% | (54.3)% |
| of the | | | | | |
| world | | | | | |
+----------+---------+--------+---------+--------+---------+
| Total | 4,639 | 100.0% | 10,723 | 100.0% | (56.7)% |
+----------+---------+--------+---------+--------+---------+
Revenues from sales in Russia decreased as a proportion of total revenues from
39.9% to 28.1%.
In 1H 2009, revenues from non-Russian sales declined by 48.2% to US$3,335
million compared to US$6,443 million in 1H 2008 and increased as a percentage of
total revenues to 71.9%, compared to 60.1% in 1H 2008. The higher proportion of
revenues outside Russia in the six months ended 30 June 2009 compared to the six
months ended 30 June 2008 was driven by the acquisition of IPSCO Canada and the
re-orientation of sales from the Russian operations to export markets in view of
weak demand in the Russian market.
In the first six months of 2009, the consolidated cost of revenues amounted to
US$4,297 million increasing to 92.6% of consolidated revenues, compared
with US$6,616 million, or 61.7% of consolidated revenues, in the first six
months of 2008. This increase in cost of revenues as a percentage of revenues is
primarily attributable to the decline in steel product margins due to both
negative price and product mix effects in the six months ended 30 June 2009
compared with the same period last year. The effect of the depreciation of local
currencies against the US dollar contributed to the decrease in costs.
Gross profit fell by 91.7% to US$342 million from US$4,107 million in 1H 2008.
Selling, general and administrative (SG&A) expenses as a percentage of
consolidated revenues increased year-on-year from 9.0% to 12.8%.
Impairment of assets increased by US$209 million to US$211 million for 1H 2009,
compared to 1H 2008. Impairment in the first six months of 2009 was mainly
attributable to impairment of goodwill related to the acquisition of the
operations in North America and Ukraine amounting to US$129 million.
Revaluation deficit on property, plant and equipment in the six months ended 30
June 2009 amounted to US$564 million and relates to changes in the accounting
policies.
Profit from operations decreased to a loss of US$1,046 million for 1H 2009, or
-22.5% of consolidated revenues, compared to a profit of US$3,056 million, or
28.5% of consolidated revenues, for 1H 2008. The decrease in profit from
operations is attributable to the decline in consolidated gross profit margin,
impairment of assets and the revaluation deficit on property, plant and
equipment in the six months ended 30 June 2009.
Consolidated adjusted EBITDA decreased by 87.4% to US$468 million in 1H
2009 compared to US$3,706 million in 1H 2008, with EBITDA margins of 10.1% and
34.6% respectively.
The interest income decreased by 6.9% to US$27 million in the first six months
of 2009 from US$29 million in the same period of 2008, largely due to a decrease
in cash balances. The 1H 2009 interest expense increased by 13.9% to US$335
million from US$294 million in 1H 2008 predominantly due to the growth of the
average interest rate.
Loss of US$7 million in the share of profits of associates and joint ventures in
the six months ended 30 June 2009 relates to the loss attributable to Evraz's
interest in the Raspadskaya coal company and the Kazankovskaya mine, an
associate of Yuzhkuzbassugol. The gain on extinguishment of debts in the amount
of US$104 million arose as a result of bonds buyback.
In 1H 2009, income tax expense decreased to a benefit of US$261 million from an
expense of US$850 million, which corresponds to an effective tax rate of 20.7%,
compared to 29.4% in 1H 2008.
The net profit attributable to equity holders of Evraz Group decreased from
US$1,991 million in the six months ended 30 June 2008 to the loss of
US$987 million in the six months ended 30 June 2009*.
* Please refer to Attachment 2 for reconciliation of net profit/(loss) to net
profit/(loss) without the effect of extraordinary items
Explanation of Extraordinary Items
Net income/(loss) line was adversely affected by one-off charges
resulting predominantly from the revaluation of property, plant and equipment
caused by changes in accounting policies. Reported net loss of US$999 million
was negatively impacted by revaluation deficit on property, plant and equipment
of US$420 million (net of income tax effect of US$144 million), impairment
charges of US$194 million (net of net income tax effect of US$17 million)
partially attributed to revaluation (US$151 million, net of income tax effect of
US$21 million), and other one-off items: bad debt write-offs of US$24 million
(net of income tax effect of $2 million), net realisable value adjustment of
Evraz Inc NA inventories of US$7 million (net of income tax effect of $4
million), penalties of US$7 million, loss from disposal of subsidiary of US$12
million and effect of change in tax accounting policy for Cyprus subsidiary of
US$14 million.
Extraordinary gain on extinguishment of debts (US$104 million) and foreign
exchange gain (US$71 million, net of income tax effect of US$3 million)
partially offset negative impact of the revaluation on net income/(loss) line.
As a result of the above mentioned extraordinary items, net loss increased by
US$503 million. Without these factors net loss would have been US$496 million.
Review of Operations
Steel Segment Results
+----------------------------+---------------+----------------+----------------+
| Six months to 30 June | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+----------------------------+---------------+----------------+----------------+
| Revenues* | 4,291 | 9,235 | (53.5)% |
+----------------------------+---------------+----------------+----------------+
| (Loss)/profit from | (882) | 2,314 | (138.1)% |
| operations | | | |
+----------------------------+---------------+----------------+----------------+
| Adjusted EBITDA | 389 | 2,700 | (85.6)% |
+----------------------------+---------------+----------------+----------------+
| Adjusted EBITDA margin | 9.1% | 29.2% | |
+----------------------------+---------------+----------------+----------------+
*Segmental revenues here and further include intersegment sales
Steel Segment Sales
+----------------------------+---------+--------+---------+--------+---------+
| | Six months ended 30 June |
+----------------------------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+----------------------------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+----------------------------+---------+--------+---------+--------+---------+
| Steel | | | | | |
| products | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Construction | 817 | 19.0% | 2,815 | 30.5% | (71.0)% |
| products 1 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Railway | 579 | 13.5% | 1,137 | 12.3% | (49.1)% |
| products | | | | | |
| 2 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Flat-rolled | 652 | 15.2% | 1,610 | 17.4% | (59.5)% |
| products 3 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| of | 48 | 1.1% | 26 | 0.3% | 84.6% |
| which | | | | | |
| IPSCO | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Tubular | 675 | 15.7% | 534 | 5.8% | 26.4% |
| products | | | | | |
| 4 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| of | 414 | 9.6% | 52 | 0.6% | n/a |
| which | | | | | |
| IPSCO | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Semi-finished | 964 | 22.5% | 1,963 | 21.3% | (50.9)% |
| products 5 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Other | 107 | 2.5% | 298 | 3.2% | (64.1)% |
| steel | | | | | |
| products | | | | | |
| 6 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Other | 497 | 11.6% | 878 | 9.5% | (43.4)% |
| products | | | | | |
| 7 | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| of | 73 | 1.7% | 8 | 0.1% | n/a |
| which | | | | | |
| IPSCO | | | | | |
+----------------------------+---------+--------+---------+--------+---------+
| Total | 4,291 | 100.0% | 9,235 | 100.0% | (53.5)% |
+----------------------------+---------+--------+---------+--------+---------+
1 Includes rebars, wire rods, wire, H-beams, channels and angles.
2 Includes rail and wheels.
3 Includes plates and coils.
4 Includes large diameter, ERW, seamless pipes and casing.
5 Includes billets, slabs, pig iron, pipe blanks and blooms.
6 Includes rounds, grinding balls, mine uprights and strips.
7 Includes coke and coking products, refractory products, ferroalloys and resale
of coking coal.
Steel Segment Sales Volumes*
+------------------------------+---------------+---------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+------------------------------+---------------+---------------+---------------+
| Steel products | | | |
+------------------------------+---------------+---------------+---------------+
| Construction products | 1,728 | 3,138 | (44.9)% |
+------------------------------+---------------+---------------+---------------+
| Railway products | 822 | 1,247 | (34.1)% |
+------------------------------+---------------+---------------+---------------+
| Flat-rolled products | 887 | 1,428 | (37.9)% |
+------------------------------+---------------+---------------+---------------+
| Tubular products | 501 | 367 | 36.5% |
+------------------------------+---------------+---------------+---------------+
| Semi-finished products | 2,704 | 2,987 | (9.5)% |
+------------------------------+---------------+---------------+---------------+
| Other steel products | 204 | 340 | (40.0)% |
+------------------------------+---------------+---------------+---------------+
| Total | 6,846 | 9,507 | (28.0)% |
+------------------------------+---------------+---------------+---------------+
* Including intersegment sales
Steel segment revenues decreased by 53.5% to US$4,291 million in the first six
months of 2009 from US$9,235 million in the first six months of 2008, affected
by the negative price dynamics for steel products and lower sales volumes that
were to a certain extent mitigated by the acquisition of IPSCO Canada in June
2008.
The proportion of both revenues and sales volumes attributable to construction
products decreased, reflecting a significant decline in sales volumes of
construction products from Russian operations.
Despite a decrease in volumes, the proportion of revenues attributable to sales
of railway products increased slightly due to the fact that prices for railway
products decreased less than average prices of other steel products.
The proportion of revenues attributable to sales of flat-rolled products
(primarily plates) decreased due to an above average decrease in sales volumes
compared to other steel products.
The proportion of revenues attributable to sales of tubular products
significantly increased as a result of the additional sales volumes from IPSCO
Canada and below average decline in average prices compared to other steel
products.
The proportion of revenues attributable to sales of semi-finished products
showed a slight increase primarily due to higher sales volumes of semis sold by
the Russian and Ukrainian operations to the export markets.
Revenues from sales of other steel products (mainly rounds, grinding balls and
mine uprights sold in Russia) decreased slightly as a proportion of steel
segment revenues due to an above average decrease in sales volumes compared to
other steel products.
Revenues attributable to other non-steel sales increased as a proportion of
steel segment sales due to contribution of IPSCO Canada and lower impact from
price decreases compared to steel sales.
For 1H 2009 and 1H 2008, steel segment sales to the mining segment amounted to
US$37 million and US$84 million, respectively. The decrease is attributable to
lower sale prices and volumes.
Revenues from sales outside Russia amounted to approximately 73% of steel
segment revenues in the first six months of 2009, compared to 58% in the first
six months of 2008. The increased share of revenues from sales outside Russia is
primarily attributable to the contribution of IPSCO Canada and a higher
proportion of export sales by the Russian and Ukrainian operations.
Steel segment cost of revenues totalled US$3,953 million, or 92.1% of steel
segment revenues in 1H 2009 compared with US$6,172 million or 66.8% of steel
segment revenues in 1H 2008. The decrease is attributable to the drop in sales
volumes and in prices of raw materials.
In 1H 2009, the steel segment profit from operations decreased to a loss of
US$882 million, from a profit of US$2,314 million in 1H 2008.
In 1H 2009, adjusted EBITDA in the steel segment was US$389 million, or 9.1% of
steel segment revenues, vs. US$2,700 million, or 29.2% in 1H 2008.
Mining Segment Results
+------------------------------+--------------+--------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+------------------------------+--------------+--------------+---------------+
| Revenues | 652 | 2,012 | (67.6)% |
+------------------------------+--------------+--------------+---------------+
| (Loss)/profit from | (202) | 620 | (132.6)% |
| operations | | | |
+------------------------------+--------------+--------------+---------------+
| Adjusted EBITDA | 94 | 837 | (88.8)% |
+------------------------------+--------------+--------------+---------------+
| Adjusted EBITDA margin | 14.4% | 41.6% | |
+------------------------------+--------------+--------------+---------------+
Mining Segment Sales
+-------------+---------+--------+---------+--------+---------+
| | Six months ended 30 June |
+-------------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+-------------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+-------------+---------+--------+---------+--------+---------+
| Iron | 362 | 55.5% | 1,225 | 60.9% | (70.4)% |
| ore | | | | | |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Iron | 115 | 17.6% | 308 | 15.3% | (62.7)% |
| ore | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Sinter | 134 | 20.6% | 469 | 23.3% | (71.4)% |
+-------------+---------+--------+---------+--------+---------+
| Pellets | 107 | 16.4% | 342 | 17.0% | (68.7)% |
+-------------+---------+--------+---------+--------+---------+
| Other | 6 | 0.9% | 106 | 5.3% | (94.3)% |
+-------------+---------+--------+---------+--------+---------+
| Coal | 255 | 39.1% | 704 | 35.0% | (63.8)% |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Coking | 67 | 10.3% | 119 | 5.9% | (43.7)% |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Coal | 107 | 16.4% | 414 | 20.6% | (74.2)% |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 68 | 10.4% | 171 | 8.5% | (60.2)% |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 13 | 2.0% | - | - | n/a |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Other | 35 | 5.4% | 83 | 4.1% | (57.8)% |
| revenues | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Total | 652 | 100.0% | 2,012 | 100.0% | (67.6)% |
+-------------+---------+--------+---------+--------+---------+
+------------------------------+---------------+---------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+------------------------------+---------------+---------------+---------------+
| Iron ore products | 7,733 | 11,920 | (35.1)% |
+------------------------------+---------------+---------------+---------------+
| Iron ore concentrate | 2,433 | 3,250 | (25.1)% |
+------------------------------+---------------+---------------+---------------+
| Sinter | 2,398 | 4,059 | (40.9)% |
+------------------------------+---------------+---------------+---------------+
| Pellets | 2,625 | 3,084 | (14.9)% |
+------------------------------+---------------+---------------+---------------+
| Other | 277 | 1,527 | (81.9)% |
+------------------------------+---------------+---------------+---------------+
| Coal products | 6,128 | 6,351 | (3.5)% |
+------------------------------+---------------+---------------+---------------+
| Coking coal | 2,264 | 1,501 | 50.8% |
+------------------------------+---------------+---------------+---------------+
| Coal concentrate | 1,809 | 2,635 | (31.3)% |
+------------------------------+---------------+---------------+---------------+
| Steam coal | 1,864 | 2,215 | (15.8)% |
+------------------------------+---------------+---------------+---------------+
| Steam concentrate | 191 | - | n/a |
+------------------------------+---------------+---------------+---------------+
* Including intersegment sales
Mining segment revenues were down by 67.6% to US$652 million, compared with
US$2,012 million in the 1H 2008, primarily reflecting a significant decline in
the average prices and volumes of iron ore products and in average prices of
coal products.
In 1H 2009 mining segment sales to the steel segment amounted to US$456 million,
or 69.9% of mining segment sales, vs. US$1,265 million, or 62.9% of mining
segment sales in 1H 2008.
The mining segment cost of revenues decreased by 42.7% from US$1,196 million in
1H 2008 to US$685 million in 1H 2009, mainly as a consequence of the decrease in
raw materials (-81.1%), transportation (-4.5%), staff (-26.4%), energy (-17.7%)
and other (-54.0%) costs.
The mining segment profit from operations decreased to a loss of US$202 million
in the six months ended 30 June 2009. This compares with a profit of US$620
million in the same period of 2008.
Adjusted EBITDA in the mining segment decreased by 88.8% to US$94 million, or
14.4% of mining segment revenues in 1H 2009, from US$837 million, or 41.6% of
mining segment revenues in 1H 2008.
Vanadium Segment Results
+------------------------------+--------------+--------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+------------------------------+--------------+--------------+---------------+
| Revenues | 138 | 740 | (81.4)% |
+------------------------------+--------------+--------------+---------------+
| (Loss)/profit from | (48) | 179 | (126.8)% |
| operations | | | |
+------------------------------+--------------+--------------+---------------+
| Adjusted EBITDA | (34) | 185 | (118.4)% |
+------------------------------+--------------+--------------+---------------+
| Adjusted EBITDA margin | (24.6)% | 25.0% | |
+------------------------------+--------------+--------------+---------------+
Vanadium Segment Sales Volumes
+------------------------------+---------------+---------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+------------------------------+---------------+---------------+---------------+
| Vanadium products | 7.4 | 15.8 | (53.2)% |
+------------------------------+---------------+---------------+---------------+
| Vanadium in slag | 4.7 | 5.9 | (20.3)% |
+------------------------------+---------------+---------------+---------------+
| Vanadium in alloys and | 2.7 | 9.9 | (72.7)% |
| chemicals | | | |
+------------------------------+---------------+---------------+---------------+
Vanadium segment revenues decreased by 81.4% to US$138 million in the first six
months of 2009, compared with US$740 million in the first six months of 2008.
The decrease is attributable to a significant decrease in vanadium prices and
sales volumes.
The vanadium segment cost of revenues fell by 71.6% from US$559 million in 1H
2008 to US$159 million in 1H 2009.
The vanadium segment profit from operations decreased to a loss of US$48 million
in 1H 2009 from a profit of US$179 million in 1H 2008.
Adjusted EBITDA in the vanadium segment was down to negative US$34 million from
positive US$185 million in 1H 2008.
Other operations segment results
+------------------------------+---------------+---------------+---------------+
| Six months to 30 June | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+------------------------------+---------------+---------------+---------------+
| Revenues | 343 | 582 | (41.1)% |
+------------------------------+---------------+---------------+---------------+
| Profit from operations | 25 | 67 | (62.7)% |
+------------------------------+---------------+---------------+---------------+
| Adjusted EBITDA | 70 | 94 | (25.5)% |
+------------------------------+---------------+---------------+---------------+
| Adjusted EBITDA margin | 20.4% | 16.2% | |
+------------------------------+---------------+---------------+---------------+
Evraz's revenues from other operations including logistics, port services, power
and heat generation and supporting activities totalled US$343 million, a 41.1%
decrease compared with 1H 2008 revenues.
Consolidated Group Financial Position
Cash flow
Cash flow from operating activities decreased from US$2,449 million in the first
six months of 2008 to US$1,123 million in the first six months of 2009 due to
poor market conditions, resulting in decreased profit margins and to the decline
in revenue in the first six months of 2009.
Net cash from investing activities totalled US$380 million in 1H 2009 vs. net
cash used in investing activities of US$3,166 million in 1H 2008.
In 1H 2009, Evraz made capital expenditures of approximately US$203 million,
including US$131 million in its steel segment and US$68 million in its mining
segment.
In 1H 2009, net cash used in financing activities amounted to US$1,775 million
compared with US$1,304 million net cash generated from financing activities in
1H 2008.
Balance sheet
As of 30 June 2009 total debt amounted to US$8,482 million, down from
US$9,986 million on 31 December 2008. Cash and cash equivalents together with
short-term bank deposits amounted to US$699 million, down from US$955 million at
31 December 2008. Liquidity*, defined as cash and cash equivalents, amounts
available under unrestricted credit facilities and short-term bank deposits with
original maturity of more than three months, totalled approximately
US$1,262 million as of 30 June 2009 and approximately US$1,946 million as of 31
December 2008.
As of 30 June 2009, Evraz had unutilised borrowing facilities in the amount of
US$1,170 million, including US$563 million of committed facilities and
US$607 million of uncommitted facilities.
Net debt** decreased to US$7,783 million as of 30 June 2009 from
US$9,031 million as of 31 December 2008.
As of 30 June 2009, total assets amounted to US$23,115 million vs.
US$19,451 million as of 31 December 2008, primarily as a result of the
revaluation surplus arising from the revaluation of certain of the Group's
assets as of 1 January 2009.
Evraz Group S.A. shareholders' equity, including reserves and accumulated
profits increased to US$9,575 million as of 30 June 2009 from US$4,672 million
as of 31 December 2008, primarily as a result of the revaluation surplus arising
from the revaluation of certain of the Group's assets as of 1 January 2009.
* Please refer to Attachment 3 for calculation of liquidity
** Please refer
to Attachment 4 for calculation of net debt
# # #
Note:
Percentage changes may not be exact due to rounding.
For further information:
Evraz Group
Investor Relations Director
Alexander Boreyko
Tel: +7 495 232 1370
IR@evraz.com
Attachment 1
Adjusted EBITDA
Adjusted EBITDA represents profit from operations adjusted for depreciation,
depletion and amortisation, impairment of assets and loss (gain) on disposal of
property, plant and equipment, foreign exchange gains/(losses). Evraz presents
an Adjusted EBITDA because it considers Adjusted EBITDA to be an important
supplemental measure of its operating performance and believes Adjusted EBITDA
is frequently used by securities analysts, investors and other interested
parties in the evaluation of companies in the same industry. Adjusted EBITDA is
not a measure of financial performance under IFRS and it should not be
considered as an alternative to net profit as a measure of operating performance
or to cash flows from operating activities as a measure of liquidity. Evraz's
calculation of Adjusted EBITDA may be different from the calculation used by
other companies and therefore comparability may be limited. Adjusted EBITDA has
limitations as an analytical tool, and potential investors should not consider
it in isolation, or as a substitute for an analysis of our operating results as
reported under IFRS. Some of these limitations include:
Adjusted EBITDA does not reflect the impact of financing or financing costs on
Evraz's operating performance, which can be significant and could further
increase if Evraz were to incur more debt.
Adjusted EBITDA does not reflect the impact of income taxes on Evraz's operating
performance.
Adjusted EBITDA does not reflect the impact of depreciation and amortisation on
Evraz's operating performance. The assets of Evraz's businesses which are being
depreciated and/or amortised will have to be replaced in the future and such
depreciation and amortisation expense may approximate the cost to replace these
assets in the future. By excluding this expense from Adjusted EBITDA, Adjusted
EBITDA does not reflect Evraz's future cash requirements for these replacements.
Reconciliation of Adjusted EBITDA to profit from operations is as follows
(unaudited):
+------------------------------------------------+--------------+--------------+
| | Six months ended 30 June |
+------------------------------------------------+-----------------------------+
| | 2009 | 2008 |
+------------------------------------------------+--------------+--------------+
| | (US$ million) |
+------------------------------------------------+-----------------------------+
| Consolidated Adjusted EBITDA reconciliation | |
+------------------------------------------------+-----------------------------+
| (Loss)/profit from operations | (1,046) | 3,056 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Depreciation | 782 | 607 |
+------------------------------------------------+--------------+--------------+
| Impairment of assets | 211 | 2 |
+------------------------------------------------+--------------+--------------+
| Loss (gain) on disposal of property, plant & | 25 | (5) |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange loss (gain) | (68) | 46 |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit | 564 | - |
+------------------------------------------------+--------------+--------------+
| Consolidated Adjusted EBITDA | 468 | 3,706 |
+------------------------------------------------+--------------+--------------+
| Steel segment Adjusted EBITDA reconciliation | | |
+------------------------------------------------+--------------+--------------+
| (Loss)/profit from operations | (882) | 2,314 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Depreciation | 571 | 380 |
+------------------------------------------------+--------------+--------------+
| Impairment of assets | 221 | 1 |
+------------------------------------------------+--------------+--------------+
| Loss (gain) on disposal of property, plant & | 15 | (5) |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange loss (gain) | 40 | 10 |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit | 424 | |
+------------------------------------------------+--------------+--------------+
| Steel segment Adjusted EBITDA | 389 | 2,700 |
+------------------------------------------------+--------------+--------------+
| Vanadium segment Adjusted EBITDA | | |
| reconciliation | | |
+------------------------------------------------+--------------+--------------+
| (Loss)/profit from operations | (48) | 179 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Depreciation | 8 | 6 |
+------------------------------------------------+--------------+--------------+
| Impairment of assets | - | - |
+------------------------------------------------+--------------+--------------+
| Loss (gain) on disposal of property, plant & | - | - |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange loss (gain) | 2 | - |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit | 4 | - |
+------------------------------------------------+--------------+--------------+
| Mining segment Adjusted EBITDA | (34) | 185 |
+------------------------------------------------+--------------+--------------+
| Mining segment Adjusted EBITDA reconciliation | | |
+------------------------------------------------+--------------+--------------+
| (Loss)/profit from operations | (202) | 620 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Depreciation | 187 | 196 |
+------------------------------------------------+--------------+--------------+
| Impairment of assets | (11) | - |
+------------------------------------------------+--------------+--------------+
| Loss (gain) on disposal of property, plant & | 7 | - |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange loss (gain) | 1 | 21 |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit | 112 | - |
+------------------------------------------------+--------------+--------------+
| Vanadium segment Adjusted EBITDA | 94 | 837 |
+------------------------------------------------+--------------+--------------+
| Other operations Adjusted EBITDA | | |
| reconciliation | | |
+------------------------------------------------+--------------+--------------+
| Profit from operations | 25 | 67 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Depreciation | 15 | 24 |
+------------------------------------------------+--------------+--------------+
| Impairment of assets | 1 | 2 |
+------------------------------------------------+--------------+--------------+
| Loss (gain) on disposal of property, plant & | 3 | - |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange loss (gain) | 2 | 1 |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit | 24 | - |
+------------------------------------------------+--------------+--------------+
| Other operations Adjusted EBITDA | 70 | 94 |
+------------------------------------------------+--------------+--------------+
Attachment 2
Reconciliation of net profit/(loss) to net profit/(loss) without the impact of
one-offs and write-offs (unaudited):
+------------------------------------------------+--------------+--------------+
| | Six months ended 30 June |
+------------------------------------------------+-----------------------------+
| | 2009 | 2008 |
+------------------------------------------------+--------------+--------------+
| | (US$ million) |
+------------------------------------------------+-----------------------------+
| Net profit/(loss) | (999) | 2,039 |
+------------------------------------------------+--------------+--------------+
| Add: | | |
+------------------------------------------------+--------------+--------------+
| Revaluation deficit on property, plant and | 420 | - |
| equipment | | |
+------------------------------------------------+--------------+--------------+
| Impairment (including $151 million recognised | 194 | 2 |
| on revaluation) | | |
+------------------------------------------------+--------------+--------------+
| Foreign exchange gain | (71) | 35 |
+------------------------------------------------+--------------+--------------+
| Gain on bonds repurchase | (104) | - |
+------------------------------------------------+--------------+--------------+
| Write-off of receivables | 24 | - |
+------------------------------------------------+--------------+--------------+
| Fines and penalties | 7 | - |
+------------------------------------------------+--------------+--------------+
| Additional NRV allowance | 7 | - |
+------------------------------------------------+--------------+--------------+
| Loss from disposal of subsidiary | 12 | 9 |
+------------------------------------------------+--------------+--------------+
| Cumulative effect of change in | 14 | - |
| tax accounting policy for | | |
| Cyprus subsidiary | | |
+------------------------------------------------+--------------+--------------+
| Net profit/(loss) without one-offs | (496) | 2,085 |
+------------------------------------------------+--------------+--------------+
Attachment 3
Liquidity
+-------------------------------------------------+------------+-------+------------+
| | 30 June | 31 December |
| | 2009 | 2008 |
+-------------------------------------------------+------------+--------------------+
| | (US$ million) |
+-------------------------------------------------+---------------------------------+
| Liquidity Calculation | |
+-------------------------------------------------+---------------------------------+
| Cash and cash equivalents | 678 | 930 |
+-------------------------------------------------+--------------------+------------+
| Amounts available under unrestricted credit | 563 | 991 |
| facilities | | |
+-------------------------------------------------+--------------------+------------+
| Short-term bank deposits with original maturity | 21 | 25 |
| more than 3 months | | |
+-------------------------------------------------+--------------------+------------+
| Total liquidity | 1,262 | 1,946 |
+-------------------------------------------------+------------+-------+------------+
Attachment 4
Net Debt
Net Debt represents long-term loans, net of current portion, plus short-term
loans and current portion of long?term loans less cash and cash equivalents
(excluding restricted deposits). Net Debt is not a balance sheet measure under
IFRS, and it should not be considered as an alternative to other measures of
financial position. Evraz's calculation of Net Debt may be different from the
calculation used by other companies and therefore comparability may be limited.
Net Debt has been calculated as follows (unaudited):
+-------------------------------------------------+------------+-------+------------+
| | 30 June | 31 December |
| | 2009 | 2008 |
+-------------------------------------------------+------------+--------------------+
| | (US$ million) |
+-------------------------------------------------+---------------------------------+
| Net Debt Calculation | |
+-------------------------------------------------+---------------------------------+
| Add: | | |
+-------------------------------------------------+--------------------+------------+
| Long-term loans, net of current portion | 4,545 | 6,064 |
+-------------------------------------------------+--------------------+------------+
| Short-term loans and current portion of | 3,937 | 3,922 |
| long-term loans | | |
+-------------------------------------------------+--------------------+------------+
| Less: | | |
+-------------------------------------------------+--------------------+------------+
| Short-term bank deposits | (21) | (25) |
+-------------------------------------------------+--------------------+------------+
| Cash and cash equivalents | (678) | (930) |
+-------------------------------------------------+--------------------+------------+
| Net Debt | 7,783 | 9,031 |
+-------------------------------------------------+------------+-------+------------+
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Operations
(In millions of US dollars, except for per share information)
+--------------------------------------------+----------------+----------------+
| |Six-month period ended 30 June |
+--------------------------------------------+---------------------------------+
| | 2009 | 2008* |
+--------------------------------------------+----------------+----------------+
| Revenue | | |
+--------------------------------------------+----------------+----------------+
| Sale of goods | 4,485 | 10,512 |
+--------------------------------------------+----------------+----------------+
| Rendering of services | 154 | 211 |
+--------------------------------------------+----------------+----------------+
| | 4,639 | 10,723 |
+--------------------------------------------+----------------+----------------+
| Cost of revenue | (4,297) | (6,616) |
+--------------------------------------------+----------------+----------------+
| Gross profit | 342 | 4,107 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Selling and distribution costs | (284) | (499) |
+--------------------------------------------+----------------+----------------+
| General and administrative expenses | (311) | (461) |
+--------------------------------------------+----------------+----------------+
| Social and social infrastructure | (17) | (49) |
| maintenance expenses | | |
+--------------------------------------------+----------------+----------------+
| Gain/(loss) on disposal of property, plant | (25) | 5 |
| and equipment | | |
+--------------------------------------------+----------------+----------------+
| Impairment of assets | (211) | (2) |
+--------------------------------------------+----------------+----------------+
| Revaluation deficit on property, plant and | (564) | - |
| equipment | | |
+--------------------------------------------+----------------+----------------+
| Foreign exchange gains/(losses), net | 68 | (46) |
+--------------------------------------------+----------------+----------------+
| Other operating income | 13 | 24 |
+--------------------------------------------+----------------+----------------+
| Other operating expenses | (57) | (23) |
+--------------------------------------------+----------------+----------------+
| Profit/(loss) from operations | (1,046) | 3,056 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Interest income | 27 | 29 |
+--------------------------------------------+----------------+----------------+
| Interest expense | (335) | (294) |
+--------------------------------------------+----------------+----------------+
| Share of profits/(losses) of joint | (7) | 96 |
| ventures and associates | | |
+--------------------------------------------+----------------+----------------+
| Gain/(loss) on financial assets and | 110 | 2 |
| liabilities | | |
+--------------------------------------------+----------------+----------------+
| Loss on disposal groups classified as held | (3) | (9) |
| for sale | | |
+--------------------------------------------+----------------+----------------+
| Other non-operating gains/(losses), net | (6) | 9 |
+--------------------------------------------+----------------+----------------+
| Profit/(loss) before tax | (1,260) | 2,889 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Income tax benefit/(expense) | 261 | (850) |
+--------------------------------------------+----------------+----------------+
| Net profit/(loss) | (999) | 2,039 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Attributable to: | | |
+--------------------------------------------+----------------+----------------+
| Equity holders of the parent | (987) | 1,991 |
| entity | | |
+--------------------------------------------+----------------+----------------+
| Minority interests | (12) | 48 |
+--------------------------------------------+----------------+----------------+
| | (999) | 2,039 |
+--------------------------------------------+----------------+----------------+
| Earnings/(losses) per share: | | |
+--------------------------------------------+----------------+----------------+
| basic, for profit attributable to equity | (7.55) | 16.12 |
| holders of the parent entity, US dollars | | |
+--------------------------------------------+----------------+----------------+
| diluted, for profit attributable to | (7.55) | 16.03 |
| equity holders of the parent entity, | | |
| US dollars | | |
+--------------------------------------------+----------------+----------------+
* The amounts shown here do not correspond to the financial statements for the
six-month period ended 30 June 2008 and reflect adjustments made in connection
with the completion of initial accounting as detailed in Note 4 to the Unaudited
Interim Condensed Consolidated Financial Statements
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Comprehensive Income
(In millions of US dollars, except for per share information)
+--------------------------------------------+----------------+----------------+
| |
+--------------------------------------------+
| | Six-month period ended 30 June |
+--------------------------------------------+---------------------------------+
| | 2009 | 2008* |
+--------------------------------------------+----------------+----------------+
| | Six-month period ended 30 June |
+--------------------------------------------+---------------------------------+
| | 2009 | 2008* |
+--------------------------------------------+----------------+----------------+
| Net profit/(loss) | (999) | 2,039 |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Other comprehensive income | | |
+--------------------------------------------+----------------+----------------+
| Effect of translation to presentation | (465) | 366 |
| currency | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Net gains/(losses) on available-for-sale | 20 | (22) |
| financial assets | | |
+--------------------------------------------+----------------+----------------+
| Income tax effect | (2) | - |
+--------------------------------------------+----------------+----------------+
| | 18 | (22) |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Surplus on revaluation of property, | 7,901 | - |
| plant and equipment of the Group's | | |
| subsidiaries | | |
+--------------------------------------------+----------------+----------------+
| Deficit on revaluation of property, | (38) | |
| plant and equipment recognised in | | |
| other comprehensive income | | |
+--------------------------------------------+----------------+----------------+
| Decrease in revaluation surplus in | (45) | - |
| connection with the impairment of | | |
| property, plant and equipment | | |
+--------------------------------------------+----------------+----------------+
| Income tax effect | (1,656) | - |
+--------------------------------------------+----------------+----------------+
| | 6,162 | - |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Surplus on revaluation of property, | 66 | - |
| plant and equipment of the Group's | | |
| joint ventures and associates | | |
+--------------------------------------------+----------------+----------------+
| Effect of translation to | (37) | 28 |
| presentation currency | | |
+--------------------------------------------+----------------+----------------+
| Share of other comprehensive income | 29 | 28 |
| of joint ventures and associates | | |
| accounted for using the equity | | |
| method | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Total other comprehensive income | 5,744 | 372 |
+--------------------------------------------+----------------+----------------+
| Total other comprehensive income, net of | 4,745 | 2,411 |
| tax | | |
+--------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------+----------------+----------------+
| Attributable to: | | |
+--------------------------------------------+----------------+----------------+
| Equity holders of the parent | 4,680 | 2,382 |
| entity | | |
+--------------------------------------------+----------------+----------------+
| Minority interests | 65 | 29 |
+--------------------------------------------+----------------+----------------+
| | 4,745 | 2,411 |
+--------------------------------------------+----------------+----------------+
* The amounts shown here do not correspond to the financial statements for the
six-month period ended 30 June 2008 and reflect adjustments made in connection
with the completion of initial accounting as detailed in Note 4 to the Unaudited
Interim Condensed Consolidated Financial Statements
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Financial Position
(In millions of US dollars)
+--------------------------------------------+----------------+----------------+----------------+
| | 30 June | 31 December |
| | 2009 | 2008* |
+--------------------------------------------+----------------+----------------+
| Assets | | |
+--------------------------------------------+----------------+----------------+
| Non-current assets | | |
+--------------------------------------------+----------------+----------------+
| Property, plant and equipment | 14,989 | 9,012 |
+--------------------------------------------+----------------+----------------+
| Intangible assets other than goodwill | 1,097 | 1,108 |
+--------------------------------------------+----------------+----------------+
| Goodwill | 2,077 | 2,167 |
+--------------------------------------------+----------------+----------------+
| Investments in joint ventures and | 586 | 551 |
| associates | | |
+--------------------------------------------+----------------+----------------+
| Deferred income tax assets | 26 | 44 |
+--------------------------------------------+----------------+----------------+
| Other non-current assets | 281 | 278 |
+--------------------------------------------+----------------+----------------+
| | 19,056 | 13,160 |
+--------------------------------------------+----------------+----------------+
| Current assets | | |
+--------------------------------------------+----------------+----------------+
| Inventories | 1,641 | 2,416 |
+--------------------------------------------+----------------+----------------+
| Trade and other receivables | 925 | 1,369 |
+--------------------------------------------+----------------+----------------+
| Prepayments | 86 | 76 |
+--------------------------------------------+----------------+----------------+
| Loans receivable | 58 | 108 |
+--------------------------------------------+----------------+----------------+
| Receivables from related parties | 98 | 137 |
+--------------------------------------------+----------------+----------------+
| Income tax receivable | 147 | 262 |
+--------------------------------------------+----------------+----------------+
| Other taxes recoverable | 263 | 397 |
+--------------------------------------------+----------------+----------------+
| Short-term investments | 89 | 589 |
+--------------------------------------------+----------------+----------------+
| Restricted deposits at banks | 47 | - |
+--------------------------------------------+----------------+----------------+
| Cash and cash equivalents | 678 | 930 |
+--------------------------------------------+----------------+----------------+
| | 4,032 | 6,284 |
+--------------------------------------------+----------------+----------------+
| Assets of disposal groups classified as | 27 | 7 |
| held for sale | | |
+--------------------------------------------+----------------+----------------+
| | 4,059 | 6,291 |
+--------------------------------------------+----------------+----------------+
| Total assets | 23,115 | 19,451 |
+--------------------------------------------+----------------+----------------+
| Equity and liabilities | | |
+--------------------------------------------+----------------+----------------+
| Equity | | |
+--------------------------------------------+----------------+----------------+
| Equity attributable to equity holders of | | |
| the parent entity | | |
+--------------------------------------------+----------------+----------------+
| Issued capital | 357 | 332 |
+--------------------------------------------+----------------+----------------+
| Treasury shares | - | (9) | |
+--------------------------------------------+----------------+----------------+----------------+
| Additional paid-in capital | 1,249 | 1,054 |
+--------------------------------------------+----------------+----------------+
| Revaluation surplus | 6,379 | 218 |
+--------------------------------------------+----------------+----------------+
| Legal reserve | 32 | 30 |
+--------------------------------------------+----------------+----------------+
| Unrealised gains and losses | 18 | - |
+--------------------------------------------+----------------+----------------+
| Accumulated profits | 3,394 | 4,377 |
+--------------------------------------------+----------------+----------------+
| Translation difference | (1,854) | (1,330) |
+--------------------------------------------+----------------+----------------+
| | 9,575 | 4,672 |
+--------------------------------------------+----------------+----------------+
| Minority interests | 309 | 245 |
+--------------------------------------------+----------------+----------------+
| | 9,884 | 4,917 |
+--------------------------------------------+----------------+----------------+
| Non-current liabilities | | |
+--------------------------------------------+----------------+----------------+
| Long-term loans | 4,545 | 6,064 |
+--------------------------------------------+----------------+----------------+
| Deferred income tax liabilities | 2,611 | 1,389 |
+--------------------------------------------+----------------+----------------+
| Finance lease liabilities | 42 | 40 |
+--------------------------------------------+----------------+----------------+
| Employee benefits | 296 | 292 |
+--------------------------------------------+----------------+----------------+
| Provisions | 156 | 153 |
+--------------------------------------------+----------------+----------------+
| Other long-term liabilities | 59 | 58 |
+--------------------------------------------+----------------+----------------+
| | 7,709 | 7,996 |
+--------------------------------------------+----------------+----------------+
| Current liabilities | | |
+--------------------------------------------+----------------+----------------+
| Trade and other payables | 1,058 | 1,479 |
+--------------------------------------------+----------------+----------------+
| Advances from customers | 60 | 107 |
+--------------------------------------------+----------------+----------------+
| Short-term loans and current portion of | 3,937 | 3,922 |
| long-term loans | | |
+--------------------------------------------+----------------+----------------+
| Payables to related parties | 230 | 322 |
+--------------------------------------------+----------------+----------------+
| Income tax payable | 52 | 156 |
+--------------------------------------------+----------------+----------------+
| Other taxes payable | 122 | 154 |
+--------------------------------------------+----------------+----------------+
| Current portion of finance lease | 16 | 15 |
| liabilities | | |
+--------------------------------------------+----------------+----------------+
| Provisions | 33 | 63 |
+--------------------------------------------+----------------+----------------+
| Dividends payable by the parent entity to | - | 309 |
| its shareholders | | |
+--------------------------------------------+----------------+----------------+
| Dividends payable by the Group's | 12 | 11 |
| subsidiaries to minority shareholders | | |
+--------------------------------------------+----------------+----------------+
| | 5,520 | 6,538 |
+--------------------------------------------+----------------+----------------+
| Liabilities directly associated with | 2 | - |
| disposal groups classified as held for | | |
| sale | | |
+--------------------------------------------+----------------+----------------+
| | 5,522 | 6,538 |
+--------------------------------------------+----------------+----------------+
| Total equity and liabilities | 23,115 | 19,451 |
+--------------------------------------------+----------------+----------------+----------------+
* The amounts shown here do not correspond to the financial statements for the
six-month period ended 30 June 2008 and reflect adjustments made in connection
with the completion of initial accounting as detailed in Note 4 to the Unaudited
Interim Condensed Consolidated Financial Statements
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
(In millions of US dollars)
+--------------------------------------------------+----------------+----------------+
| | Six-month period ended 30 June |
+--------------------------------------------------+---------------------------------+
| | 2009 | 2008* |
+--------------------------------------------------+----------------+----------------+
| Cash flows from operating activities | | |
+--------------------------------------------------+----------------+----------------+
| Net profit/(loss) | (999) | 2,039 |
+--------------------------------------------------+----------------+----------------+
| Adjustments to reconcile net profit to net | | |
| cash flows from operating activities: | | |
+--------------------------------------------------+----------------+----------------+
| Depreciation, | 782 | 607 |
| depletion and | | |
| amortisation | | |
+--------------------------------------------------+----------------+----------------+
| Deferred | (354) | (144) |
| income tax | | |
| benefit | | |
+--------------------------------------------------+----------------+----------------+
| (Gain)/loss | 25 | (5) |
| on disposal | | |
| of | | |
| property, | | |
| plant and | | |
| equipment | | |
+--------------------------------------------------+----------------+----------------+
| Impairment | 211 | 2 |
| of assets | | |
+--------------------------------------------------+----------------+----------------+
| Revaluation | 564 | - |
| deficit on | | |
| property, | | |
| plant and | | |
| equipment | | |
+--------------------------------------------------+----------------+----------------+
| Foreign | (68) | 46 |
| exchange | | |
| (gains)/losses, | | |
| net | | |
+--------------------------------------------------+----------------+----------------+
| Share of | 7 | (96) |
| (profits)/losses | | |
| of joint | | |
| ventures and | | |
| associates | | |
+--------------------------------------------------+----------------+----------------+
| (Gain)/loss | (110) | (2) |
| on | | |
| financial | | |
| assets and | | |
| liabilities | | |
+--------------------------------------------------+----------------+----------------+
| Loss on | 3 | 9 |
| disposal | | |
| groups | | |
| classified | | |
| as held | | |
| for sale | | |
+--------------------------------------------------+----------------+----------------+
| Other | 6 | (9) |
| non-operating | | |
| (gains)/losses, | | |
| net | | |
+--------------------------------------------------+----------------+----------------+
| Interest | (27) | (29) |
| income | | |
+--------------------------------------------------+----------------+----------------+
| Interest | 335 | 294 |
| expense | | |
+--------------------------------------------------+----------------+----------------+
| Bad debt | 26 | 2 |
| expense | | |
+--------------------------------------------------+----------------+----------------+
| Share-based | 9 | 4 |
| payments | | |
+--------------------------------------------------+----------------+----------------+
| Changes in | (25) | (7) |
| provisions, | | |
| employee | | |
| benefits | | |
| and other | | |
| long-term | | |
| assets and | | |
| liabilities | | |
+--------------------------------------------------+----------------+----------------+
| | 385 | 2,711 |
+--------------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------------+----------------+----------------+
| Changes in working capital: | | |
+--------------------------------------------------+----------------+----------------+
| Inventories | 778 | (332) |
+--------------------------------------------------+----------------+----------------+
| Trade and | 411 | (62) |
| other | | |
| receivables | | |
+--------------------------------------------------+----------------+----------------+
| Prepayments | (12) | 12 |
+--------------------------------------------------+----------------+----------------+
| Receivables | (99) | 73 |
| from/payables | | |
| to related | | |
| parties | | |
+--------------------------------------------------+----------------+----------------+
| Taxes | 214 | (47) |
| recoverable | | |
+--------------------------------------------------+----------------+----------------+
| Other | (48) | (10) |
| assets | | |
+--------------------------------------------------+----------------+----------------+
| Trade and | (338) | 9 |
| other | | |
| payables | | |
+--------------------------------------------------+----------------+----------------+
| Advances | (40) | (213) |
| from | | |
| customers | | |
+--------------------------------------------------+----------------+----------------+
| Taxes | (126) | 311 |
| payable | | |
+--------------------------------------------------+----------------+----------------+
| Other | (2) | (3) |
| liabilities | | |
+--------------------------------------------------+----------------+----------------+
| Net cash flows from operating | 1,123 | 2,449 |
| activities | | |
+--------------------------------------------------+----------------+----------------+
| Cash flows from investing activities | | |
+--------------------------------------------------+----------------+----------------+
| Issuance of loans receivable | (28) | (59) |
+--------------------------------------------------+----------------+----------------+
| Proceeds from repayment of | 71 | 4 |
| loans receivable, including | | |
| interest | | |
+--------------------------------------------------+----------------+----------------+
| Proceeds from the transaction | 508 | - |
| with a 49% ownership interest | | |
| in NS Group | | |
+--------------------------------------------------+----------------+----------------+
| Purchases of subsidiaries, | - | (1,997) |
| net of cash acquired | | |
+--------------------------------------------------+----------------+----------------+
| Purchases of minority | - | (48) |
| interests | | |
+--------------------------------------------------+----------------+----------------+
| Purchases of other | (3) | (683) |
| investments | | |
+--------------------------------------------------+----------------+----------------+
| Sale of other investments | 2 | - |
+--------------------------------------------------+----------------+----------------+
| Short-term deposits at banks, | 11 | 17 |
| including interest | | |
+--------------------------------------------------+----------------+----------------+
| Purchases of property, plant | (203) | (528) |
| and equipment | | |
+--------------------------------------------------+----------------+----------------+
| Proceeds from disposal of | 5 | 23 |
| property, plant and equipment | | |
+--------------------------------------------------+----------------+----------------+
| Proceeds from sale of | 17 | 55 |
| disposal groups classified as | | |
| held for sale, net of | | |
| transaction costs | | |
+--------------------------------------------------+----------------+----------------+
| Dividends and advances in | - | 50 |
| respect of future dividends | | |
| received | | |
+--------------------------------------------------+----------------+----------------+
| Net cash flows from/(used in) | 380 | (3,166) |
| investing activities | | |
+--------------------------------------------------+----------------+----------------+
| Cash flows from financing activities | | |
+--------------------------------------------------+----------------+----------------+
| Repurchase of vested share options | - | (70) |
+--------------------------------------------------+----------------+----------------+
| Purchase of treasury shares | (3) | (74) |
+--------------------------------------------------+----------------+----------------+
| Sale of treasury shares | 5 | 11 |
+--------------------------------------------------+----------------+----------------+
| Distribution to a shareholder | - | (68) |
+--------------------------------------------------+----------------+----------------+
| Net proceeds from /(repayment of) bank | (727) | 101 |
| overdrafts and credit lines, including | | |
| interest | | |
+--------------------------------------------------+----------------+----------------+
| Proceeds from loans and promissory notes | 763 | 3,018 |
+--------------------------------------------------+----------------+----------------+
| Repayment of loans and promissory notes, | (1,721) | (978) |
| including interest | | |
+--------------------------------------------------+----------------+----------------+
| Repayment of loans and promissory notes, | - | (20) |
| including interest, to related parties | | |
+--------------------------------------------------+----------------+----------------+
| Restricted deposits at banks in respect of | 1 | - |
| financing activities | | |
+--------------------------------------------------+----------------+----------------+
| Dividends paid by the parent entity to its | (90) | (443) |
| shareholders | | |
+--------------------------------------------------+----------------+----------------+
| Dividends paid by the Group's subsidiaries | (1) | (52) |
| to minority shareholders | | |
+--------------------------------------------------+----------------+----------------+
| Payments under finance leases, including | (12) | (11) |
| interest | | |
+--------------------------------------------------+----------------+----------------+
| Payments of restructured liabilities, | - | (110) |
| including interest | | |
+--------------------------------------------------+----------------+----------------+
| Proceeds from sale-leaseback | 10 | - |
+--------------------------------------------------+----------------+----------------+
| Net cash flows from/(used in) financing | (1,775) | 1,304 |
| activities | | |
+--------------------------------------------------+----------------+----------------+
| Effect of foreign exchange rate changes on | 20 | (26) |
| cash and cash equivalents | | |
+--------------------------------------------------+----------------+----------------+
| Net increase/(decrease) in cash and cash | (252) | 561 |
| equivalents | | |
+--------------------------------------------------+----------------+----------------+
| Cash and cash equivalents at beginning of | 930 | 327 |
| period | | |
+--------------------------------------------------+----------------+----------------+
| Cash and cash equivalents at end of period | 678 | 888 |
+--------------------------------------------------+----------------+----------------+
| Supplementary cash flow information: | | |
+--------------------------------------------------+----------------+----------------+
| Cash flows during the period: | | |
+--------------------------------------------------+----------------+----------------+
| Interest paid | (317) | (217) |
+--------------------------------------------------+----------------+----------------+
| Interest received | 15 | 22 |
+--------------------------------------------------+----------------+----------------+
| Income taxes paid | (60) | (691) |
+--------------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------------+----------------+----------------+
| Non-cash transactions: | | |
+--------------------------------------------------+----------------+----------------+
| Loans provided in the form of payments by | - | 816 |
| banks for the subsidiaries acquired by the | | |
| Group | | |
+--------------------------------------------------+----------------+----------------+
| Offset of income tax payable against input | 16 | 8 |
| VAT and other taxes | | |
+--------------------------------------------------+----------------+----------------+
| | | |
+--------------------------------------------------+----------------+----------------+
* The amounts shown here do not correspond to the financial statements for the
six-month period ended 30 June 2008 and reflect adjustments made in connection
with the completion of initial accounting as detailed in Note 4 to the Unaudited
Interim Condensed Consolidated Financial Statements
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UAVVRKBRKRRR
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