TIDMEVR
RNS Number : 0290S
Evraz Group S.A.
02 September 2010
EVRAZ ANNOUNCES INTERIM RESULTS FOR 1H 2010
2 September 2010 - Evraz Group S.A. (LSE: EVR) today announces its unaudited
interim results for the six months ended 30 June 2010.
1H 2010 Highlights:
Financials:
· Consolidated revenue US$6,379 million (+38% vs. 1H 2009)
· Consolidated adjusted EBITDA US$1,154 million (+147%)
· Net loss US$270 million. Without the effects of non-cash and one-off
transactions there would have been a net profit of US$284 million. (See
description of the effects of non-cash and one-off transactions on net result in
Attachment 2)
· Operating cash flow US$744 million
· Total debt US$7,873 million (vs. US$7,923 million as of 31 December 2009)
Steel segment:
· Crude steel production 8.3 million tonnes (+22%)
· Total external steel sales volumes 7.7 million tonnes (+13%)
· Steel segment revenue US$5,796 million (+35%)
Mining segment:
· Iron ore production 8.7 million tonnes (+6%)
· Coking coal (raw coal and concentrate) production 6.8 million tonnes (-21%)
· Steam coal production 3.1 million tonnes(+21%)
· Mining segment revenue US$1,120 million (+72%)
Vanadium segment:
· Primary vanadium production 10,537 tonnes (+22%)
· External vanadium product sales volumes 10,506 tonnes (+41%)
· Vanadium segment revenue US$290 million (+110%)
Corporate developments:
· Successful tender for the licence to develop the Mezhegey coking coal deposit
in March 2010
· Launch of major rail mill modernisation projects
· Commencement of implementation of pulverised coal injection (PCI) technology
at two Russian steel mills
· Sale of ZAO Koksovaya (owner of the licence for Tomusinskaya 5-6 coal
deposit) to Raspadskaya for US$40 million
Financial management:
· RUB15 billion (approx. US$500 million) raised via a Rouble bond issue in
March 2010
· US$1,007 million short-term loan to VEB repaid in May 2010 using the
proceeds from a 5-year US$950 million Gazprombank loan
· US$404 million 4-year loan from Nordea Bank was utilised in July to
replace short-term debt
· AGM held on 17 May 2010 approved the decision not to pay dividends in
respect of 2009
CAPEX:
· CAPEX for 1H 2010 amounted to US$397 million compared with US$203 million
for 1H 2009
· CAPEX for FY2010 is expected to total approximately US$950 million
Alexander Frolov, Chief Executive of Evraz Group, commented:
"During the first half of 2010 we have seen the continuation of a measured
recovery in the global economy which, in turn, has led to an increase in steel
demand across all our key markets. This has allowed us to fully utilise our
steelmaking capacities in Russia and significantly increase the utilisation
rates of our international operations.
"Prices for steel products rose steadily throughout the second half of 2009 and
the first four months of 2010, in line with higher raw material prices, followed
by a correction in May-July of 2010. Group EBITDA margins advanced benefiting in
part from the significant scale of our vertical integration.
"Demand in Russia was driven by an increase in private sector construction
activity as well as Russian government-financed infrastructure projects,
including infrastructure development in preparation for the APEC Summit in the
Far East and the Sochi Olympic Games.
"Export demand is driven by the ongoing growth of developing economies,
particularly in Asia, which represents one of our key markets. Our North
American operations registered notable volume increases driven by strong demand
for pipes to facilitate shale gas exploration projects and construction plate in
relation to infrastructure investment on behalf of local governments.
"Overall our key strategic priorities remain unchanged: cost leadership, an
appropriate level of vertical integration into raw materials, geographic
diversification, a manufacturing focus on infrastructure products and the
extraction of further synergies from our international asset base.
"During the remainder of 2010 our focus will be on driving efficiency gains and
operational improvements. We are embarking on a major reconstruction of our
Russian rail mills which will herald the production of higher margin products,
including the manufacture of 100-metre high-speed rails. The introduction of a
pulverised coal injection project, scheduled for completion in 2012, will
increase our energy efficiency, eliminate the need for natural gas and reduce
our coking coal consumption by almost 20%."
Giacomo Baizini, Evraz Group's Chief Financial Officer, commented:
"Our financial performance, benefiting from the market recovery, showed a
significant improvement during the first half of 2010. This was reflected in a
147% increase in EBITDA compared to the first half of 2009 and was in line with
our guidance despite the market turbulence experienced in May and June.
"Our net loss of US$270 million resulted from two factors impacting our net
result: (a) the adoption last year of the revaluation model of accounting for
property, plant and equipment (the net effect on the net profit in 1H 2010 was
US$416 million); and (b) a number of one-off transactions totalling US$138
million. In the absence of these factors, our net profit for the first half of
2010 would have amounted to US$284 million. The increased depreciation expense
under the revaluation model of accounting will have a negative effect on our net
result in the future, thereby distorting comparison with peers that employ the
cost method of property, plant and equipment valuation. Against this background
we believe that EBITDA will provide a more accurate measure of performance.
"The refinancing of short-term debt through longer-term maturities remains our
priority in terms of financial management. A successful US$500 million
equivalent Rouble bond placement in March 2010 and the refinancing of a US$1
billion short-term debt to VEB through a US$950 million 5-year loan from
Gazprombank reflected the confidence of investors and lenders alike in the
Company's prospects. Our cost of capital continued to decline, reflecting the
improvement in financial and operating results together with more favourable
market conditions. For example, since October 2009 bond yields have fallen from
almost 10% to nearer 7%."
Outlook
Commenting on the outlook for the remainder of 2010 and beyond Mr. Frolov added:
"The wider global economy and, in turn, the steel industry, continue to face
challenges and despite positive price and volume dynamics, the pattern and
resilience of the global economic recovery remain questionable.
"We strongly believe, however, that the quality of Evraz Group's asset base, the
competitive advantages derived from vertical integration and our geographic
breadth leaves the Company, under the stewardship of a highly experienced
management team, well positioned to capitalise on the advent of a sustained
economic upturn."
Mr. Baizini stated:
"Although the general demand trend in our key markets is positive, some
volatility in steel prices and volumes in May-July 2010 have negatively affected
our performance in the third quarter.
"We expect our 3Q 2010 EBITDA to be in the range of US$480-550 million. Assuming
a continuation of the current trends, Evraz is on course to repeat its 1H 2010
performance in 2H 2010.
"We will continue to refinance our short-term maturities through longer-term
instruments. Capital markets are readily available and yields are close to their
historic lows."
+-----------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| (US$ million) | | | |
+-----------------------+------------+------------+------------+
| Revenue | 6,379 | 4,639 | 37.5% |
+-----------------------+------------+------------+------------+
| Adjusted EBITDA 1 | 1,154 | 468 | 146.6% |
+-----------------------+------------+------------+------------+
| Profit/(loss) from | 167 | (1,046) | |
| operations | | | |
+-----------------------+------------+------------+------------+
| Net (loss)/profit | (270)* | (999) | |
+-----------------------+------------+------------+------------+
| (Losses)/earnings per | (0.64) | (2.52) | |
| GDR 2, (US$) | | | |
+-----------------------+------------+------------+------------+
1 Refer to Attachment 1 for reconciliation to profit from operations
2 One share is represented by three GDRs
* Refer to Attachment 2
1H 2010 Results Summary:
Evraz's consolidated revenues for the first six months of 2010 increased by
37.5% to US$6,379 million compared with US$4,639 million for the first six
months of 2009. Steel segment sales accounted for the majority of the increase
in revenues, reflecting the growth in sales volumes and average prices of steel
products. Evraz's external sales volumes of steel products rose from 6.8 million
tonnes in the six months ended 30 June 2009 to 7.7 million tonnes in the six
months ended 30 June 2010.
The increase in steel sales volumes primarily reflects the growth in demand for
construction products in Russia with overall sales on the Russian market
advancing by 0.6 million tonnes compared with 1H 2009. Sales volumes in Ukraine
remained flat. Export sales volumes from the Russian and Ukrainian operations
showed a total decrease of 0.2 million tonnes. Sales volumes of the European and
North American operations increased by 0.2 million and 0.3 million tonnes
respectively, while steel sales volumes of the South African operations showed
no change.
Geographic breakdown of consolidated revenues
+----------+---------+--------+---------+--------+---------+
| | Six months ended 30 June |
+----------+-----------------------------------------------+
| | 2010 | 2009 | 2010 v |
| | | | 2009 |
+----------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+----------+---------+--------+---------+--------+---------+
| Russia | 2,115 | 33.2% | 1,304 | 28.1% | 62.2% |
+----------+---------+--------+---------+--------+---------+
| Americas | 1,522 | 23.9% | 1,354 | 29.2% | 12.4% |
+----------+---------+--------+---------+--------+---------+
| Asia | 1,369 | 21.5% | 1,075 | 23.2% | 27.3% |
+----------+---------+--------+---------+--------+---------+
| Europe | 630 | 9.9% | 507 | 10.9% | 24.3% |
+----------+---------+--------+---------+--------+---------+
| CIS | 490 | 7.7% | 245 | 5.3% | 100.0% |
+----------+---------+--------+---------+--------+---------+
| Africa | 252 | 4.0% | 138 | 3.0% | 82.6% |
+----------+---------+--------+---------+--------+---------+
| Rest | 1 | 0.0% | 16 | 0.3% | (93.8)% |
| of the | | | | | |
| world | | | | | |
+----------+---------+--------+---------+--------+---------+
| Total | 6,379 | 100.0% | 4,639 | 100.0% | 37.5% |
+----------+---------+--------+---------+--------+---------+
Revenues from sales in Russia increased as a proportion of total revenues from
28.1% to 33.2%, driven by the growing demand for construction products on the
Russian market after a decline in 2009.
In 1H 2010, revenues from non-Russian sales rose by 27.9% to US$4,264 million
compared with US$3,335 million in 1H 2009 but decreased as a percentage of total
revenues to 66.8%, compared with 71.9% in 1H 2009.
In the first six months of 2010, the consolidated cost of revenues improved to
83.0% of consolidated revenues, or US$5,296 million compared with 92.6% of
consolidated revenues, or US$4,297 million in the first six months of 2009.
Gross profit rose by 216.7% from US$342 million in 1H 2009 to US$1,083 million
in 1H 2010. This increase in gross profit primarily resulted from a recovery in
steel, mining and vanadium prices following the weak demand that characterised
the principal steel markets in 2009.
Selling, general and administrative (SG&A) expenses as a percentage of
consolidated revenues decreased year-on-year from 12.8% to 11.8%.
The total revaluation deficit on property, plant and equipment amounted to
US$138 million and US$564 million in the six months ended 30 June 2010 and 2009
respectively and related to the application of the revaluation model to the
valuation of certain classes of property, plant and equipment, which resulted in
additional charges recognised in the statement of operations.
Total loss on the disposal of property, plant and equipment in the first six
months of 2010 amounted to US$24 million compared with US$25 million in the
first six months of 2009.
Total impairment of assets amounted to US$38 million in the six months ended 30
June 2010 compared with US$211 million in the same period of 2009. Impairment
was partly attributable to the impairment of goodwill in the amount of US$16
million in the six months ended 30 June 2010 (related to Stratcor) and of US$129
million in the six months ended 30 June 2009 (related to operations in North
America and Ukraine). Evraz also recognised an impairment of assets, other than
goodwill, in the amount of US$22 million and US$82 million in the six months
ended 30 June 2010 and 30 June 2009 respectively, including impairment of
property, plant and equipment of the Group's subsidiaries.
Profit (loss) from operations improved from a loss of US$1,046 million, or
-22.5% of consolidated revenues, for 1H 2009, to a profit of US$167 million, or
2.6% of consolidated revenues, for 1H 2010. The change in profit (loss) from
operations is attributable to the growth in consolidated gross profit margin in
the first six months of 2010.
Consolidated adjusted EBITDA increased by 146.6% to US$1,154 million in the
first half of 2010 compared to US$468 million in the first half of 2009, with
adjusted EBITDA margins of 18.1% and 10.1% respectively.
Interest expense rose 9.9% to US$368 million in the six months to 30 June 2010
compared with US$335 million in the six months to 30 June 2009 due to an
increased interest rate on Group debt that reflected lengthening of average debt
duration.
Loss on disposal of assets held for sale in the six months ended 30 June 2010
amounted to US$52 million, of which US$50 million relate to the disposal of the
Tomusinskaya 5-6 coal mine.
In 1H 2010, income tax expense amounted to US$6 million compared with an income
tax benefit of US$261 million, in 1H 2009. Evraz's effective tax rate, defined
as income tax expense (benefit) as a percentage of profit (loss) before tax,
decreased from an effective tax benefit of 20.7% in the six months of 2009 to a
tax charge of 2.3% in the first six months of 2010.
The net loss attributable to equity holders of Evraz Group in the six months
ended 30 June 2010 was US$267 million compared with a loss of US$987 million in
the six months ended 30 June 2009.
Review of Operations
Steel Segment Results
+------------------------+------------+-------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| (US$ million) | | | |
+------------------------+------------+-------------+------------+
| Revenues* | 5,796 | 4,291 | 35.1% |
+------------------------+------------+-------------+------------+
| Profit/(loss) from | 1 | (882) | N/A |
| operations | | | |
+------------------------+------------+-------------+------------+
| Adjusted EBITDA | 738 | 389 | 89.7% |
+------------------------+------------+-------------+------------+
| Adjusted EBITDA margin | 12.7% | 9.1% | N/A |
+------------------------+------------+-------------+------------+
*Segment revenues include intersegment sales
Steel Segment Sales*
+---------------+---------+--------+---------+--------+--------+
| | Six months ended 30 June |
+---------------+----------------------------------------------+
| | 2010 | 2009 |2010 v |
| | | | 2009 |
+---------------+------------------+------------------+--------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total |change |
+---------------+---------+--------+---------+--------+--------+
| Steel | | | | | |
| products | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Construction | 1,558 | 26.9% | 858 | 20.0% | 81.6% |
| products 1 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Railway | 723 | 12.5% | 579 | 13.5% | 24.9% |
| products | | | | | |
| 2 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Flat-rolled | 969 | 16.7% | 652 | 15.2% | 48.6% |
| products 3 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Tubular | 601 | 10.4% | 634 | 14.8% | (5.2)% |
| products | | | | | |
| 4 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Semi-finished | 1,113 | 19.2% | 964 | 22.5% | 15.5% |
| products 5 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Other | 192 | 3.3% | 107 | 2.5% | 79.4% |
| steel | | | | | |
| products | | | | | |
| 6 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Other | 640 | 11.0% | 497 | 11.6% | 28.8% |
| products | | | | | |
| 7 | | | | | |
+---------------+---------+--------+---------+--------+--------+
| Total | 5,796 | 100.0% | 4,291 | 100.0% | 35.1% |
+---------------+---------+--------+---------+--------+--------+
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 Products Sales Volumes*
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| ('000 tonnes) | | | |
+--------------------------+------------+------------+------------+
| Steel products | | | |
+--------------------------+------------+------------+------------+
| Construction products | 2,475 | 1,838 | 34.7% |
+--------------------------+------------+------------+------------+
| Railway products | 976 | 822 | 18.7% |
+--------------------------+------------+------------+------------+
| Flat-rolled products | 1,306 | 887 | 47.2% |
+--------------------------+------------+------------+------------+
| Tubular products | 436 | 391 | 11.5% |
+--------------------------+------------+------------+------------+
| Semi-finished products | 2,262 | 2,704 | (16.3)% |
+--------------------------+------------+------------+------------+
| Other steel products | 288 | 203 | 41.9% |
+--------------------------+------------+------------+------------+
| Total | 7,743 | 6,845 | 13.1% |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Steel segment revenues increased by 35.1% to US$5,796 million in the first six
months of 2010 compared with US$4,291 million in the first six months of 2009, a
reflection of positive price dynamics for steel products and higher sales
volumes.
The proportion of revenues attributable to sales of construction products
increased as a result of a significant growth in the sales volumes and prices of
construction products in Russia.
The proportion of revenues attributable to sales of railway products decreased
despite an increase in the proportion of volumes, explained by the fact that
prices of railway products, particularly rails in Russia, are relatively more
stable and less affected by steel market price fluctuations.
The proportion of revenues attributable to sales of flat-rolled products
(primarily plates) increased in response to a significant advance in sales
volumes across the Group's North American, European and South African
operations.
The proportion of revenues attributable to sales of tubular products decreased
primarily due to lower sales volumes and prices of large diameter pipes in North
America despite a 12% growth in total sales volumes of tubular products (in
particular of casing and tubing).
The proportion of revenues attributable to sales of semi-finished products
decreased largely due to a re-allocation of sales volumes by the Russian
operations from export markets to the domestic construction sector.
Steel segment sales to the mining segment amounted to US$57 million in the first
half of 2010 compared with US$37 million a year earlier. The increase is
attributable to higher sales prices and volumes.
Revenues from sales in Russia amounted to approximately 33% of steel segment
revenues in the first six months of 2010, compared with 27% in the first six
months of 2009. The increased share of revenues from sales in Russia resulted
from the reallocation of steel volumes from Asian export markets to the Russian
market.
Steel segment cost of revenues improved to 87.6% of steel segment revenues, in
the first six months of 2010, or US$5,075 million, compared with 92.1% of steel
segment revenues, or US$3,953 million, in the first six months of 2009. The
increase in cost of revenue in monetary terms is attributable to a rise of 84.9%
in raw material costs due to significant growth in the prices of all key raw
materials (particularly coking coal and scrap in Russia); increases of
approximately 20% in production volumes of pig iron and crude steel; additional
transportation costs (+38.6%) reflecting a higher average railway tariff in
Russia and greater export sales volumes of steel products from Russia; increased
energy costs (+37.8%) due to expanded production; and enhanced staff costs
(+13%). At the same time, costs of semi-finished products decreased by 39.4% due
to higher volumes of internally-produced slabs used for production of rolled
products within the Group (up by approximately 0.4 million tonnes) and reduced
market purchases of semi-finished products.
In 1H 2010, the steel segment recorded an operating profit of US$1 million,
compared with a loss of US$882 million (-20.6% of steel segment revenues) in the
same period of 2009. The change in the operating profit margin of the steel
segment is attributable to the increase in gross profit margin and the decreased
revaluation deficit on property, plant and equipment in the six months ended 30
June 2010.
Mining Segment Results
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| (US$ million) | | | |
+--------------------------+------------+------------+------------+
| Revenues | 1,120 | 652 | 71.8% |
+--------------------------+------------+------------+------------+
| Profit/(loss) from | 179 | (202) | N/A |
| operations | | | |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA | 390 | 94 | 314.9% |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA margin | 34.8% | 14.4% | N/A |
+--------------------------+------------+------------+------------+
Mining Segment Sales*
+-------------+---------+--------+---------+--------+---------+
| | Six months ended 30 June |
+-------------+-----------------------------------------------+
| | 2010 | 2009 | 2010 v |
| | | | 2009 |
+-------------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+-------------+---------+--------+---------+--------+---------+
| Iron | 581 | 51.9% | 362 | 55.5% | 60.5% |
| ore | | | | | |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Iron | 176 | 15.8% | 115 | 17.7% | 53.0% |
| ore | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Sinter | 162 | 14.5% | 134 | 20.6% | 20.9% |
+-------------+---------+--------+---------+--------+---------+
| Pellets | 210 | 18.9% | 107 | 16.4% | 96.3% |
+-------------+---------+--------+---------+--------+---------+
| Other | 33 | 2.9% | 6 | 0.9% | n/m |
+-------------+---------+--------+---------+--------+---------+
| Coal | 428 | 38.2% | 255 | 39.1% | 67.8% |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Raw | 96 | 8.6% | 67 | 10.3% | 43.3% |
| coking | | | | | |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Coking | 260 | 23.3% | 107 | 16.4% | 143.0% |
| coal | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 66 | 5.9% | 68 | 10.4% | (2.9)% |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 6 | 0.5% | 13 | 2.0% | (53.8)% |
| coal | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Other | 111 | 9.9% | 35 | 5.4% | 217.1% |
| revenues | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Total | 1,120 | 100.0% | 652 | 100.0% | 71.8% |
+-------------+---------+--------+---------+--------+---------+
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| ('000 tonnes) | | | |
+--------------------------+------------+------------+------------+
| Iron ore products | 7,353 | 7,733 | (4.9)% |
+--------------------------+------------+------------+------------+
| Iron ore concentrate | 1,987 | 2,433 | (18.3)% |
+--------------------------+------------+------------+------------+
| Sinter | 2,073 | 2,398 | (13.6)% |
+--------------------------+------------+------------+------------+
| Pellets | 2,716 | 2,625 | 3.5% |
+--------------------------+------------+------------+------------+
| Other | 577 | 277 | 108.3% |
+--------------------------+------------+------------+------------+
| Coal products | 5,105 | 6,127 | (16.7)% |
+--------------------------+------------+------------+------------+
| Raw coking coal | 1,610 | 2,263 | (28.9)% |
+--------------------------+------------+------------+------------+
| Coking coal concentrate | 2,061 | 1,809 | (13.9)% |
+--------------------------+------------+------------+------------+
| Steam coal | 1,359 | 1,864 | (28.7)% |
+--------------------------+------------+------------+------------+
| Steam coal concentrate | 75 | 191 | (60.7)% |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Mining segment revenues rose 71.8% to US$1,120 million in 1H 2010, compared with
US$652 million in 1H 2009, primarily reflecting significant increases in the
market prices of iron ore and coal during the first six months of 2010.
Sales volumes of iron ore products decreased by 4.9% in 1H 2010 compared with 1H
2009. Sales volumes of steam coal products and coking coal products decreased by
30.3% and 9.8% respectively in the six months ended 30 June 2010 compared with
the six months ended 30 June 2009.
In the first six months of 2010 mining segment sales to the steel segment
amounted to US$812 million, or 72.5% of mining segment sales, compared with
US$456 million, or 70.0% of mining segment sales, in the first six months of
2009.
In 1H 2010, Evraz's iron ore requirements were self-covered by approximately 91%
compared with 98% in 1H 2009. Self-coverage in coking coal (including 40% share
of Raspadskaya production) was 84% in 1H 2010 and 117% in 1H 2009. Without the
Raspadskaya share it was 50% and 87% respectively.
Approximately 56% of the mining segment's third party sales in 1H 2010 were to
customers in Russia compared with 47% in 1H 2009. The decrease in the share of
third party sales outside Russia is largely attributable to the decline in
export sales of mining products from Yuzhkuzbassugol and KGOK to Europe.
Vanadium Segment Results
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| (US$ million) | | | |
+--------------------------+------------+------------+------------+
| Revenues | 290 | 138 | 110.1% |
+--------------------------+------------+------------+------------+
| (Loss)/profit from | 35 | (48) | N/A |
| operations | | | |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA | 81 | (34) | N/A |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA margin | 27.9% | (24.6)% | N/A |
+--------------------------+------------+------------+------------+
Vanadium Segment Sales*
+-----------+---------+--------+---------+--------+--------+
| | Six months ended 30 June |
+-----------+----------------------------------------------+
| | 2010 | 2009 |2010 v |
| | | | 2009 |
+-----------+------------------+------------------+--------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total |change |
+-----------+---------+--------+---------+--------+--------+
| Vanadium | 17 | 5.9% | 15 | 10.9% | 13.3% |
| in slag | | | | | |
+-----------+---------+--------+---------+--------+--------+
| Vanadium | 268 | 92.4% | 121 | 87.7% | 121.5% |
| in | | | | | |
| alloys | | | | | |
| and | | | | | |
| chemicals | | | | | |
+-----------+---------+--------+---------+--------+--------+
| Other | 5 | 1.7% | 2 | 1.4% | N/A |
| revenues | | | | | |
+-----------+---------+--------+---------+--------+--------+
| Total | 290 | 100.0% | 138 | 100.0% | 110.1% |
+-----------+---------+--------+---------+--------+--------+
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| ('000 tonnes of pure | | | |
| Vanadium) | | | |
+--------------------------+------------+------------+------------+
| Vanadium products | 10.9 | 7.4 | 47.3% |
+--------------------------+------------+------------+------------+
| Vanadium in slag | 1.4 | 2.3 | (39.1)% |
+--------------------------+------------+------------+------------+
| Vanadium in alloys and | 9.5 | 5.1 | 86.3% |
| chemicals | | | |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Vanadium segment revenues advanced by 110.1% to US$290 million in the first six
months of 2010, compared with US$138 million in the first six months of 2009,
reflecting increased sales volumes and prices of vanadium products. Sales
volumes of the vanadium segment increased from 7.4 thousand tonnes of pure
vanadium in the six months ended 30 June 2009 to 10.9 thousand tonnes of pure
vanadium in the six months ended 30 June 2010. Following the acquisition of
Vanady-Tula in November 2009, revenues from sales of vanadium slag account for
less than 10% of vanadium segment revenues (some of the reported slag sold to
third parties is repurchased in the form of oxides for further processing within
the Group and is subsequently sold as finished products).
Vanadium segment cost of revenues improved to 69.7% of vanadium segment
revenues, or US$202 million, in the first six months of 2010 from 115.2% of
vanadium segment revenues, or US$159 million, in the first six months of 2009.
The increase in monetary terms was primarily attributable to higher sales
volumes and higher prices of raw materials.
Other operations segment results
+--------------------------+------------+------------+------------+
| Six months to 30 June | 2010 | 2009 | Change |
| (US$ million) | | | |
+--------------------------+------------+------------+------------+
| Revenues | 414 | 343 | 20.7% |
+--------------------------+------------+------------+------------+
| Profit from operations | 49 | 25 | 96.0% |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA | 85 | 70 | 21.4% |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA margin | 20.5% | 20.4% | |
+--------------------------+------------+------------+------------+
Evraz's other operations include logistics, port services, power and heat
generation and supporting activities.
Consolidated Group Financial Position
Cash flow
Cash flow from operating activities decreased from US$1,123 million in the first
six months of 2009 to US$744 million in the first six months of 2010. This
decrease was caused by changes in working capital including a release of US$738
million in the first six months of 2009 compared with an increase of US$144
million in the first six months of 2010. The increase in working capital in the
first six months of 2010 was largely driven by the increase in the value of
inventories. Cash provided by operating activities before working capital
adjustments increased from US$385 million in the six months ended 30 June 2009
to US$888 million in the six months ended 30 June 2010.
Net cash used in investing activities totalled US$385 million in 1H 2010
compared with net cash received from investing activities of US$380 million in
1H 2009. Substantially, all the cash used in investing activities related to
purchases of property, plant and equipment.
In 1H 2010, Evraz's capital expenditure totalled US$397 million, including
US$251 million in respect of its steel segment and US$136 million in respect of
its mining segment.
Balance sheet
As of 30 June 2010 total debt amounted to US$7,873 million, largely unchanged
from US$7,923 million as of 31 December 2009. Cash and cash equivalents together
with short-term bank deposits amounted to US$675 million, against US$697 million
as of 31 December 2009. Liquidity, defined as cash and cash equivalents, amounts
available under credit facilities and short-term bank deposits with original
maturity of more than three months, totalled approximately US$1,598 million as
of 30 June 2010 compared with approximately US$1,997 million as of 31 December
2009. (Refer to Attachment 3 for calculation of liquidity)
As of 30 June 2010, Evraz had unutilised borrowing facilities of US$923 million,
including US$430 million of committed facilities and US$493 million of
uncommitted facilities. Committed facilities consisted of credit facilities
available for Russian and North American operations in the amounts of US$334
million and US$95 million respectively. Uncommitted facilities consisted of
revolving credit lines of US$323 million with international banks for export
trade financing at East Metals S.A. and credit facilities available for
European, South African and North American operations.
Evraz's current ratio, defined as current assets divided by current liabilities,
increased from 0.73 as of 30 June 2009 to 1.26 as of 30 June 2010. The increase
in the current ratio primarily resulted from decreases in short-term loans and
the current portion of long-term loans due to repayments and refinancing
activities on the part of management and an increase in working capital.
Net debt decreased to US$7,198 million as of 30 June 2010 compared with US$7,226
million as of 31 December 2009. (Refer to Attachment 4 for calculation of net
debt)
# # #
For further information:
Media contact:
Alex Agoureev
VP, Public Relations
+7 985
122 4822
media@evraz.com
Investor contact:
Alexander Boreyko
Director, Investor Relations
+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, loss/(gain) on disposal of
property, plant and equipment, foreign exchange losses/(gains), deficit on
revaluation of property, plant and equipment. 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. Adjusted EBITDA, due to the exclusion of this expense,
does not reflect Evraz's future cash requirements for these replacements.
Adjusted EBITDA also does not reflect the impact of a loss on disposal of
property, plant and equipment.
Reconciliation of profit (loss) from operations to adjusted EBITDA is as
follows:
+-----------------------------------------+----------+----------+
| |Six months ended 30 |
| | June |
+-----------------------------------------+---------------------+
| | 2010 | 2009 |
+-----------------------------------------+----------+----------+
| | (US$ million) |
+-----------------------------------------+---------------------+
| Consolidated Adjusted EBITDA | |
| reconciliation | |
+-----------------------------------------+---------------------+
| (Loss)/profit from operations | 167 | (1,046) |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation, depletion and | 861 | 782 |
| amortisation | | |
+-----------------------------------------+----------+----------+
| Impairment of assets | 38 | 211 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 24 | 25 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (74) | (68) |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 138 | 564 |
+-----------------------------------------+----------+----------+
| Consolidated Adjusted EBITDA | 1,154 | 468 |
+-----------------------------------------+----------+----------+
| Steel segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | 1 | (882) |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 623 | 571 |
+-----------------------------------------+----------+----------+
| Impairment of assets | 16 | 221 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 11 | 15 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (25) | 40 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 112 | 424 |
+-----------------------------------------+----------+----------+
| Steel segment Adjusted EBITDA | 738 | 389 |
+-----------------------------------------+----------+----------+
| Mining segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | 179 | (202) |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation, depletion and | 185 | 187 |
| amortisation | | |
+-----------------------------------------+----------+----------+
| Impairment of assets | 5 | (11) |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 10 | 7 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (3) | 1 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 14 | 112 |
+-----------------------------------------+----------+----------+
| Mining segment Adjusted EBITDA | 390 | 94 |
| | | |
+-----------------------------------------+----------+----------+
| Vanadium segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | 35 | (48) |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 19 | 8 |
+-----------------------------------------+----------+----------+
| Impairment of assets | 17 | - |
+-----------------------------------------+----------+----------+
| Foreign exchange gain | - | 2 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 10 | 4 |
+-----------------------------------------+----------+----------+
| Vanadium segment Adjusted EBITDA | 81 | (34) |
+-----------------------------------------+----------+----------+
| Other operations Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| Profit from operations | 49 | 25 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 33 | 15 |
+-----------------------------------------+----------+----------+
| Impairment of assets | - | 1 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 3 | 3 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss | (2) | 2 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 2 | 24 |
+-----------------------------------------+----------+----------+
| Other operations Adjusted EBITDA | 85 | 70 |
| | | |
+-----------------------------------------+----------+----------+
Attachment 2
Reconciliation of the reported net loss to net result without the effects of
non-cash and one-off transactions:
+------------------------------------------------------+-----------+
| | Six |
| | months |
| | ended 30 |
| |June 2009 |
+------------------------------------------------------+-----------+
| Net loss | (270) |
+------------------------------------------------------+-----------+
| Add: | |
+------------------------------------------------------+-----------+
| Additional depreciation (revaluation vs. cost model | 316 |
| of accounting) | |
+------------------------------------------------------+-----------+
| Revaluation deficit on property, plant and equipment | 98 |
+------------------------------------------------------+-----------+
| Additional impairment | 2 |
+------------------------------------------------------+-----------+
| Sale of Koksovaya to Raspadskaya | 50 |
+------------------------------------------------------+-----------+
| Impairment of Stratcor | 17 |
+------------------------------------------------------+-----------+
| Fair value of cross-currency swaps | 19 |
+------------------------------------------------------+-----------+
| Fair value of Delong shares | 18 |
+------------------------------------------------------+-----------+
| Impairment of steelmaking equipment | 16 |
+------------------------------------------------------+-----------+
| Impairment of investments in scrap business | 18 |
+------------------------------------------------------+-----------+
| Net profit without the above-mentioned effects | 284 |
+------------------------------------------------------+-----------+
Attachment 3
Liquidity
+--------------------------------------------+----------+--+------------+
| | 30 June | 31 December |
| | 2010 | 2009 |
+--------------------------------------------+----------+---------------+
| | (US$ million) |
+--------------------------------------------+--------------------------+
| Liquidity Calculation | |
+--------------------------------------------+--------------------------+
| Cash and cash equivalents | 654 | 675 |
+--------------------------------------------+-------------+------------+
| Amounts available under credit facilities | 923 | 1,300 |
+--------------------------------------------+-------------+------------+
| Short-term bank deposits | 21 | 22 |
+--------------------------------------------+-------------+------------+
| Total estimated liquidity | 1,598 | 1,997 |
+--------------------------------------------+-------------+------------+
| | | | |
+--------------------------------------------+----------+--+------------+
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:
+--------------------------------------------+----------+--+------------+
| | 30 June | 31 December |
| | 2010 | 2009 |
+--------------------------------------------+----------+---------------+
| | (US$ million) |
+--------------------------------------------+--------------------------+
| Net Debt Calculation | |
+--------------------------------------------+--------------------------+
| Add: | | |
+--------------------------------------------+-------------+------------+
| Long-term loans, net of current portion | 6,133 | 5,931 |
| | | |
+--------------------------------------------+-------------+------------+
| Short-term loans and current portion of | 1,740 | 1,992 |
| long-term loans | | |
+--------------------------------------------+-------------+------------+
| Less: | | |
+--------------------------------------------+-------------+------------+
| Short-term bank deposits | (21) | (22) |
+--------------------------------------------+-------------+------------+
| Cash and cash equivalents | (654) | (675) |
+--------------------------------------------+-------------+------------+
| Net Debt | 7,198 | 7,226 |
+--------------------------------------------+-------------+------------+
| | | | |
+--------------------------------------------+----------+--+------------+
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 |
+-------------------------------------+---------------------------+
| | 2010 | 2009 |
+-------------------------------------+-------------+-------------+
| Revenue | | |
+-------------------------------------+-------------+-------------+
| Sale of goods | 6,256 | 4,485 |
+-------------------------------------+-------------+-------------+
| Rendering of services | 123 | 154 |
+-------------------------------------+-------------+-------------+
| | 6,379 | 4,639 |
+-------------------------------------+-------------+-------------+
| Cost of revenue | (5,296) | (4,297) |
+-------------------------------------+-------------+-------------+
| Gross profit | 1,083 | 342 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Selling and distribution costs | (375) | (284) |
+-------------------------------------+-------------+-------------+
| General and administrative expenses | (375) | (311) |
+-------------------------------------+-------------+-------------+
| Social and social infrastructure | (33) | (17) |
| maintenance expenses | | |
+-------------------------------------+-------------+-------------+
| Gain/(loss) on disposal of | (24) | (25) |
| property, plant and equipment | | |
+-------------------------------------+-------------+-------------+
| Impairment of assets | (38) | (211) |
+-------------------------------------+-------------+-------------+
| Revaluation deficit on property, | (138) | (564) |
| plant and equipment | | |
+-------------------------------------+-------------+-------------+
| Foreign exchange gains/(losses), | 74 | 68 |
| net | | |
+-------------------------------------+-------------+-------------+
| Other operating income | 19 | 13 |
+-------------------------------------+-------------+-------------+
| Other operating expenses | (26) | (57) |
+-------------------------------------+-------------+-------------+
| Profit/(loss) from operations | 167 | (1,046) |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Interest income | 5 | 27 |
+-------------------------------------+-------------+-------------+
| Interest expense | (368) | (335) |
+-------------------------------------+-------------+-------------+
| Share of profits/(losses) of joint | 22 | (7) |
| ventures and associates | | |
+-------------------------------------+-------------+-------------+
| Gain/(loss) on financial assets and | (37) | 110 |
| liabilities | | |
+-------------------------------------+-------------+-------------+
| Loss on disposal groups classified | (52) | (3) |
| as held for sale | | |
+-------------------------------------+-------------+-------------+
| Other non-operating gains/(losses), | (1) | (6) |
| net | | |
+-------------------------------------+-------------+-------------+
| Profit/(loss) before tax | (264) | (1,260) |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Income tax benefit/(expense) | (6) | 261 |
+-------------------------------------+-------------+-------------+
| Net profit/(loss) | (270) | (999) |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Attributable to: | | |
+-------------------------------------+-------------+-------------+
| Equity holders of the parent entity | (267) | (987) |
+-------------------------------------+-------------+-------------+
| Non-controlling interests | (3) | (12) |
+-------------------------------------+-------------+-------------+
| | (270) | (999) |
+-------------------------------------+-------------+-------------+
| Earnings/(losses) per share: | | |
+-------------------------------------+-------------+-------------+
| basic, for profit attributable to | (1.93) | (7.55) |
| equity holders of the parent | | |
| entity, US dollars | | |
+-------------------------------------+-------------+-------------+
| diluted, for profit attributable to | (1.93) | (7.55) |
| equity holders of the parent | | |
| entity, US dollars | | |
+-------------------------------------+-------------+-------------+
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Comprehensive Income
(In millions of US dollars)
+-------------------------------------+-------------+-------------+
| | Six-month period ended |
| | 30 June |
+-------------------------------------+---------------------------+
| | 2010 | 2009 |
+-------------------------------------+-------------+-------------+
| Net profit/(loss) | (270) | (999) |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Other comprehensive income | | |
+-------------------------------------+-------------+-------------+
| Effect of translation to | (501) | (465) |
| presentation currency | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Net gains/(losses) on | (22) | 20 |
| available-for-sale financial assets | | |
+-------------------------------------+-------------+-------------+
| Net (gains)/losses on | 18 | - |
| available-for-sale financial assets | | |
| reclassified to profit or loss | | |
+-------------------------------------+-------------+-------------+
| Income tax effect | - | (2) |
+-------------------------------------+-------------+-------------+
| | (4) | 18 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Surplus on revaluation of property, | 2,087 | 7,901 |
| plant and equipment of the Group's | | |
| subsidiaries | | |
+-------------------------------------+-------------+-------------+
| Deficit on revaluation of property, | (1,026) | (38) |
| plant and equipment recognised in | | |
| other comprehensive income | | |
+-------------------------------------+-------------+-------------+
| Decrease in revaluation surplus in | (38) | (45) |
| connection with the impairment of | | |
| property, plant and equipment | | |
+-------------------------------------+-------------+-------------+
| Income tax effect | (212) | (1,656) |
+-------------------------------------+-------------+-------------+
| | 811 | 6,162 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Surplus on revaluation of property, | 19 | 66 |
| plant and equipment of the Group's | | |
| joint ventures and associates | | |
+-------------------------------------+-------------+-------------+
| Effect of translation to | (23) | (37) |
| presentation currency | | |
+-------------------------------------+-------------+-------------+
| Share of other comprehensive income | (4) | 29 |
| of joint ventures and associates | | |
| accounted for using the equity | | |
| method | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Total other comprehensive | 302 | 5,744 |
| income/(loss) | | |
+-------------------------------------+-------------+-------------+
| Total comprehensive income/(loss), | 32 | 4,745 |
| net of tax | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Attributable to: | | |
+-------------------------------------+-------------+-------------+
| Equity holders of the parent entity | 30 | 4,680 |
+-------------------------------------+-------------+-------------+
| Non-controlling interests | 2 | 65 |
+-------------------------------------+-------------+-------------+
| | 32 | 4,745 |
+-------------------------------------+-------------+-------------+
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Financial Position
(In millions of US dollars)
+-------------------------------------+-------------+-------------+
| | 30 June | 31 December |
| | 2010 | 2009 |
+-------------------------------------+-------------+-------------+
| Assets | | |
+-------------------------------------+-------------+-------------+
| Non-current assets | | |
+-------------------------------------+-------------+-------------+
| Property, plant and equipment | 14,736 | 14,941 |
+-------------------------------------+-------------+-------------+
| Intangible assets other than | 1,016 | 1,098 |
| goodwill | | |
+-------------------------------------+-------------+-------------+
| Goodwill | 2,165 | 2,211 |
+-------------------------------------+-------------+-------------+
| Investments in joint ventures and | 738 | 687 |
| associates | | |
+-------------------------------------+-------------+-------------+
| Deferred income tax assets | 35 | 40 |
+-------------------------------------+-------------+-------------+
| Other non-current financial assets | 91 | 66 |
+-------------------------------------+-------------+-------------+
| Other non-current assets | 161 | 128 |
+-------------------------------------+-------------+-------------+
| | 18,942 | 19,171 |
+-------------------------------------+-------------+-------------+
| Current assets | | |
+-------------------------------------+-------------+-------------+
| Inventories | 2,042 | 1,886 |
+-------------------------------------+-------------+-------------+
| Trade and other receivables | 1,229 | 1,001 |
+-------------------------------------+-------------+-------------+
| Prepayments | 132 | 134 |
+-------------------------------------+-------------+-------------+
| Receivables from related parties | 68 | 107 |
+-------------------------------------+-------------+-------------+
| Income tax receivable | 23 | 58 |
+-------------------------------------+-------------+-------------+
| Other taxes recoverable | 262 | 258 |
+-------------------------------------+-------------+-------------+
| Other current assets | 76 | 121 |
+-------------------------------------+-------------+-------------+
| Cash and cash equivalents | 654 | 675 |
+-------------------------------------+-------------+-------------+
| | 4,486 | 4,240 |
+-------------------------------------+-------------+-------------+
| Assets of disposal groups | 113 | 13 |
| classified as held for sale | | |
+-------------------------------------+-------------+-------------+
| | 4,599 | 4,253 |
+-------------------------------------+-------------+-------------+
| Total assets | 23,541 | 23,424 |
+-------------------------------------+-------------+-------------+
| Equity and liabilities | | |
+-------------------------------------+-------------+-------------+
| Equity | | |
+-------------------------------------+-------------+-------------+
| Equity attributable to equity | | |
| holders of the parent entity | | |
+-------------------------------------+-------------+-------------+
| Issued capital | 375 | 375 |
+-------------------------------------+-------------+-------------+
| Additional paid-in capital | 1,739 | 1,739 |
+-------------------------------------+-------------+-------------+
| Revaluation surplus | 7,059 | 6,338 |
+-------------------------------------+-------------+-------------+
| Legal reserve | 36 | 36 |
+-------------------------------------+-------------+-------------+
| Unrealised gains and losses | - | 4 |
+-------------------------------------+-------------+-------------+
| Accumulated profits | 2,990 | 3,164 |
+-------------------------------------+-------------+-------------+
| Translation difference | (1,887) | (1,372) |
+-------------------------------------+-------------+-------------+
| | 10,312 | 10,284 |
+-------------------------------------+-------------+-------------+
| Non-controlling interests | 319 | 324 |
+-------------------------------------+-------------+-------------+
| | 10,631 | 10,608 |
+-------------------------------------+-------------+-------------+
| Non-current liabilities | | |
+-------------------------------------+-------------+-------------+
| Long-term loans | 6,133 | 5,931 |
+-------------------------------------+-------------+-------------+
| Deferred income tax liabilities | 2,526 | 2,537 |
+-------------------------------------+-------------+-------------+
| Finance lease liabilities | 47 | 58 |
+-------------------------------------+-------------+-------------+
| Employee benefits | 289 | 307 |
+-------------------------------------+-------------+-------------+
| Provisions | 180 | 176 |
+-------------------------------------+-------------+-------------+
| Other long-term liabilities | 87 | 68 |
+-------------------------------------+-------------+-------------+
| | 9,262 | 9,077 |
+-------------------------------------+-------------+-------------+
| Current liabilities | | |
+-------------------------------------+-------------+-------------+
| Trade and other payables | 1,174 | 1,069 |
+-------------------------------------+-------------+-------------+
| Advances from customers | 70 | 112 |
+-------------------------------------+-------------+-------------+
| Short-term loans and current | 1,740 | 1,992 |
| portion of long-term loans | | |
+-------------------------------------+-------------+-------------+
| Payables to related parties | 231 | 235 |
+-------------------------------------+-------------+-------------+
| Income tax payable | 130 | 108 |
+-------------------------------------+-------------+-------------+
| Other taxes payable | 185 | 140 |
+-------------------------------------+-------------+-------------+
| Current portion of finance lease | 16 | 17 |
| liabilities | | |
+-------------------------------------+-------------+-------------+
| Provisions | 38 | 35 |
+-------------------------------------+-------------+-------------+
| Amounts payable under put options | 4 | |
| for shares of subsidiaries | | 17 |
+-------------------------------------+-------------+-------------+
| Dividends payable by the Group's | 12 | 13 |
| subsidiaries to non-controlling | | |
| shareholders | | |
+-------------------------------------+-------------+-------------+
| | 3,600 | 3,738 |
+-------------------------------------+-------------+-------------+
| Liabilities directly associated | 48 | 1 |
| with disposal groups classified as | | |
| held for sale | | |
+-------------------------------------+-------------+-------------+
| | 3,648 | 3,739 |
+-------------------------------------+-------------+-------------+
| Total equity and liabilities | 23,541 | 23,424 |
+-------------------------------------+-------------+-------------+
Evraz Group S.A.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
(In millions of US dollars)
+--------------------------------------+--------------+--------------+
| | Six-month period ended |
| | 30 June |
+--------------------------------------+-----------------------------+
| | 2010 | 2009 |
+--------------------------------------+--------------+--------------+
| Cash flows from operating activities | | |
+--------------------------------------+--------------+--------------+
| Net profit/(loss) | (270) | (999) |
+--------------------------------------+--------------+--------------+
| Adjustments to reconcile net | | |
| profit/(loss) to net cash flows from | | |
| operating activities: | | |
+--------------------------------------+--------------+--------------+
| Deferred income tax benefit | (209) | (354) |
+--------------------------------------+--------------+--------------+
| Depreciation, depletion and | 861 | 782 |
| amortisation | | |
+--------------------------------------+--------------+--------------+
| (Gain)/loss on disposal of property, | 24 | 25 |
| plant and equipment | | |
+--------------------------------------+--------------+--------------+
| Impairment of assets | 38 | 211 |
+--------------------------------------+--------------+--------------+
| Revaluation deficit on property, | 138 | 564 |
| plant and equipment | | |
+--------------------------------------+--------------+--------------+
| Foreign exchange (gains)/losses, net | (74) | (68) |
+--------------------------------------+--------------+--------------+
| Interest income | (5) | (27) |
+--------------------------------------+--------------+--------------+
| Interest expense | 368 | 335 |
+--------------------------------------+--------------+--------------+
| Share of (profits)/losses of joint | (22) | 7 |
| ventures and associates | | |
+--------------------------------------+--------------+--------------+
| (Gain)/loss on financial assets and | 37 | (110) |
| liabilities | | |
+--------------------------------------+--------------+--------------+
| Loss on disposal groups classified | 52 | 3 |
| as held for sale | | |
+--------------------------------------+--------------+--------------+
| Other non-operating (gains)/losses, | 1 | 6 |
| net | | |
+--------------------------------------+--------------+--------------+
| Bad debt expense | 19 | 26 |
+--------------------------------------+--------------+--------------+
| Changes in provisions, employee | (67) | (25) |
| benefits and other long-term assets | | |
| and liabilities | | |
+--------------------------------------+--------------+--------------+
| Expense arising from the share | - | 9 |
| option plans | | |
+--------------------------------------+--------------+--------------+
| Share-based payments under | (3) | - |
| cash-settled award | | |
+--------------------------------------+--------------+--------------+
| | 888 | 385 |
+--------------------------------------+--------------+--------------+
| | | |
+--------------------------------------+--------------+--------------+
| Changes in working capital: | | |
+--------------------------------------+--------------+--------------+
| Inventories | (220) | 778 |
+--------------------------------------+--------------+--------------+
| Trade and other receivables | (289) | 411 |
+--------------------------------------+--------------+--------------+
| Prepayments | (2) | (12) |
+--------------------------------------+--------------+--------------+
| Receivables from/payables to related | - | (99) |
| parties | | |
+--------------------------------------+--------------+--------------+
| Taxes recoverable | 89 | 214 |
+--------------------------------------+--------------+--------------+
| Other assets | 38 | (48) |
+--------------------------------------+--------------+--------------+
| Trade and other payables | 205 | (338) |
+--------------------------------------+--------------+--------------+
| Advances from customers | (39) | (40) |
+--------------------------------------+--------------+--------------+
| Taxes payable | 76 | (126) |
+--------------------------------------+--------------+--------------+
| Other liabilities | (2) | (2) |
+--------------------------------------+--------------+--------------+
| Net cash flows from operating | 744 | 1,123 |
| activities | | |
+--------------------------------------+--------------+--------------+
| Cash flows from investing activities | | |
+--------------------------------------+--------------+--------------+
| Issuance of loans receivable to | (46) | - |
| related parties | | |
+--------------------------------------+--------------+--------------+
| Proceeds from repayment of loans | 5 | - |
| issued to related parties, including | | |
| interest | | |
+--------------------------------------+--------------+--------------+
| Issuance of loans receivable | - | (28) |
+--------------------------------------+--------------+--------------+
| Proceeds from repayment of loans | 1 | 71 |
| receivable, including interest | | |
+--------------------------------------+--------------+--------------+
| Proceeds from the transaction with a | - | 508 |
| 49% ownership interest in NS Group | | |
+--------------------------------------+--------------+--------------+
| Purchases of subsidiaries, net of | (17) | - |
| cash acquired | | |
+--------------------------------------+--------------+--------------+
| Purchases of other investments | - | (3) |
+--------------------------------------+--------------+--------------+
| Sale of other investments | - | 2 |
+--------------------------------------+--------------+--------------+
| Restricted deposits at banks in | 16 | - |
| respect of investing activities | | |
+--------------------------------------+--------------+--------------+
| Short-term deposits at banks, | 4 | 11 |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Purchases of property, plant and | (397) | (203) |
| equipment and intangible assets | | |
+--------------------------------------+--------------+--------------+
| Proceeds from disposal of property, | 7 | 5 |
| plant and equipment | | |
+--------------------------------------+--------------+--------------+
| Proceeds from sale of disposal | 41 | 17 |
| groups classified as held for sale, | | |
| net of transaction costs | | |
+--------------------------------------+--------------+--------------+
| Other investing activities, net | 1 | - |
+--------------------------------------+--------------+--------------+
| Net cash flows from/(used in) | (385) | 380 |
| investing activities | | |
+--------------------------------------+--------------+--------------+
| Cash flows from financing activities | | |
+--------------------------------------+--------------+--------------+
| Purchase of treasury shares | - | (3) |
+--------------------------------------+--------------+--------------+
| Sale of treasury shares | - | 5 |
+--------------------------------------+--------------+--------------+
| Net proceeds from/(repayment of)bank | 126 | (727) |
| overdrafts and credit lines, | | |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Proceeds from loans and promissory | 1,930 | 763 |
| notes | | |
+--------------------------------------+--------------+--------------+
| Repayment of loans and promissory | (2,344) | (1,721) |
| notes, including interest | | |
+--------------------------------------+--------------+--------------+
| Gain on derivatives not designated | 11 | - |
| as hedging instruments | | |
+--------------------------------------+--------------+--------------+
| Payments under covenants reset | (15) | - |
+--------------------------------------+--------------+--------------+
| Restricted deposits at banks in | - | 1 |
| respect of financing activities | | |
+--------------------------------------+--------------+--------------+
| Dividends paid by the parent entity | - | (90) |
| to its shareholders | | |
+--------------------------------------+--------------+--------------+
| Dividends paid by the Group's | - | (1) |
| subsidiaries to non-controlling | | |
| shareholders | | |
+--------------------------------------+--------------+--------------+
| Payments under finance leases, | (12) | (12) |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Proceeds from sale-leaseback | - | 10 |
+--------------------------------------+--------------+--------------+
| Net cash flows from/(used in) | (304) | (1,775) |
| financing activities | | |
+--------------------------------------+--------------+--------------+
| Effect of foreign exchange rate | (55) | 20 |
| changes on cash and cash equivalents | | |
+--------------------------------------+--------------+--------------+
| Net increase/(decrease) in cash and | - | (252) |
| cash equivalents | | |
+--------------------------------------+--------------+--------------+
| Cash of disposal groups classified | (21) | - |
| as held for sale | | |
+--------------------------------------+--------------+--------------+
| Cash and cash equivalents at | 675 | 930 |
| beginning of period | | |
+--------------------------------------+--------------+--------------+
| Cash and cash equivalents at end of | 654 | 678 |
| period | | |
+--------------------------------------+--------------+--------------+
| Supplementary cash flow information: | | |
+--------------------------------------+--------------+--------------+
| Cash flows during the period: | | |
+--------------------------------------+--------------+--------------+
| Interest paid | (293) | (317) |
+--------------------------------------+--------------+--------------+
| Interest received | 5 | 15 |
+--------------------------------------+--------------+--------------+
| Income taxes paid | (101) | (60) |
+--------------------------------------+--------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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