TIDMEVR
RNS Number : 6221Z
Evraz Group S.A.
18 January 2011
EVRAZ GROUP 4Q 2010 and FY 2010 OPERATIONAL RESULTS
18 January 2011 - Evraz Group S.A. (LSE: EVR) today released its
operational results for the fourth quarter of 2010 and full year
2010.
HIGHLIGHTS:
-- Production of steel and major rolled products recovered in
4Q10 following the completion of scheduled maintenance at Evraz's
Russian steel mills in 3Q10.
-- Pricing for major product groups generally increased or
remained flat reflecting the gradual recovery in all the world
markets.
-- Coking coal production recovered in 4Q10 and increased 36.7%
compared to the previous quarter.
-- Despite positive pricing and production trends, our 4Q10
EBITDA guidance remains unchanged since the 3Q10 trading update due
to an increase in certain cost items, both seasonal (energy), and
non-seasonal (staff costs, rising costs of raw materials).
STEEL
The output of finished products increased by 15-35% depending on
product category in 2010 compared with 2009, reflecting demand
recovery across the key markets.
As the Russian steel mills were fully utilised in 2010, the
growing demand for finished products was met by reducing saleable
semi-finished steel volumes by 28.4%.
Russia
Production of semi-finished products in 2010 compared to 2009
declined 8.3% in favour of higher margin products as a result of a
continuing recovery in the Russian market. In particular,
construction products production went up by 11.0% and railway
products output by 27.0%, year-on-year.
In 4Q10 the semi-finished products output went up 4.9% against
the previous quarter after completion of repairs of major
production units, including blast furnace No 1, at Zapsib.
Ukraine
Meeting demand growth, DMZ produced 22.4% and 22.1% more steel
and rolled products respectively and 73% less saleable pig iron in
4Q10 compared to 3Q10. The output of construction products
increased by 22.8% and export billets by 33.5%,
quarter-on-quarter.
Europe
In mid-November 2010, following the signing of an agreement with
a hot metal supplier, Evraz re-launched steel production at its
Czech subsidiary, Evraz Vitkovice Steel, which had been idle since
July 2010. The facility has produced 93,000 tonnes of steel in the
month and a half since its re-launch.
Flat-rolled product production declined by 7.3% in 4Q10 compared
to 3Q10 because of an overhaul of the plate mill at Evraz Vitkovice
Steel.
North America
Growth in finished goodsproduction volumes was driven by demand
recovery in the US and Canada, and the overall strengthening of the
North American market. Production of rails grew by 24.1% compared
to 3Q10. The rise in rail production was achieved in order to
support increased sales efforts at a time when infrastructure
spending in rail is increasing. Production of tubular goods was
driven by sustainable market demand, in particular for casing and
tubing used in shale gas exploration projects. In 4Q10 production
of flat-rolled products decreased by 5.6% compared to 3Q10 due to
optimisation of inventory.
South Africa
The domestic market remains depressed with total rolled products
production volumes staying flat in 4Q10 compared to the previous
quarter. Lower output of construction (-6.9%) and flat-rolled
products (-20.7%) in 4Q10 was compensated by a 277.9% increase in
export billets volumes.
MINING
Coking Coal
Coking coal production at Yuzhkuzbassugol grew by 36.7% against
3Q10 as 4Q10 was largely devoid of the significant negative
exceptional factors of the previous two quarters.
Steam Coal
Raw steam coal production was lower in 4Q10 compared to 3Q10
because of the equipment remounting at the Gramoteinskaya mine
which has been taking place since September, and a temporary
shutdown of the Tagaryshskaya mine for a safety inspection.
VANADIUM
Consolidated production of vanadium slag increased by 8.1% in
2010 vs. 2009 and remained marginally flat in 4Q10 compared to the
previous quarter. Vanadium slag output rose in South Africa as old
slag crushing capacities were recommissioned at Evraz Highveld
Steel and Vanadium in 4Q10. The decrease in production in Russia,
by 6.2% year-on-year and by 16.8% in 4Q10 against 3Q10, was due to
decreased steel production at the NTMK steel mill resulting from
the converter shop modernisation.
Production of ferrovanadium rose 68.2% in 2010 compared to 2009
following acquisition of Vanady-Tula, a vanadium refinery located
in Russia, in November 2009. The production of ferrovanadium at the
Group's own facilities exhibited growth of 149.2%, year-on-year,
and 9.7% in 4Q10 as aqainst 3Q10.
* * *
Please note that the total volume of rolled steel products in
the table below excludes those re-rolled at other Group's mills.
These volumes are eliminated as intercompany sales for purposes of
Evraz's consolidated operating results.
PRODUCTION VOLUMES
Product, '000 tonnes 2010/ 4Q 2010/
unless 2009, 4Q 3Q 3Q 2010,
otherwise stated 2010 2009 change 2010 2010 change
Steel products
Coke (saleable) 1,823 1,744 4.6% 396 363 9.1%
Pig iron 11,918 11,256 5.9% 2,889 2,944 (1.9)%
Pig iron
(saleable) 145 111 30.5% 32 73 (55.7)%
Crude steel 16,291 15,284 6.6% 4,145 3,868 7.2%
Rolled products, net
of re-rolled volumes 14,665 14,275 2.7% 3,727 3,537 5.4%
Semi-finished
products 3,736 5,216 (28.4)% 931 805 15.5%
Construction
products 4,938 4,284 15.3% 1,301 1,229 5.8%
Railway products 1,889 1,558 21.3% 466 448 4.1%
Flat-rolled
products 2,534 2,050 23.6% 599 646 (7.4)%
Tubular products 903 673 34.2% 259 235 10.0%
Other steel
products 666 495 34.7% 173 174 (0.5)%
Russia
Coke (saleable) 669 671 (0.3)% 126 124 1.5%
Pig iron 10,221 9,632 6.1% 2,462 2,499 (1.5)%
Pig iron
(saleable) 67 104 (35.7)% 17 15 11.5%
Crude steel 11,954 11,278 6.0% 3,024 2,917 3.7%
Rolled products, net
of re-rolled volumes 10,856 10,415 4.2% 2,757 2,648 4.1%
Semi-finished
products 4,656 5,080 (8.3)% 1,162 1,107 4.9%
Construction
products 3,823 3,445 11.0% 1,020 967 5.6%
Railway products 1,493 1,175 27.0% 349 353 (1.3)%
Flat-rolled
products 314 269 16.8% 77 75 3.1%
Other steel
products 571 446 27.9% 148 146 1.8%
Ukraine
Coke (saleable) 1,155 1,073 7.6% 270 239 13.0%
Pig iron 920 963 (4.4)% 219 231 (5.3)%
Pig iron
(saleable) 79 8 n/a 16 58 (73.0)%
Crude steel 884 975 (9.3)% 218 178 22.4%
Rolled products 784 886 (11.5)% 192 157 22.1%
Semi-finished
products 331 625 (47.0)% 59 44 33.5%
Construction
products 409 248 65.1% 120 98 22.8%
Other steel
products 43 13 243.0% 13 15 (16.0)%
Europe
Crude steel 354 481 (26.5)% 93 0 n/a
Rolled products 1,160 942 23.2% 283 299 (5.4)%
Construction
products 145 98 47.7% 31 29 8.5%
Flat-rolled
products 993 823 20.6% 247 266 (7.3)%
Other steel
products 22 20 7.2% 5 4 17.9%
North America
Crude steel 2,317 1,851 25.2% 598 560 6.8%
Rolled products, net
of re-rolled volumes 2,563 2,046 25.2% 668 638 4.7%
Construction
products 380 335 13.6% 89 93 (4.3)%
Railway products 396 382 3.7% 117 94 24.1%
Flat-rolled
products 883 656 34.6% 203 215 (5.6)%
Tubular products 903 673 34.2% 259 235 10.0%
South Africa
Pig iron 777 661 17.6% 209 214 (2.5)%
Crude steel 783 699 12.0% 212 213 (0.6)%
Rolled products 590 602 (2.0)% 146 149 (1.8)%
Semi-finished
products 35 126 (71.8)% 28 7 277.9%
Construction
products 180 158 13.6% 40 43 (6.9)%
Flat-rolled
products 344 302 13.9% 71 90 (20.7)%
Other steel
products 30 16 94.1% 7 9 (19.8)%
Mining products
Iron ore
Lumpy ore
(Ukraine) 2,044 1,678 21.8% 756 570 32.7%
Concentrate,
saleable
(Russia) 5,822 5,648 3.1% 1,472 1,458 1.0%
Sinter (Russia) 3,999 4,077 (1.9)% 940 937 0.3%
Pellets (Russia) 5,616 5,515 1.8% 1,499 1,424 5.3%
Fines ore (South
Africa) 601 490 22.6% 152 137 11.2%
Lumpy ore (South
Africa) 1,723 1,357 27.0% 391 455 (14.0)%
Coal
Coking coal
(mined) 7,509 10,300 (27.1)% 2,226 1,628 36.7%
Steam coal (mined) 3,830 4,146 (7.6)% 518 961 (46.1)%
Concentrate
(production) 6,768 6,914 (2.1)% 1,808 1,585 14.1%
Steam concentrate
(production) 1,503 1,043 44.0% 197 514 (61.6)%
Vanadium products
(tonnes of V)
Vanadium in slag
(gross production) 20,969 19,403 8.1% 5,243 5,188 1.1%
Russia 12,293 13,106 (6.2)% 2,590 3,112 (16.8)%
South Africa 8,676 6,297 37.8% 2,653 2,076 27.8%
Vanadium in final
products (saleable)
Ferrovanadium 13,507 8,029 68.2% 3,018 3,092 (2.4)%
Produced at own
facilities 5,252 2,107 149.2% 1,268 1,156 9.7%
Processed at 3
parties'
facilities 8,255 5,922 39.4% 1,750 1,936 (9.6)%
Nitrovan(R) 2,408 1,724 39.7% 493 602 (18.1)%
Oxides, vanadium
aluminium and
chemicals 1,317 976 34.9% 350 361 (3.0)%
Equity investments
Raspadskaya
Coking coal
(mined) 7,160 10,559 (32.2)% 1,274 1,108 14.9%
-- All information on production volumes of the enterprises
presented in the press release concerns only the period of their
operation within Evraz Group.
-- Numbers may not add to totals due to rounding. Percent
changes based on numbers prior to rounding.
1 Total production by the Mapochs mine (structurally a division
of Highveld) includes both production of lumpy ore for the
Company's internal consumption at the Highveld steelmaking
operations and fines ore sold to third parties. Prior to 3Q10
operational results press release only production for sale to 3rd
parties has been shown.
2 Calculated in pure vanadium equivalent.
3 Evraz Group holds a 40% effective interest in OAO
Raspadskaya.
AVERAGE SELLING PRICES
USD/tonne (ex works)
unless otherwise stated 2010 2009 4Q 2010 3Q 2010
Steel products
Russia
Coke 196 113 210 200
Pig iron 384 247 392 421
Rolled products
Semi-finished products 420 293 452 433
Construction products 595 438 639 610
Railway products 709 611 767 725
Flat-rolled products 589 438 607 627
Other steel products 655 499 699 679
Ukraine
Coke 267 138 279 262
Pig iron 374 232 365 375
Rolled products
Semi-finished products 438 351 511 456
Construction products 562 442 599 580
Other steel products 975 892 891 979
Europe
Rolled products
Construction products 759 721 822 788
Flat-rolled products 719 618 804 791
North America
Rolled products
Construction products 766 651 764 771
Railway products 942 956 941 924
Flat-rolled products 880 809 856 944
Tubular products 1,404 1,527 1,426 1,446
South Africa
Rolled products
Semi-finished products 429 276 419 495
Construction products 667 700 602 705
Flat-rolled products 710 684 776 777
Other steel products 516 336 437 815
Mining products
Iron ore
Lumpy ore (Ukraine) 58 28 60 63
Concentrate, saleable
(Russia) 86 54 88 91
Sinter (Russia) 92 49 107 111
Pellets (Russia) 89 41 97 107
Fines ore (South Africa) 31 19 31 25
Coal
Coking coal 66 35 80 76
Steam coal 26 19 27 27
Concentrate 140 71 158 144
Steam concentrate 58 31 52 47
Vanadium products (USD/t
of V)
Vanadium in final products
Ferrovanadium 27,338 23,649 27,939 27,625
Nitrovan(R) 26,599 24,894 28,958 28,969
Oxides, vanadium aluminium
and chemicals 38,527 41,191 39,516 38,982
Notes:
Semi-finished products include slabs, billets, pipe blanks and
other semi-finished products.
Construction products include beams, channels, angles, rebars,
wire rods wire, and other construction products.
Railway products include rails, wheels, tyres and other railway
products.
Flat-rolled products include commodity plate, specialty plate
and other flat products.
Tubular products include large diameter line pipes, ERW pipes
and casings, seamless pipes and other tubular products.
Other steel products include rounds, grinding balls, mine
uprights, strips etc. For Ukraine they also include railway
products, for Europe - slabs and crane rails; for South Africa -
rails.
###
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
Evraz Group S.A. is a vertically-integrated steel, mining and
vanadium business with operations in the Russian Federation,
Ukraine, Europe, USA Canada and South Africa. The Company was
ranked the 14th largest steel producer in the world based on crude
steel production of 15.3 million tonnes in 2009. Evraz's internal
consumption of iron ore and coking coal is covered by its mining
operations. Evraz's consolidated revenues for the nine months ended
30 September 2010 were US$9,729 million and consolidated adjusted
EBITDA amounted to US$1,766 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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