TIDMEVR
RNS Number : 3100M
Evraz Plc
19 January 2016
EVRAZ Q4 and FY 2015 PRODUCTION REPORT
19 January 2016 - EVRAZ plc (LSE: EVR) ("EVRAZ" or the
"Company") today releases its operational results for the fourth
quarter and full year of 2015.
Q4 2015 vs Q3 2015 HIGHLIGHTS:
* Consolidated crude steel output increased by 2% to
3.6 million tonnes, following completion of
maintenance works at EVRAZ Pueblo (USA) and DMZ
(Ukraine) steel mills.
* Production of steel products, net of re-rolled
volumes, improved by 5%, mostly due to better
performance in Ukraine.
* Higher share of semi-finished steel products in
consolidated volumes of 45% in Q4 2015 vs. 32% in Q3
2015 is due to seasonal slowdown in demand for
finished, construction and railway, products in
Russia.
* Production of railway products rose 11% as a result
of a return to a normalised level at EVRAZ Pueblo
rail mill following maintenance works.
* Production of tubular products increased 3% as a
result of higher production at the Portland large
diameter pipe mill in the USA.
* Consolidated raw coking coal output increased by 12%
on completion of longwall moves at Yuzhkuzbassugol
mines. Production of coking coal concentrate declined
by 6% driven by softer demand from Russian
steelmakers.
FY 2015 vs FY 2014 HIGHLIGHTS:
* In 2015, the Company produced 14.3 million tonnes of
crude steel, a 8% decrease over 2014, partially due
to deconsolidation of EVRAZ Highveld Steel and
Vanadium ("Highveld") in South Africa.
* Without Highveld, the decrease in crude steel
production would be 5%, with the worsening market
conditions in the key markets as the main driver of
the decline in crude steel and steel products output.
* Production of steel products, net of re-rolled
volumes, was 6% down (-4% without Highveld).
* The share of finished steel products in consolidated
volumes has been decreasing over the year from 69% in
2014 to 63% in 2015 as a result of softer demand and
increasing competition in domestic markets, e.g. from
other local steel producers in Russia and from
imports in North America.
* Consolidated raw coking coal output and production of
coking coal concentrate decreased by 3% and 2%
respectively impacted by both planned (schedule of
longwall moves at Yuzhkuzbassugol) and unplanned
(e.g. suspension of mining at MUK-96 mine at the
Raspadskaya coal company due to market conditions)
declines.
* Record high production level at the Raspadskaya mine
following successful implementation of mine
restoration after the 2010 accident partly offset the
lower production of coking coal and coking coal
concentrate by the Company.
STEEL*
Product, '000 tonnes Q4 2015 Q3 2015 Q4 2015/ Q3 2015, change 2015 2014 2015/ 2014, change
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
Coke (saleable) 192 203 -5.2% 966 1,137 -15.0%
Pig iron 2,998 2,982 0.5% 11,922 12,373 -3.6%
Pig iron (saleable) 127 189 -32.7% 552 362 52.3%
Crude steel 3,561 3,492 2.0% 14,349 15,515 -7.5%
Steel products, gross** 3,470 3,374 2.9% 13,962 15,106 -7.6%
Steel products, net of
re-rolled volumes 3,294 3,140 4.9% 13,115 14,013 -6.4%
Semi-finished products *** 1,476 993 48.7% 4,913 4,369 12.4%
Finished products 1,818 2,147 -15.3% 8,202 9,643 -14.9%
Construction products 957 1,292 -25.9% 4,560 5,106 -10.7%
Railway products 365 329 10.7% 1,516 1,829 -17.1%
Flat-rolled products 154 182 -15.7% 710 1,027 -30.9%
Tubular products 210 204 2.9% 833 1,062 -21.6%
Other steel products 133 140 -4.5% 583 618 -5.6%
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
* Includes production volumes of EVRAZ Vitkovice Steel disposed
of in April 2014 and of EVRAZ Highveld Steel and Vanadium (EHSV)
which are not consolidated starting from April 2015 due to business
rescue proceedings
** Gross volume of steel products in the tables includes those
re-rolled at other EVRAZ's mills. However, such volumes are
eliminated as intercompany sales for purposes of EVRAZ's
consolidated operating results.
*** Consolidated production volumes of semi-finished products
are preliminary as Q4 2015 intra-group re-rolling volumes are yet
to be finalised.
RUSSIA and KAZAKHSTAN
Product, '000 tonnes Q4 2015 Q3 2015 Q4 2015/ Q3 2015, change 2015 2014 2015/ 2014, change
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
Coke (saleable) 56 74 -23.7% 303 402 -24.7%
Pig iron 2,734 2,733 0.0% 10,764 10,706 0.5%
Pig iron (saleable) 122 166 -26.3% 478 297 61.0%
Crude steel 2,829 2,820 0.3% 11,401 11,798 -3.4%
Steel products, gross 2,679 2,632 1.8% 10,741 11,052 -2.8%
Steel products, net of
re-rolled volumes 2,610 2,552 2.2% 10,458 10,807 -3.2%
Semi-finished products 1,404 1,084 29.5% 4,995 4,799 4.1%
Finished products 1,206 1,468 -17.9% 5,463 6,009 -9.1%
Construction products 858 1,103 -22.2% 3,935 4,187 -6.0%
Railway products 228 234 -2.5% 1,001 1,292 -22.6%
Other steel products 119 131 -8.9% 528 529 -0.3%
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
In Q4 2015, production of crude steel and steel products was
marginally unchanged compared to Q3 2015: The 18% decrease in
production of finished products, and particularly the 22% reduction
in production of construction products, due to beginning of the low
construction season in Russia and Kazakhstan, was balanced out with
the 30% increase in the output of semi-finished goods, directed
mostly to export destinations.
Quarterly production of railway products was marginally lower.
The Company used the quarter to master the production of new types
of rails for export markets, with a strengthened order book already
in Q1 2016.
In 2015, pig iron production was flat vs. 2014. Volumes of
saleable pig iron went up 61% as pig iron sales were more marginal
than slabs in the export markets. Crude steel output declined by 3%
accordingly.
Volumes of finished steel products sold predominantly in the
Russian domestic market declined by 9% and those of semi-finished
goods, mostly for export, grew by 4%, as a result of economic
slowdown and softer demand.
On the whole, prices in 2015 were lower following global
benchmarks. Prices in Q4 2015 were also negatively affected by the
traditional seasonal factors.
Average selling prices
USD/tonne (ex works) Q4 2015 Q3 2015 2015 2014
-------------------------- -------- -------- ----- -----
Coke 98 108 109 118
Pig iron 133 189 180 293
Steel products
Semi-finished products 203 241 256 410
Construction products 325 365 383 574
Railway products 495 527 540 747
Other steel products 352 381 405 580
-------------------------- -------- -------- ----- -----
January 19, 2016 06:22 ET (11:22 GMT)
Output of coking coal by the Raspadskaya coal company declined
by 6%, mostly as a result of longwall moves at the Raspadskaya mine
following completion of mining at its 5a-7-28 face in November.
Other factors that affected production volumes were suspension of
mining works at MUK-96 mine due to high cost of production and at
Raspadskaya-Koksovaya mine's fileld 1 due to an endogenous fire
hazard.
The lower volume of raw coal mined by the Raspadskaya coal
company as well as higher consumption of own coal by some Russian
steel producers, account for the 6% QoQ reduction in production of
coking coal concentrate by EVRAZ' coal wasking plants, in
particular by the Raspadskaya coal washing plant.
When comparing the full year 2015 to 2014, the 3% decrease in
mining volumes was driven mostly by lower output by Yuzhkuzbassugol
mines in accordance with the annual schedule of longwall moves. At
the same time, the Raspadskaya coal company increased production
despite suspension of MUK-96 and Raspadskaya-Koksovaya's field 1 as
described above.
Pricing in the Russian market is set quarterly. In Q4 2015, the
weighted average price of coking coal concentrate in Russian rouble
terms remained unchanged compared to Q3 2015. Rouble prices
increased in the Russian market and did not change in the export
markets due to the rouble weakening.
In 2015 to 2014 comparison, prices in rouble terms increased due
to higher prices domestically as well as a shift in shipments in
favour of more expensive grades. However, due to to sharp Russian
rouble depreciation, when re-calculated in US dollars, the prices
in 2015 were lower than in 2014.
Average selling prices
USD/tonne (ex works) Q4 2015 Q3 2015 2015 2014
------------------------- -------- -------- ----- -----
Raw coking coal 35 29 34 46
Coking coal concentrate 56 54 58 70
------------------------- -------- -------- ----- -----
VANADIUM
Product, tonnes of V* Q4 2015 Q3 2015 Q4 2015/ Q3 2015, change 2015 2014 2015/ 2014, change
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
Vanadium in slag (gross
production) 4,094 4,140 -1.1% 17,984 22,252 -19.2%
Russia 4,094 4,140 -1.1% 16,196 15,125 7.1%
South Africa 0 0 n/a 1,788 7,127 -74.9%
Vanadium in final products
(saleable) 3,098 3,108 -0.3% 14,681 13,870 5.9%
------------------------------ -------- -------- ------------------------- ------- ------- -------------------
(*) Calculated in pure vanadium equivalent
In Q4 2015, Vanadium slag production was marginally unchanged.
The 19% decrease in 2015 compared to 2014 is attributable to EVRAZ
Highveld's deconsolidation since April 2015. Without Highveld,
vanadium slag production increased by 7% YoY due to improved
extraction yields at EVRAZ NTMK.
Production of final vanadium products was stable QoQ and rose by
6% YoY despite deconsolidation of EVRAZ Highveld's subsidiary
Hochvanadium. The increase came from higher oxide and chemical
production at Stratcor, USA, as a result of improvements made to
the plant during the year, as well as higher ferrovanadium
production at Nikom in the Czech Republic due to better oxide
availability.
Average Q4 2015 Metall Bulletin FeV80 index $13.45/kgV declined
by 24.81% vs. $17.9/kgV in Q3. Meanwhile Ryan's Notes index used in
North America averaged $15.01/kgV in Q4 2015, a 23.53% fall against
$19.63/kgV in the previous quarter. The EVRAZ selling quotation
followed suit.
Average FeV indices
USD/tonne of V Q4 2015 Q3 2015 2015 2014
-------- -------- ------ ------
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe 13.46 17.90 18.58 25.53
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid 15.01 19.63 20.21 28.73
---------------------------------------------------------------------------------- -------- -------- ------ ------
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 further information:
Media Relations:
London: +44 207 Moscow: +7 495
832 8998 937 6871
media@evraz.com
Investor Relations:
London: +44 207 Moscow: +7 495
832 8990 232 1370
ir@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium
business with operations in the Russian Federation, Ukraine,
Kazakhstan, USA, Canada, Czech Republic, and South Africa. EVRAZ is
among the top steel producers in the world based on crude steel
production of 15.5 million tonnes in 2014. A significant portion of
the company's internal consumption of iron ore and coking coal is
covered by its mining operations. The company's consolidated
revenues for the year ended 31 December 2014 were US$13,061
million, and consolidated EBITDA amounted to US$2,325 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUKUARNRAAAAR
(END) Dow Jones Newswires
January 19, 2016 06:22 ET (11:22 GMT)
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