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Share Name Share Symbol Market Type Share ISIN Share Description
Evraz Plc LSE:EVR London Ordinary Share GB00B71N6K86 ORD USD0.05
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  3.50 0.98% 361.40 361.30 361.70 363.40 354.00 354.00 986,689 16:35:13
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Metals 8,976.8 680.1 18.9 18.7 5,265

Evraz Plc EVRAZ Q2 2020 TRADING UPDATE

30/07/2020 7:00am

UK Regulatory (RNS & others)


Evraz (LSE:EVR)
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RNS Number : 5365U

Evraz Plc

30 July 2020

EVRAZ Q2 2020 TRADING UPDATE

30 July 2020 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today released its trading update for the second quarter of 2020.

Q2 2020 vs Q1 2020 HIGHLIGHTS

-- In Q2 2020, EVRAZ' consolidated crude steel output fell by 5.1% QoQ, mainly due to capital repairs and gas pause at EVRAZ ZSMK in June as well as capital repairs at EVRAZ NTMK in May .

-- Total sales of steel products rose by 4.9% QoQ. Sales of semi-finished products increased by 19.5% QoQ following change in the product mix in favour of slab and billets resulted from decline in demand for finished products during the COVID-19 pandemic.

-- Sales of finished products fell by 6.9% amid weak market demand in Russia and North America as well as due to lower production volumes in Russia following scheduled capital repairs.

-- Total raw coking coal production decreased by 26 .8% QoQ, driven by weaker demand for coal on global markets . Production at the Razrez Raspadsky open pit and at Mezhegeyugol has been suspended until favourable market conditions are restored. The decline was also due the move of the longwall at the Alardinskaya mine.

-- External sales volumes of coking coal products dropped by 14 . 6 % QoQ, caused by lower shipments to Europe amid unfavourable market conditions.

-- External sales of iron ore products jumped by 25.6% QoQ amid higher shipments to the domestic market in Q2 2020.

-- Sales of vanadium products fell by 22.6% QoQ mainly due to lower steel utilisation rates as well as general decrease of vanadium demand following COVID 19 restrictions. The regional sales and product mix was changed to serve the more active Chinese oxide market during Q2 2020.

 
 Product, '000 tonnes            Q2       Q1     Q2 2020/ Q1 2020, change     H1       H1     H1 2020/ H1 2019, change 
                                 2020     2020                                2020     2019 
----------------------------  -------  -------  -------------------------  -------  -------  ------------------------- 
 Total crude steel 
  production                    3,377    3,559                      -5.1%    6,936    6,986                      -0.7% 
   Russia                       2,992    3,121                      -4.1%    6,113   5,99 2                       2.0% 
   North America                  385      438                     -12.1%      823      994                     -17.2% 
 Total raw coking coal mined    4,165    5,692                     -26.8%    9,857   13,840                     -28.8% 
 Total coking coal 
  concentrate 
  production                    3,820    3,747                       1.9%    7,567    8,142                      -7.1% 
 Iron ore products 
  production                    3,460    3,595                      -3.8%    7,055    7,169                      -1.6% 
 Total sales of steel 
  products                      3,382    3,224                       4.9%    6,605    6,510                       1.5% 
   Semi-finished products 
    (1)                         1,724    1,443                      19.5%    3,167    2,702                      17.2% 
   Finished products (1, 2)     1,658    1,781                      -6.9%    3,438    3,808                      -9.7% 
 Total sales of third-party 
  steel products                  197      175                      12.6%      372      376                      -1.1% 
 Sales of coking coal 
  products                      2,800    3,278                     -14.6%    6,079    5,585                       8.8% 
 Sales of iron ore products       446      355                      25.6%      801      699                      14.6% 
 Sales of vanadium in slag      1,996      765                        n/a    2,761    2,836                      -2.6% 
 Sales of vanadium final 
  products (3)                  2,450    3,168                     -22.6%    5,618    5,784                      -2.9% 
----------------------------  -------  -------  -------------------------  -------  -------  ------------------------- 
 

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

(1) The Q1 2020 data have been adjusted

(2) The H1 2019 data have been adjusted

(3) In tonnes of pure vanadium

STEEL SEGMENT

Total production volumes

 
 Product, '000 tonnes       Q2 2020   Q1 2020      Q2 2020/ Q1 2020,      H 1 2020   H1 2019      H1 2020/ H1 2019, 
                                                        change                                         change 
-------------------------  --------  --------  ------------------------  ---------  --------  ------------------------ 
 Pig iron production          2,792     2,828            -1.3%             5,620      5,457             3.0% 
  EVRAZ ZSMK                  1,532     1,556            -1.5%             3,088      3,001             2.9% 
  EVRAZ NTMK                  1,260     1,272            -0.9%             2,532      2,456             3.1% 
 Crude steel production       2,992     3,121            -4.1%             6,113      5,992             2.0% 
   EVRAZ ZSMK                 1,878     1,980            -5.2%             3,858      3,837             0.5% 
   EVRAZ NTMK                 1,114     1,141            -2.4%             2,255      2,155             4.6% 
 Total steel products 
  production, net of 
  re-rolled volume(1)         2,739     2,867            -4.5%             5,606      5,381             4.2% 
   EVRAZ ZSMK                 1,657     1,743            -4.9%             3,401      3,423             -0.6% 
   EVRAZ NTMK                   994     1,032            -3.7%             2,025      1,638             23.6% 
   EVRAZ Caspian Steel           88        92            -3.9%              180        122              47.5% 
 Iron ore products 
  production                  3,460     3,595            -3.8%             7,055      7,169             -1.6% 
   Pellets (EVRAZ KGOK)       1,616     1,665            -2.9%             3,281      3,216             2.0% 
   Sinter (EVRAZ KGOK)          905       916            -1.2%             1,821      1,826             -0.3% 
   Concentrate saleable 
    (EVRAZ KGOK, 
    Evrazruda)                  939     1,014            -7.4%             1,953      2,127             -8.2% 
 Coking coal concentrate 
  production                    496       486            2.1%               982        943              4.1% 
   From own raw coal(2)         480       350            37.1%              830        597              39.0% 
   From third-party raw 
    coal                         16       136           -88.2%              152        346             -56.1% 
 Gross vanadium slag 
  production(3)               5,098     4,979            2.4%              10,077     8,979             12.2% 
-------------------------  --------  --------  ------------------------  ---------  --------  ------------------------ 
 

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

(1) Including EVRAZ Palini e Bertoli which was sold in Q4 2019.

(2) From Coal segment

(3) In tonnes of pure vanadium

In Q2 2020, pig iron production remained almost flat QoQ at the Russian mills.

Crude steel output decreased by 4.1% QoQ, mainly due to capital repairs and gas pause at EVRAZ ZSMK in June as well as capital repairs at EVRAZ NTMK in May.

Total output of steel products fell by 4.5% QoQ mainly due to lower crude steel availability at EVRAZ NTMK and EVRAZ ZSMK. EVRAZ Caspian Steel reduced production by 3.9% QoQ due to lower demand from customers.

Output of iron ore products fell by 3.8% QoQ, mainly due to a decrease in primary concentrate production volumes and the degree of fluxing at mining operations of EVRAZ ZSMK (former Evrazruda).

Total sales volumes

 
 Product, '000 tonnes      Q2 2020        Q1     Q1 2020/ Q4 2019, change     H1       H1     H1 2020/ H1 2019, change 
                                          2020                                2020     2019 
------------------------  --------  ----------  -------------------------  -------  -------  ------------------------- 
 Coke                           81         105                     -22.4%      186      178                       4.5% 
 Steel products, 
  external sales             2,921       2,707                       7.9%    5 628    5 353                       5.1% 
 Semi-finished products      1,670       1,353                      23.4%    3 023    2 572                      17.5% 
   Slabs                       737         570                      29.2%    1 307    1 054                      24.0% 
   Billets                     820         656                      25.0%    1 475    1 191                      23.8% 
   Other steel products 
    (1)                        114         128                     -10.8%      241      327                     -26.3% 
 Finished products(2)        1,251       1,353                      -7.6%    2 604    2 780                      -6.3% 
   Construction products       783         839                      -6.6%    1 621    1 593                       1.8% 
   Railway products            311         358                     -13.0%      669      710                      -5.8% 
   Flat products                 0           0                        n/a        0      189                    -100.0% 
   Other steel products        157         157                      -0.2%      314      288                       9.0% 
 Steel products, 
  inter-segment sales            3          40                     -91.7%       44      301                     -85.4% 
 Third-party steel 
  products, external 
  sales                        197         175                      12.6%      372      376                      -1.1% 
 Iron ore products, 
  external sales               446         355                      25.6%      801      699                      14.6% 
 Pellets                       446         355                      25.6%      801      699                      14.6% 
 Sales of vanadium in 
  slag                       1,996         765                        n/a    2 761    2 836                      -2.6% 
 Sales of vanadium final 
  products (3)               2,450       3,168                     -22.6%    5 618    5 784                      -2.9% 
------------------------  --------  ----------  -------------------------  -------  -------  ------------------------- 
 

Note. Numbers in this table and the tables below may not add to totals due to rounding.

(1) Includes tonnes of pig iron

   (2)   EVRAZ Palini e Bertoli was sold in Q4 2019 

(3) In tonnes of pure vanadium

In Q2 2020, external sales of steel products increased by 7.9% QoQ. Sales of semi-finished products climbed by 23.4% QoQ, due to a change in the product mix to higher slab and billets sales volumes and a decrease in the volumes of finished products due to market conditions during the COVID-19 pandemic.

Sales of finished products dropped by 7.6% QoQ due worsening market conditions during the pandemic as well as lower production volumes amid scheduled capital repairs at EVRAZ ZSMK and EVRAZ NTMK.

Sales of iron ore products surged by 25.6% QoQ amid higher shipments to the domestic market in Q2 2020.

Sales of vanadium products fell by 22.6% QoQ mainly due to lower steel utilisation rates as well as general decrease of vanadium demand following COVID 19 restrictions. The regional sales and product mix was changed to serve the more active Chinese oxide market during Q2 2020.

 
 Cash cost, US$/t             Q2      Q1     Q2 2020 / Q1 2020, change      H1       H1    H1 2020 / H1 2019, change 
                              2020    2020                                 2020     2019 
--------------------------  ------  ------  --------------------------  -------  -------  -------------------------- 
 Slab cash cost vertically 
  integrated                   198     223                        -11%      210      230                         -9% 
 Iron ore products (Fe 
  62%)                          38      38                          0%       38       38                          0% 
--------------------------  ------  ------  --------------------------  -------  -------  -------------------------- 
 
 

Average selling prices

 
 US$/tonne (exworks)                                                               Q2        Q1        H1        H1 
                                                                                   2020      2020      2020      2019 
------------------------------------------------------------------------------  --------  --------  --------  -------- 
 Coke                                                                                148       167       159       233 
 Steel products                                                                      401       477       438       494 
   Semi-finished products(1)                                                         296       346       319       387 
   Construction products                                                             441       505       474       544 
   Railway products                                                                  812       925       873       753 
   Other steel products                                                              490       509       500       596 
   Pellets                                                                            47        54        49        77 
 Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st 
  grade Western Europe(2)                                                        24 . 94   26 . 54   25 . 74   56 . 35 
 Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2)                    23 . 28   27 . 18   25 . 23   67 . 87 
------------------------------------------------------------------------------  --------  --------  --------  -------- 
 

(1) Includes prices for pig iron

(2) US$/kgV

During Q3 2020, pig iron production volumes are expected to decrease following ramp-up of blast furnace no.6, which will replace blast furnace no.5 at EVRAZ NTMK in July-August.

Iron ore pellets production volumes are expected to remain flat, while sinter production is expected to decrease due to capital repairs at EVRAZ KGOK's sinter plant in July - September 2020.

STEEL, NORTH AMERICA SEGMENT

Production and sales volumes

 
 Product, '000 tonnes                 Q2     Q1 2020       Q2 2020/       H1 2020    H1     H1 2020/ H1 2019, change 
                                      2020              Q1 2020, change              2019 
----------------------------------  ------  --------  -----------------  --------  ------  ------------------------- 
 Crude steel                           385       438             -12.1%       823     994                     -17.2% 
   EVRAZ US mills                      210       251             -16.3%       461     486                      -5.1% 
   EVRAZ Canadian mills                175       188              -6.9%       363     508                     -28.5% 
 Total steel products production, 
  net of re-rolled volume (1)          461       486              -5.1%       947   1 163                     -18.6% 
   EVRAZ US mills                      300       336             -10.7%       636     735                     -13.5% 
   EVRAZ Canadian mills                161       150               7.3%       311     428                     -27.3% 
 Sales of steel products               457       517             -10.9%       978   1 158                     -15.5% 
   Semi-finished products (1)           54        90             -39.8%       144     130                      10.8% 
   Construction products                68        66               2.5%       133     136                      -2.2% 
   Railway products (1, 2)             107       106               1.7%       213     223                      -4.5% 
   Flat-rolled products (1)             69       100             -31.1%       169     282                     -40.1% 
   Tubular products (1)                163       156               4.5%       319     387                     -17.6% 
----------------------------------  ------  --------  -----------------  --------  ------  ------------------------- 
 
 
   (1)   The Q1 20 20 data have been adjusted 
   (2)   The H 1 20 19 data have been adjusted 

In Q2 2020, crude steel production was 1 2 . 1 % lower QoQ, mainly attributable to falling demand across North American steel markets amid the COVID-19 pandemic and uncertainty driven by oil prices turmoil. In addition, production was affected by the shutdown of Regina Steel, which extended into early Q2 2020 with the advancement of a planned maintenance outage following the March 2020 cyber-attack.

Total output of steel products decreased by 5.1%, mainly driven by reduced demand for flat-rolled products from distributors adjusting to swift market changes brought on by the pandemic during the period and rapid deterioration of the energy markets in North America halting OCTG demand.

Canadian mills increased production by 7.3% QoQ due to higher large diameter (LD) and line pipe (LP) production following downtime in March triggered by the cyberattack and improved operational performance. This was partially offset by lower Canadian OCTG production due to the fall in market demand in wake of sharply reduced oil prices. Lower rig counts in Western Canada resulted in sharp reductions in demand, and the idling of pipe mills in Calgary, Red Deer and Camrose in Q2 2020.

US mills decreased production by 10.7% QoQ due to declined flat-rolled orders at EVRAZ Portland and OCTG orders at Pueblo Seamless. Similar to the Canadian OCTG mills, Pueblo Seamless volumes were also affected by oil price reductions, which resulted in the idling of the Seamless mill in early Q2 2020.

Semi-finished product sales fell by 39.8% following successful fulfilment of a contract with a key customer.

Flat-rolled product sales dropped by 31.1% QoQ as a result of weakening market demand.

Sales volumes of tubular products climbed by 4.5% QoQ, driven by the Canadian LD and LP production increases during the period relative to Q1 2020. Railway and construction products demand remained stable QoQ.

Prices for construction products decreased 4.7% QoQ, driven by lower scrap costs. Prices for tubular products rose driven primarily by a mix of orders, while prices for flat-rolled products remained unchanged on average.

Average selling prices

 
 US$/tonne (ex-works)       Q2      Q1      H1      H1 
                            2020    2020    2020    2019 
------------------------  ------  ------  ------  ------ 
 Construction products*     681     715     698     808 
 Flat-rolled products*      891     904     899     999 
 Tubular products*         1 479   1 350   1 416   1 353 
------------------------  ------  ------  ------  ------ 
 

* The Q1 2020 data have been adjusted

In Q3 2020, significant uncertainty remains around production and sales volumes for all product groups due to continued turmoil in the oil & gas markets and the slow economic recovery during the resurgent COVID-19 pandemic, leaving North American customers cautious in purchasing strategies.

COAL SEGMENT

Production volumes

 
 Product, '000 tonnes            Q2      Q1     Q2 2020/ Q1 2020, change   H1 2020     H1     H1 2020/ H1 2019, change 
                                 2020    2020                                          2019 
-----------------------------  ------  ------  -------------------------  --------  -------  ------------------------- 
 Raw coking coal (mined)        4,165   5,692            -26.8%             9,857    13,840            -28.8% 
   Yuzhkuzbassugol              2,053   2,704            -24.1%            4, 757    6,072             -21.7% 
   Raspadskaya                  2,112   2,952            -28.5%             5,064    7,147             -29.1% 
   Mezhegeyugol                   0      36             -100.0%              36       621              -94.2% 
 Coking coal concentrate 
  (production)                  3,324   3,261             1.9%              6,585    7,198             -8.5% 
  Produced at Yuzhkuzbassugol 
   coal 
   washing plants               1,328   1,411            -5.9%              2,739    3,270             -16.2% 
  Produced at the Raspadskaya 
   coal 
   washing plant                1,996   1,850             7.9%              3,846    3,928             -2.1% 
-----------------------------  ------  ------  -------------------------  --------  -------  ------------------------- 
 

In Q2 2020, overall raw coking coal output fell by 26.8% QoQ, primarily due to weaker market demand as well as lower production at the Razrez Raspadsky open pit and Mezhegeyugol, following the decision to suspend output due to unfavourable market conditions as well as the completion of a mining at longwall at the Raspadskaya mine.

Production at Yuzhkuzbassugol went down by 28.5% QoQ mainly due to the longwall move at the Alardinskaya mine.

Output of coking coal concentrate rose by 1.9% QoQ as Raspadskaya coal washing plant processed additional volumes of raw coal from the stockpiles in order to offset lower production at Yuzhkuzbassugol coal washing plants.

Sales volumes

 
 Product, '000 tonnes          Q2      Q1     Q2 2020/ Q1 2020, change    H1      H1     H1 2020/ H1 2019, change 
                               2020    2020                               2020    2019 
---------------------------  ------  ------  -------------------------  ------  ------  ------------------------- 
 External sales               2,800   3,278                     -14.6%   6,079   5,586                       8.8% 
   Raw coking coal              492     707                     -30.4%   1,198     944                      26.9% 
   Coking coal concentrate    2,309   2,572                     -10.2%   4,880   4,642                       5.1% 
 Intersegment sales           1,880   1,624                      15.8%   3,503   3,169                      10.5% 
    Raw coking coal             712     492                      44.9%   1,204     952                      26.5% 
  Coking coal concentrate     1,167   1,132                       3.1%   2,300   2,217                       3.7% 
---------------------------  ------  ------  -------------------------  ------  ------  ------------------------- 
 

In Q2 2020, external sales volumes of coking coal products declined by 14.6% QoQ. Raw coking coal sales volumes fell by 30.4% QoQ, following lower shipments to Europe due to unfavourable market conditions. Coking coal concentrate sales volumes decreased by 10.2% QoQ, attributable to lower shipments and partly offset by stable demand in Russia and on the Chinese spot market.

 
 Cash cost, US$/t            Q2      Q1     Q1 2020 / Q4 2019, change    H1      H1     Q1 2020 / Q1 2019, change 
                             2020    2020                                2020    2019 
-------------------------  ------  ------  --------------------------  ------  ------  -------------------------- 
 Coking coal concentrate     34      33                3%                34      34                0% 
-------------------------  ------  ------  --------------------------  ------  ------  -------------------------- 
 

Average selling prices

 
                             Q2      Q1      H1      H1 
  US$/tonne (ex works)       2020    2020    2020    2019 
-------------------------  ------  ------  ------  ------ 
 Raw coking coal             39      33      36      59 
 Coking coal concentrate     65      70      67      110 
-------------------------  ------  ------  ------  ------ 
 

In Q2 2020, coking coal selling prices moved in line with global benchmarks.

In Q3 2020, raw coal production is expected to increase QoQ due to the completion of the longwalls move at the Esaulskaya, Alardinskaya, Osinnikovskaya and Uskovskaya mines in Q2 2020.

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 further information:

Media Relations:

+7 495 937 6871

media@evraz.com

Investor Relations:

+7 495 232 1370

ir@evraz.com

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in Russia, Kazakhstan, the US, Canada and Czech Republic. EVRAZ is among the top steel producers in the world based on crude steel production of 14 million tonnes in 2019. A significant portion of the Group's internal consumption of iron ore and coking coal is covered by its mining operations. The Group's consolidated revenues for the year ended 31 December 2019 were US$11,905 million, and consolidated EBITDA amounted to US$2,601 million.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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