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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 82.68 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 4878J
Evraz Group S.A.
31 March 2010
EVRAZ ANNOUNCES FINANCIAL RESULTS FOR 2009
31 March 2010 - Evraz Group S.A. (LSE: EVR) today announces its audited
financial results for the year ended 31 December 2009.
2009 Highlights:
Financials:
· Consolidated revenue US$9,772 million
· Consolidated adjusted EBITDA US$1,237 million
· Net loss US$1,261 million (equivalent to net loss of US$207 million before
change in accounting policy|)
· Operating cash flow US$1,700 million
· Total debt US$7,923 million (reduced by US$2,063 million from US$9,986
million as of 31 December 2008)
Steel segment:
· Crude steel production 15.3 million tonnes (17.7 million tonnes in 2008)
· Total steel sales volumes 14.3 million tonnes (17.0 million tonnes in 2008)
· Consolidated steel revenue US$8,978 million (US$17,925 million in 2008)
· 1H2009: closed inefficient capacity, destocked and reduced costs and CAPEX
· 2H2009: increased capacity utilisations following recovery in demand
Mining segment:
· Iron ore production 17.4 million tonnes (18.9 million tonnes in 2008)
· Coking coal production 10.3 million tonnes (9.1 million tonnes in 2008)
· Thermal coal production 4.1 million tonnes (4.9 million tonnes in 2008)
· Consolidated mining revenue US$1,456 million (US$3,634 million in 2008)
· 1H2009: reduced costs and minimal mine development
· 2H2009: increased mine development following recovery in demand
Vanadium segment:
· Primary vanadium production 22,200 tonnes (26,400 tonnes in 2008)
· Vanadium product sales volume 18,400 tonnes (26,400 tonnes in 2008)
· Vanadium segment revenues US$363 million (US$1,206 million in 2008)
· 1H2009: destocked and reduced operating costs
· 2H2009: increased output following recovery in demand
Corporate developments:
· Completion of acquisition of Vanady-Tula, a vanadium slag processing facility
in Russia
· Acquisition of Chemzone, the Carbofer steel distribution network in Russia
· Transfer of 26% stake in Mapochs Mine to local partners in South Africa as
part of the Black Economic Empowerment (BEE) government programme
· Successfully tendered to develop the Mezhegey coking coal deposit in March
2010
| Please note that whereas the additional impairment of US$76 million (nil
income tax effect) and the revaluation deficit of US$420 million (net of income
tax effect of US$144 million) recognised through the change in accounting policy
are one-off charges, the increase in depreciation expense of US$558 million (net
of income tax effect of US$148 million) as a result of the change in accounting
policy will affect our profitability in the future
Alexander Frolov, Chief Executive of Evraz Group, commented:
"The year 2009 proved challenging for Evraz and the global steel industry in
general. We were particularly affected by the contraction of the Russian
construction sector and the slow-down in infrastructure spending in the markets
where our production facilities are located: North America, Europe and South
Africa.
"At the onset of the international economic reversal, management developed and
executed an action plan specifically designed to reduce the Company's cost base
and reinforce the balance sheet. We have delivered on all our priorities and I
am confident that the Company had significantly strengthened its operating base.
"Our Russian steelmaking operations have been running at full capacity since 1
July 2009 on the back of improved demand for steel products from South East
Asia, the Middle East and North Africa. This, together with increased prices,
helped to raise our EBITDA margin from 10% in the first half of 2009 to 15% in
the second half."
Giacomo Baizini, Evraz Group's Chief Financial Officer, commented:
"Our net loss of US$1,261 million for 2009 reflects the global softness of steel
markets. In order to aid comparison with previous years' results, however it
should be noted that in the absence of the effect of the revaluation of certain
asset classes due to the change in accounting policy under IAS16, the net loss
would have amounted to US$207 million. This change resulted in additional
depreciation of US$558 million (net of income tax effect of US$148 million) due
to higher asset values, a loss from the revaluation deficit of US$420 million
(net of income tax effect of US$144 million) recognised on the date of
revaluation, and an additional impairment loss on goodwill of US$76 million (nil
income tax effect).
"Prices for semi-finished and finished products have been rising steadily since
the second quarter of 2009 in line with higher raw material prices. Due to
significant scale of our vertical integration (2H2009: 96% self-coverage in iron
ore and 74% self-coverage in coking coal excluding the Raspadskaya stake or 117%
including the Raspadskaya stake) integrated EBITDA margins increased, although
further gains in the fourth quarter of 2009 were limited by global increases in
scrap prices.
"In a rising price environment we are subject to a short-term time lag due to
the fact that export prices are typically fixed one to three months ahead of
production, while prices for externally procured raw materials are fixed
immediately prior to the month of production. This means that the full benefit
of higher prices will not become fully apparent until the trend stabilises."
Management actions
Operations and sales:
· In the wake of de-stocking activity in 1H2009, the priority during 2H2009
was to increase output. Overall steelmaking utilisation improved from 75% in
1H2009 to 90% in 2H2009. In Russia and Ukraine, 100% utilisation was achieved as
from 1 July 2009 through increased exports
· Maximum utilisation of internal raw material and semi-finished supply,
while also taking advantage of optimisation opportunities (e.g. physical iron
ore swap with another mining company in Russia to save rail transportation
costs)
· Labour costs cut by 27% in 2009 compared to 2008 through reduced salaries,
elimination of bonuses, reduction of shifts and decreased headcount
· Cost of services and auxiliary materials reduced by 28% in 2009 compared
with 2008 following extensive negotiations with suppliers
· As a result of these actions and Rouble devaluation, integrated cash cost
per tonne of semi-finished steel products in Russia decreased to an average 260
US$/tonne for 2009 compared with an average 410 US$/tonne for 2008
· Attention given to maximising margins through monthly evaluations of the
profitability of individual product lines and relevant sales destinations
compared with available alternatives
CAPEX:
· CAPEX in 2009 amounted to US$441 million, a significant reduction compared
with US$1,103 million total for 2008
· Reduction principally achieved through delay of development CAPEX but also
through minimising maintenance while fully observing safety requirements
Financial management:
· Raised US$965 million in convertible bond and GDR issues in July 2009
· Raised US$683 million in Rouble bond issues in October 2009
· US$654 million released from working capital largely through reduction of
finished goods inventory in 1H2009
· Reset covenants on existing bank debt and bonds with ample headroom even
assuming the most pessimistic scenarios
Outlook
Commenting on the outlook for 2010 and beyond Mr. Frolov said:
"Since the beginning of 2010 we have seen improvements in demand in all our
markets. Steel prices have risen on a global basis, in line with raw material
prices, and this will translate into improved results for us due to the scale of
our vertical integration.
"The Russian domestic market is showing an encouraging trend with construction
steel sales volumes currently above the highest monthly levels achieved in 2009,
having grown steadily since the beginning of the year. Export demand remains
strong and this will allow us to continue running our Russian steelmaking
operations at full capacity.
"The North American market has also demonstrated marked improvements since the
start of the year and this, in turn, will allow us to increase utilisation rates
in our US and Canadian plants.
"In the medium-term we expect that global demand for long steel products and
structural flat products will continue to strengthen on the back of
infrastructure investments.
"Our focus on raw material supply, which ensures that our steel plants are
supplied with low extraction cost iron ore and coking coal, will continue to
underwrite the fundamental strength of our business."
Mr. Baizini added:
"We expect first quarter 2010 EBITDA to be somewhat higher than that for the
fourth quarter of 2009, and we anticipate a figure in the order of US$400
million. The full impact of growing steel prices is expected to be reflected in
our financial performance later in 2010.
"The capital markets continue to be receptive to us as illustrated by our US$500
million issue of Rouble-denominated bonds in March 2010 for the refinancing of
short-term maturities. This, together with the fact that the Group continues to
be free cash flow positive on a quarterly basis, gives us confidence in our
ability to manage liquidity and our debt portfolio."
+-----------------------+------------+------------+------------+
| Full year to 31 | 2009 | 2008 | Change |
| December | | | |
| (US$ million unless | | | |
| otherwise stated) | | | |
+-----------------------+------------+------------+------------+
| Revenue | 9,772 | 20,380 | (52.1)% |
+-----------------------+------------+------------+------------+
| Adjusted EBITDA 1 | 1,237 | 6,215 | (80.1)% |
+-----------------------+------------+------------+------------+
| (Loss)/profit from | (1,047)* | 3,632 | |
| operations | | | |
+-----------------------+------------+------------+------------+
| Net (loss)/profit | (1,261)** | 1,859 | |
+-----------------------+------------+------------+------------+
| (Losses)/earnings per | (3.10) | 4.85 | |
| GDR 2, (US$) | | | |
+-----------------------+------------+------------+------------+
1 Refer to Attachment 1 for reconciliation to profit from operations
2 One share is represented by three GDRs
* (Loss)/profit from operations was adversely affected by US$1,346 million
negative effect of the revaluation of property, plant and equipment, caused by
changes in accounting policy. Excluding this effect there would have been an
operating profit of US$299 million
** Net (loss)/profit was adversely affected by US$1,054 million negative effect
of the revaluation of property, plant and equipment, caused by changes in
accounting policy. Excluding this effect there would have been a net loss of
US$207 million
2009 Results Summary:
Evraz's consolidated revenues decreased by 52.1% to US$9,772 million in 2009
compared with US$20,380 million in 2008. Steel segment sales accounted for the
majority of the decrease in revenues, largely due to lower average prices and
sales volumes of steel products. Evraz's sales volumes of steel products to
third parties decreased from 17.0 million tonnes in 2008 to 14.3 million tonnes
in 2009.
The decrease in steel sales volumes primarily relates to a decline in demand for
construction products in Russia with overall sales in the Russian market down by
2.4 million tonnes. Sales volumes in Ukraine declined by 0.1 million tonnes. The
decreases in the domestic markets were partially offset by the growth of export
sales volumes from the Russian and Ukrainian operations, which increased by 0.8
million tonnes in total. Sales volumes of the European and South African
operations declined by 0.3 million tonnes and 0.1 million tonnes respectively.
The Canadian operations, which were acquired in June 2008, sold approximately
the same steel volumes in 2009 as in 2008 post acquisition, while sales of the
US operations decreased by 0.6 million tonnes. These decreases directly
reflected the general slowdown in the steel markets in 2009 and related cuts in
production volumes.
Geographic breakdown of consolidated revenues
+----------+---------+--------+---------+--------+---------+
| | Year ended 31 December |
+----------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+----------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+----------+---------+--------+---------+--------+---------+
| Russia | 2,950 | 30.2% | 7,575 | 37.2% | (61.1)% |
+----------+---------+--------+---------+--------+---------+
| Americas | 2,428 | 24.8% | 4,538 | 22.3% | (46.5)% |
+----------+---------+--------+---------+--------+---------+
| Asia | 2,423 | 24.8% | 3,217 | 15.8% | (24.7)% |
+----------+---------+--------+---------+--------+---------+
| Europe | 1,028 | 10.5% | 2,862 | 14.0% | (64.1)% |
+----------+---------+--------+---------+--------+---------+
| CIS | 543 | 5.6% | 1,429 | 7.0% | (62.0)% |
+----------+---------+--------+---------+--------+---------+
| Africa | 381 | 3.9% | 720 | 3.5% | (47.1)% |
+----------+---------+--------+---------+--------+---------+
| Rest | 19 | 0.2% | 39 | 0.2% | (51.3)% |
| of the | | | | | |
| world | | | | | |
+----------+---------+--------+---------+--------+---------+
| Total | 9,772 | 100.0% | 20,380 | 100.0% | (52.1)% |
+----------+---------+--------+---------+--------+---------+
Revenues from sales in Russia decreased as a proportion of total revenues from
37.2% to 30.2%.
In 2009, revenues from non-Russian sales declined by 46.7% to US$6,822 million
compared to US$12,805 million in 2008 and increased as a percentage of total
revenues to 69.8%, compared with 62.8% in 2008. The main driver of the higher
proportion of revenues outside Russia was the re-orientation of sales from the
Russian operations to export markets in response to weak domestic demand.
The consolidated cost of revenues amounted to US$8,756 million, representing
89.6% of consolidated revenues, in 2009 compared with US$13,463 million,
representing 66.1% of consolidated revenues, in 2008. Gross profit fell by 85.3%
from US$6,917 million in 2008 to US$1,016 million in 2009. The steep reduction
in gross profit margin primarily resulted from the fall in steel and vanadium
prices and production cuts in response to weaker demand in principal steel
markets during 2009. An additional factor was a 62% increase in steel segment's
depreciation charge in 2009 compared with 2008 due to a revaluation of assets.
Selling, general and administrative (SG&A) expenses as a percentage of
consolidated revenues increased year-on-year from 8.6% to 13.0%.
Total loss on disposal of property, plant and equipment amounted to US$81
million in 2009 compared with US$37 million in 2008. The increased loss in 2009
primarily related to the revaluation of property, plant and equipment.
Total impairment of assets amounted to US$163 million in 2009 compared with
US$880 million in 2008. The impairment in 2009 and 2008 was largely attributable
to impairment of goodwill in the amounts of US$135 million and US$756 million
respectively, related to the acquisition of new operations in North America and
Ukraine. Evraz also recognised an impairment of assets, other than goodwill, in
2009 and 2008 in the amounts of US$28 million and US$124 million respectively,
including impairment due to the closure of certain obsolete and inefficient
Russian production facilities.
The revaluation deficit on property, plant and equipment in 2009 amounted to
US$564 million and relates to changes in the accounting policies.
Profit (loss) from operations changed to a loss of US$1,047 million, or -10.7%
of consolidated revenues, for 2009 compared to a profit of US$3,632 million, or
17.8% of consolidated revenues, for 2008. The decrease in profit from operations
is attributable to the decline in consolidated gross profit margin.
Consolidated adjusted EBITDA decreased by 80.1% to US$1,237 million in 2009
compared to US$6,215 million in 2008, with adjusted EBITDA margins of 12.7% and
30.5% respectively.
Share of profits (losses) of associates and joint ventures of US$(8) million in
2009 and US$194 million in 2008 related to income (loss) attributable to Evraz's
interest in Raspadskaya and Kazankovskaya mine (an associate of
Yuzhkuzbassugol).
In 2009, income tax expense (benefit) changed to a benefit of US$339 million
compared with an expense of US$1,192 million, in 2008, which corresponds to
effective tax rates of 21.2% and 39.1% respectively.
The net profit (loss) attributable to equity holders of Evraz Group changed from
a profit of US$1,797 million in 2008 to a loss of US$1,251 million in 2009.
Review of Operations
Steel Segment Results
+------------------------+------------+-------------+------------+
| Full year to 31 | 2009 | 2008 | Change |
| December | | | |
| (US$ million unless | | | |
| otherwise stated) | | | |
+------------------------+------------+-------------+------------+
| Revenues* | 8,978 | 17,925 | (49.9)% |
+------------------------+------------+-------------+------------+
| (Loss)/profit from | (840) | 2,746 | (130.6)% |
| operations | | | |
+------------------------+------------+-------------+------------+
| Adjusted EBITDA | 903 | 4,671 | (80.7)% |
+------------------------+------------+-------------+------------+
| Adjusted EBITDA margin | 10.1% | 26.1% | |
+------------------------+------------+-------------+------------+
*Segmental revenues here and further include intersegment sales
Steel Segment Sales
+---------------+---------+--------+---------+--------+---------+
| | Year ended 31 December |
+---------------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+---------------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+---------------+---------+--------+---------+--------+---------+
| Steel | | | | | |
| products | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Construction | 2,189 | 24.4% | 4,958 | 27.7% | (55.8)% |
| products 1 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Railway | 1,117 | 12.4% | 2,226 | 12.4% | (49.8)% |
| products | | | | | |
| 2 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Flat-rolled | 1,450 | 16.2% | 3,239 | 18.1% | (55.2)% |
| products 3 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Tubular | 1,008 | 11.2% | 1,753 | 9.8% | (42.5)% |
| products | | | | | |
| 4 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Semi-finished | 2,018 | 22.5% | 3,512 | 19.6% | (42.5)% |
| products 5 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Other | 255 | 2.8% | 607 | 3.4% | (58.0)% |
| steel | | | | | |
| products | | | | | |
| 6 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Other | 941 | 10.5% | 1,630 | 9.1% | (42.3)% |
| products | | | | | |
| 7 | | | | | |
+---------------+---------+--------+---------+--------+---------+
| Total | 8,978 | 100.0% | 17,925 | 100.0% | (49.9)% |
+---------------+---------+--------+---------+--------+---------+
1 Includes rebars, wire rods, wire, H-beams, channels and angles.
2 Includes rail and wheels.
3 Includes plates and coils.
4 Includes large diameter, ERW, seamless pipes and casing.
5 Includes billets, slabs, pig iron, pipe blanks and blooms.
6 Includes rounds, grinding balls, mine uprights and strips.
7 Includes coke and coking products, refractory products, ferroalloys and resale
of coking coal.
Steel Segment Sales Volumes*
+--------------------------+------------+------------+------------+
| Full year to 31 December | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+--------------------------+------------+------------+------------+
| Steel products | | | |
+--------------------------+------------+------------+------------+
| Construction products | 4,228 | 5,320 | (20.5)% |
+--------------------------+------------+------------+------------+
| Railway products | 1,592 | 2,438 | (34.7)% |
+--------------------------+------------+------------+------------+
| Flat-rolled products | 2,113 | 2,651 | (20.3)% |
+--------------------------+------------+------------+------------+
| Tubular products | 667 | 919 | (27.4)% |
+--------------------------+------------+------------+------------+
| Semi-finished products | 5,273 | 5,188 | 1.6% |
+--------------------------+------------+------------+------------+
| Other steel products | 460 | 627 | (26.6)% |
+--------------------------+------------+------------+------------+
| Total | 14,333 | 17,143 | (16.4)% |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Steel segment revenues decreased by 49.9% to US$8,978 million in 2009 compared
with US$17,925 million in 2008. This decline reflected negative price dynamics
for steel products and lower sales volumes.
The proportion of revenues attributable to sales of construction products
decreased due to a significant decline in the sales volumes of construction
products at the Russian operations.
The proportion of revenues attributable to sales of railway products remained
unchanged despite a decrease in the proportion of volumes. This reflects the
fact that prices of railway products decreased less than other steel products.
The proportion of revenues attributable to sales of flat-rolled products
(primarily plate) decreased due to an above average decline in sales volumes
compared with other steel products, particularly with regard to the European
operations.
An increase in the proportion of revenues attributable to sales of tubular
products reflects relatively stable tubular products in North America towards
the end of 2008 and at the start of 2009, the result being a below average
decline in the prices of tubular goods compared to other steel products.
The proportion of revenues attributable to sales of semi-finished products
increased due to higher sales volumes of semis sold by the Russian and Ukrainian
operations to export markets.
Steel segment sales to the mining segment amounted to US$83 million in 2009
compared with US$178 million in 2008. The decrease is attributable to lower sale
prices and volumes.
Revenues from sales outside Russia amounted to approximately 70% of steel
segment revenues in 2009, compared with 61% in 2008. The increased share of
revenues from sales outside Russia in 2009 was primarily attributable to the
reallocation of steel volumes from the Russian market to Asian export markets.
Steel segment cost of revenues totalled US$8,122 million, or 90.5% of steel
segment revenues, in 2009 compared with US$12,662 million, or 70.6% of steel
segment revenues, in 2008. The decrease is attributable to the decline in sales
volumes and in the prices of raw materials together with staff optimisation
measures and the depreciation of local currencies against the US dollar.
In 2009, the steel segment profit (loss) from operations changed to a loss of
US$840 million compared with a profit of US$2,746 million in 2008.
In 2009, adjusted EBITDA in the steel segment totalled US$903 million, or 10.1%
of steel segment revenues, compared with US$4,671 million, or 26.1% of steel
segment revenues in 2008.
Mining Segment Results
+-------------------------+-----------+-----------+------------+
| Full year to 31 | 2009 | 2008 | Change |
| December | | | |
| (US$ million unless | | | |
| otherwise stated) | | | |
+-------------------------+-----------+-----------+------------+
| Revenues | 1,456 | 3,634 | (59.9)% |
+-------------------------+-----------+-----------+------------+
| (Loss)/profit from | (214) | 971 | (122.0)% |
| operations | | | |
+-------------------------+-----------+-----------+------------+
| Adjusted EBITDA | 279 | 1,395 | (80.0)% |
+-------------------------+-----------+-----------+------------+
| Adjusted EBITDA margin | 19.2% | 38.4% | |
+-------------------------+-----------+-----------+------------+
Mining Segment Sales*
+-------------+---------+--------+---------+--------+---------+
| | Year ended 31 December |
+-------------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+-------------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+-------------+---------+--------+---------+--------+---------+
| Iron | 840 | 57.7% | 2,213 | 60.9% | (62.0)% |
| ore | | | | | |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Iron | 311 | 21.4% | 625 | 17.2% | (50.2)% |
| ore | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Sinter | 158 | 10.9% | 885 | 24.4% | (82.1)% |
+-------------+---------+--------+---------+--------+---------+
| Pellets | 238 | 16.3% | 566 | 15.6% | (58.0)% |
+-------------+---------+--------+---------+--------+---------+
| Other | 133 | 9.1% | 137 | 3.8% | (2.9)% |
+-------------+---------+--------+---------+--------+---------+
| Coal | 562 | 38.6% | 1,251 | 34.4% | (55.1)% |
| products | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Coking | 137 | 9.4% | 259 | 7.1% | (47.1)% |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Coal | 268 | 18.4% | 719 | 19.8% | (62.7)% |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 124 | 8.5% | 265 | 7.3% | (53.2)% |
| coal | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Steam | 33 | 2.3% | 8 | 0.2% | 312.5% |
| coal | | | | | |
| concentrate | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Other | 54 | 3.7% | 170 | 4.7% | (68.2)% |
| revenues | | | | | |
+-------------+---------+--------+---------+--------+---------+
| Total | 1,456 | 100.0% | 3,634 | 100.0% | (59.9)% |
+-------------+---------+--------+---------+--------+---------+
+--------------------------+------------+------------+------------+
| Full year to 31 December | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+--------------------------+------------+------------+------------+
| Iron ore products | 18,326 | 21,739 | (15.7)% |
+--------------------------+------------+------------+------------+
| Iron ore concentrate | 5,644 | 6,554 | (13.9)% |
+--------------------------+------------+------------+------------+
| Sinter | 3,253 | 7,860 | (58.6)% |
+--------------------------+------------+------------+------------+
| Pellets | 5,479 | 5,273 | 3.9% |
+--------------------------+------------+------------+------------+
| Other | 3,950 | 2,052 | 92.5% |
+--------------------------+------------+------------+------------+
| Coal products | 11,634 | 11,703 | (0.6)% |
+--------------------------+------------+------------+------------+
| Coking coal | 3,967 | 3,117 | 27.3% |
+--------------------------+------------+------------+------------+
| Coal concentrate | 3,795 | 4,370 | (13.2)% |
+--------------------------+------------+------------+------------+
| Steam coal | 3,411 | 4,110 | (17.0)% |
+--------------------------+------------+------------+------------+
| Steam coal concentrate | 461 | 106 | 334.9% |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Mining segment revenues were down by 59.9% to US$1,456 million, compared with
US$3,634 million in 2008, primarily reflecting a decline in average prices of
iron ore and coal.
Sales volumes of iron ore products decreased by 15.7% in 2009 compared with
2008. Excluding the effect of the resale of iron ore products from UGOK (a
related party) in 2008, sales volumes of iron ore in 2009 decreased by just 1.1%
compared with 2008. Sales volumes of steam coal products decreased by 8.2% in
2009 compared with 2008, while sales volumes of coking coal increased by 3.7%.
In 2009 mining segment sales to the steel segment amounted to US$1,017 million,
or 69.8% of mining segment sales, compared with US$2,340 million, or 64.4% of
mining segment sales, in 2008.
Approximately 51% of the mining segment's third party sales in 2009 were to
customers in Russia compared with 29% in 2008. The higher share of third party
sales outside Russia in 2008 is largely attributable to the resale of iron ore
from UGOK, a related party, to export markets. There were no such resales in
2009.
The mining segment cost of revenues decreased by 42.7% from US$2,387 million in
2008 to US$1,368 million in 2009, primarily due to the decrease in raw
materials, transportation, staff, energy and other costs.
The mining segment profit (loss) from operations changed from a profit of US$971
million in 2008 to a loss of US$214 million in 2009.
Adjusted EBITDA in the mining segment decreased by 80.0% to US$279 million, or
19.2% of mining segment revenues in 2009, compared with US$1,395 million, or
38.4% of mining segment revenues, in 2008.
Vanadium Segment Results
+-------------------------+-----------+-----------+------------+
| Full year to 31 | 2009 | 2008 | Change |
| December | | | |
| (US$ million unless | | | |
| otherwise stated) | | | |
+-------------------------+-----------+-----------+------------+
| Revenues | 363 | 1,206 | (69.9)% |
+-------------------------+-----------+-----------+------------+
| (Loss)/profit from | (48) | 170 | (128.2)% |
| operations | | | |
+-------------------------+-----------+-----------+------------+
| Adjusted EBITDA | 10 | 200 | (95.0)% |
+-------------------------+-----------+-----------+------------+
| Adjusted EBITDA margin | 2.8% | 16.6% | |
+-------------------------+-----------+-----------+------------+
Vanadium Segment Sales*
+-----------+---------+--------+---------+--------+---------+
| | Year ended 31 December |
+-----------+-----------------------------------------------+
| | 2009 | 2008 | 2009 v |
| | | | 2008 |
+-----------+------------------+------------------+---------+
| | US$ | % of | US$ | % of | % |
| |million | total |million | total | change |
+-----------+---------+--------+---------+--------+---------+
| Vanadium | 60 | 16.5% | 290 | 24.1% | (79.3)% |
| in slag | | | | | |
+-----------+---------+--------+---------+--------+---------+
| Vanadium | 298 | 82.1% | 913 | 75.7% | (67.4)% |
| in | | | | | |
| alloys | | | | | |
| and | | | | | |
| chemicals | | | | | |
+-----------+---------+--------+---------+--------+---------+
| Other | 5 | 1.4% | 3 | 0.2% | 66.7% |
| revenues | | | | | |
+-----------+---------+--------+---------+--------+---------+
| Total | 363 | 100.0% | 1,206 | 100.0% | (69.9)% |
+-----------+---------+--------+---------+--------+---------+
+--------------------------+------------+------------+------------+
| Full year to 31 December | 2009 | 2008 | Change |
| ('000 tonnes) | | | |
+--------------------------+------------+------------+------------+
| Vanadium products | 18.4 | 26.4 | (30.3)% |
+--------------------------+------------+------------+------------+
| Vanadium in slag | 6.5 | 10.3 | (36.9)% |
+--------------------------+------------+------------+------------+
| Vanadium in alloys and | 11.9 | 16.1 | (26.1)% |
| chemicals | | | |
+--------------------------+------------+------------+------------+
* Including intersegment sales
Vanadium segment revenues decreased by 69.9% to US$363 million in 2009, compared
with US$1,206 million in 2008. The decrease is attributable to significantly
lower vanadium prices and sales volumes.
The vanadium segment cost of revenues fell by 60.7% from US$922 million in 2008
to US$362 million in 2009.
The vanadium segment profit (loss) from operations changed from a profit of
US$170 million in 2008 to a loss of US$48 million in 2009.
Adjusted EBITDA in the vanadium segment totalled US$10 million in 2009 compared
with US$200 million in 2008.
Other operations segment results
+--------------------------+------------+------------+------------+
| Full year to 31 December | 2009 | 2008 | Change |
| (US$ million unless | | | |
| otherwise stated) | | | |
+--------------------------+------------+------------+------------+
| Revenues | 765 | 1,022 | (25.1)% |
+--------------------------+------------+------------+------------+
| Profit from operations | 77 | 83 | (7.2)% |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA | 167 | 150 | 11.3% |
+--------------------------+------------+------------+------------+
| Adjusted EBITDA margin | 21.8% | 14.7% | |
+--------------------------+------------+------------+------------+
Evraz's revenues from other operations including logistics, port services, power
and heat generation and supporting activities totalled US$765 million in 2009, a
25.1% decrease compared with 2008 revenues.
Consolidated Group Financial Position
Cash flow
Cash flow from operating activities decreased from US$4,563 million in 2008 to
US$1,700 million in 2009 due to poor market conditions, resulting in decreased
profit margins.
Net cash from investing activities totalled US$183 million in 2009 compared with
net cash used in investing activities of US$3,736 million in 2008.
In 2009, Evraz's capital expenditure totalled US$441 million, including US$264
million in respect of its steel segment and US$148 million in respect of its
mining segment.
In 2009, net cash used in financing activities amounted to US$2,149 million
compared with US$127 million in 2008.
Balance sheet
As of 31 December 2009 total debt amounted to US$7,923 million, down from
US$9,986 million as of 31 December 2008. Cash and cash equivalents together with
short-term bank deposits amounted to US$697 million, down from US$955 million as
of 31 December 2008. 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$1,997 million as
of 31 December 2009 compared with approximately US$2,634 million as of 31
December 2008. (Please refer to Attachment 2 for calculation of liquidity)
As of 31 December 2009, Evraz had unutilised borrowing facilities of US$1,300
million, including US$819 million of committed facilities and US$481 million of
uncommitted facilities.
Net debt decreased to US$7,226 million as of 31 December 2009 compared with
US$9,031 million as of 31 December 2008. (Please refer to Attachment 3 for
calculation of net debt)
As of 31 December 2009, total assets amounted to US$23,424 million compared with
US$19,451 million as of 31 December 2008. This primarily reflected the surplus
arising from the revaluation of certain of the Group's assets as of 1 January
2009.
Evraz Group S.A. shareholders' equity, including reserves and accumulated
profits, increased to US$10,284 million as of 31 December 2009 compared with
US$4,672 million as of 31 December 2008, primarily due to the surplus arising
from the revaluation of certain of the Group's assets as of 1 January 2009.
# # #
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 and loss (gain) on disposal of
property, plant and equipment, foreign exchange gains/(losses). Evraz presents
an Adjusted EBITDA because it considers Adjusted EBITDA to be an important
supplemental measure of its operating performance and believes Adjusted EBITDA
is frequently used by securities analysts, investors and other interested
parties in the evaluation of companies in the same industry. Adjusted EBITDA is
not a measure of financial performance under IFRS and it should not be
considered as an alternative to net profit as a measure of operating performance
or to cash flows from operating activities as a measure of liquidity. Evraz's
calculation of Adjusted EBITDA may be different from the calculation used by
other companies and therefore comparability may be limited. Adjusted EBITDA has
limitations as an analytical tool and potential investors should not consider it
in isolation, or as a substitute for an analysis of our operating results as
reported under IFRS. Some of these limitations include:
Adjusted EBITDA does not reflect the impact of financing or financing costs on
Evraz's operating performance, which can be significant and could further
increase if Evraz were to incur more debt.
Adjusted EBITDA does not reflect the impact of income taxes on Evraz's operating
performance.
Adjusted EBITDA does not reflect the impact of depreciation and amortisation on
Evraz's operating performance. The assets of Evraz's businesses which are being
depreciated and/or amortised will have to be replaced in the future and such
depreciation and amortisation expense may approximate the cost to replace these
assets in the future. 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 Adjusted EBITDA to profit (loss) from operations is as
follows:
+-----------------------------------------+----------+----------+
| | Year ended 31 |
| | December |
+-----------------------------------------+---------------------+
| | 2009 | 2008 |
+-----------------------------------------+----------+----------+
| | (US$ million) |
+-----------------------------------------+---------------------+
| Consolidated Adjusted EBITDA | |
| reconciliation | |
+-----------------------------------------+---------------------+
| (Loss)/profit from operations | (1,047) | 3,632 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation, depletion and | 1,632 | 1,195 |
| amortisation | | |
+-----------------------------------------+----------+----------+
| Impairment of assets | 163 | 880 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 81 | 37 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (156) | 471 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 564 | - |
+-----------------------------------------+----------+----------+
| Consolidated Adjusted EBITDA | 1,237 | 6,215 |
+-----------------------------------------+----------+----------+
| Steel segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | (840) | 2,746 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 1,151 | 751 |
+-----------------------------------------+----------+----------+
| Impairment of assets | 168 | 821 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 56 | 11 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (54) | 342 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 422 | - |
+-----------------------------------------+----------+----------+
| Steel segment Adjusted EBITDA | 903 | 4,671 |
+-----------------------------------------+----------+----------+
| Mining segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | (214) | 971 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation, depletion and | 368 | 363 |
| amortisation | | |
+-----------------------------------------+----------+----------+
| Impairment of assets | (5) | 56 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 19 | 15 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss (gain) | (1) | (10) |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 112 | - |
+-----------------------------------------+----------+----------+
| Mining segment Adjusted EBITDA | 279 | 1,395 |
| | | |
+-----------------------------------------+----------+----------+
| Vanadium segment Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| (Loss)/profit from operations | (48) | 170 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 54 | 31 |
+-----------------------------------------+----------+----------+
| Foreign exchange gain | - | (1) |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 4 | - |
+-----------------------------------------+----------+----------+
| Vanadium segment Adjusted EBITDA | 10 | 200 |
+-----------------------------------------+----------+----------+
| Other operations Adjusted EBITDA | | |
| reconciliation | | |
+-----------------------------------------+----------+----------+
| Profit from operations | 77 | 83 |
+-----------------------------------------+----------+----------+
| Add: | | |
+-----------------------------------------+----------+----------+
| Depreciation and amortisation | 58 | 49 |
+-----------------------------------------+----------+----------+
| Impairment of assets | - | 3 |
+-----------------------------------------+----------+----------+
| Loss on disposal of property, plant & | 6 | 11 |
| equipment | | |
+-----------------------------------------+----------+----------+
| Foreign exchange loss | - | 4 |
+-----------------------------------------+----------+----------+
| Revaluation deficit | 26 | - |
+-----------------------------------------+----------+----------+
| Other operations Adjusted EBITDA | 167 | 150 |
| | | |
+-----------------------------------------+----------+----------+
Attachment 2
Liquidity
+--------------------------------------------+----------+--+------------+
| | 31 | 31 December |
| |December | 2008 |
| | 2009 | |
+--------------------------------------------+----------+---------------+
| | (US$ million) |
+--------------------------------------------+--------------------------+
| Liquidity Calculation | |
+--------------------------------------------+--------------------------+
| Cash and cash equivalents | 675 | 930 |
+--------------------------------------------+-------------+------------+
| Amounts available under credit facilities | 1,300 | 1,679 |
+--------------------------------------------+-------------+------------+
| Short-term bank deposits | 22 | 25 |
+--------------------------------------------+-------------+------------+
| Total estimated liquidity | 1,997 | 2,634 |
+--------------------------------------------+-------------+------------+
| | | | |
+--------------------------------------------+----------+--+------------+
Attachment 3
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:
+--------------------------------------------+----------+--+------------+
| | 31 | 31 December |
| |December | 2008 |
| | 2009 | |
+--------------------------------------------+----------+---------------+
| | (US$ million) |
+--------------------------------------------+--------------------------+
| Net Debt Calculation | |
+--------------------------------------------+--------------------------+
| Add: | | |
+--------------------------------------------+-------------+------------+
| Long-term loans, net of current portion | 5,931 | 6,064 |
| | | |
+--------------------------------------------+-------------+------------+
| Short-term loans and current portion of | 1,992 | 3,922 |
| long-term loans | | |
+--------------------------------------------+-------------+------------+
| Less: | | |
+--------------------------------------------+-------------+------------+
| Short-term bank deposits | (22) | (25) |
+--------------------------------------------+-------------+------------+
| Cash and cash equivalents | (675) | (930) |
+--------------------------------------------+-------------+------------+
| Net Debt | 7,226 | 9,031 |
+--------------------------------------------+-------------+------------+
| | | | |
+--------------------------------------------+----------+--+------------+
Evraz Group S.A.
Consolidated Statement of Operations
(In millions of US dollars, except for per share information)
+-------------------------------------+-------------+-------------+
| | Year ended 31 December |
+-------------------------------------+---------------------------+
| | 2009 | 2008* |
+-------------------------------------+-------------+-------------+
| Revenue | | |
+-------------------------------------+-------------+-------------+
| Sale of goods | 9,505 | 19,990 |
+-------------------------------------+-------------+-------------+
| Rendering of services | 267 | 390 |
+-------------------------------------+-------------+-------------+
| | 9,772 | 20,380 |
+-------------------------------------+-------------+-------------+
| Cost of revenue | (8,756) | (13,463) |
+-------------------------------------+-------------+-------------+
| Gross profit | 1,016 | 6,917 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Selling and distribution costs | (623) | (856) |
+-------------------------------------+-------------+-------------+
| General and administrative expenses | (645) | (895) |
+-------------------------------------+-------------+-------------+
| Social and social infrastructure | (53) | (114) |
| maintenance expenses | | |
+-------------------------------------+-------------+-------------+
| Loss on disposal of property, plant | (81) | (37) |
| and equipment | | |
+-------------------------------------+-------------+-------------+
| Impairment of assets | (163) | (880) |
+-------------------------------------+-------------+-------------+
| Revaluation deficit on property, | (564) | - |
| plant and equipment | | |
+-------------------------------------+-------------+-------------+
| Foreign exchange gains/(losses), | 156 | (471) |
| net | | |
+-------------------------------------+-------------+-------------+
| Other operating income | 38 | 28 |
+-------------------------------------+-------------+-------------+
| Other operating expenses | (128) | (60) |
+-------------------------------------+-------------+-------------+
| Profit/(loss) from operations | (1,047) | 3,632 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Interest income | 40 | 57 |
+-------------------------------------+-------------+-------------+
| Interest expense | (677) | (655) |
+-------------------------------------+-------------+-------------+
| Share of profits/(losses) of joint | (8) | 194 |
| ventures and associates | | |
+-------------------------------------+-------------+-------------+
| Gain/(loss) on financial assets and | 97 | (129) |
| liabilities, net | | |
+-------------------------------------+-------------+-------------+
| Gain/(loss) on disposal groups | (19) | (43) |
| classified as held for sale, net | | |
+-------------------------------------+-------------+-------------+
| Excess of interest in the net fair | 10 | - |
| value of acquiree's identifiable | | |
| assets, liabilities and contingent | | |
| liabilities over the cost of | | |
| acquisition | | |
+-------------------------------------+-------------+-------------+
| Other non-operating gains/(losses), | 4 | (5) |
| net | | |
+-------------------------------------+-------------+-------------+
| Profit/(loss) before tax | (1,600) | 3,051 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Income tax benefit/(expense) | 339 | (1,192) |
+-------------------------------------+-------------+-------------+
| Net profit/(loss) | (1,261) | 1,859 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Attributable to: | | |
+-------------------------------------+-------------+-------------+
| Equity holders of the parent entity | (1,251) | 1,797 |
+-------------------------------------+-------------+-------------+
| Minority interests | (10) | 62 |
+-------------------------------------+-------------+-------------+
| | (1,261) | 1,859 |
+-------------------------------------+-------------+-------------+
| Earnings/(losses) per share: | | |
+-------------------------------------+-------------+-------------+
| basic, for profit/(loss) | (9.30) | 14.55 |
| attributable to equity holders of | | |
| the parent entity, US dollars | | |
+-------------------------------------+-------------+-------------+
| diluted, for profit/(loss) | (9.30) | 14.50 |
| attributable to equity holders of | | |
| the parent entity, US dollars | | |
+-------------------------------------+-------------+-------------+
* The amounts shown here do not correspond to the 2008 financial statements and
reflect adjustments made in connection with the completion of initial accounting
as detailed in Note 4 to the Consolidated Financial Statements
Evraz Group S.A.
Consolidated Statement of Comprehensive Income
(In millions of US dollars, except for per share information)
+-------------------------------------+-------------+-------------+
| | Year ended 31 December |
+-------------------------------------+---------------------------+
| | 2009 | 2008* |
+-------------------------------------+-------------+-------------+
| Net profit/(loss) | (1,261) | 1,859 |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Other comprehensive income | | |
+-------------------------------------+-------------+-------------+
| Effect of translation to | 6 | (2,288) |
| presentation currency | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Net gains/(losses) on | 12 | (150) |
| available-for-sale financial assets | | |
+-------------------------------------+-------------+-------------+
| Net gains/(losses) on | (8) | 150 |
| available-for-sale financial assets | | |
| reclassified to profit or loss | | |
+-------------------------------------+-------------+-------------+
| Income tax effect | - | - |
+-------------------------------------+-------------+-------------+
| | 4 | - |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Deferred income tax benefit | - | 7 |
| resulting from reduction in tax | | |
| rate recognised in equity | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Surplus on revaluation of property, | 7,901 | - |
| plant and equipment of the Group's | | |
| subsidiaries | | |
+-------------------------------------+-------------+-------------+
| Deficit on revaluation of property, | (38) | - |
| plant and equipment recognised in | | |
| other comprehensive income | | |
+-------------------------------------+-------------+-------------+
| Decrease in revaluation surplus in | (98) | - |
| connection with the impairment of | | |
| property, plant and equipment | | |
+-------------------------------------+-------------+-------------+
| Impairment losses reversed through | 55 | - |
| other comprehensive income | | |
+-------------------------------------+-------------+-------------+
| Income tax effect | (1,653) | - |
+-------------------------------------+-------------+-------------+
| | 6,167 | - |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Surplus on revaluation of property, | 66 | - |
| plant and equipment of the Group's | | |
| joint ventures and associates | | |
+-------------------------------------+-------------+-------------+
| Effect of translation to | (13) | (116) |
| presentation currency | | |
+-------------------------------------+-------------+-------------+
| Share of other comprehensive income | 53 | (116) |
| of joint ventures and associates | | |
| accounted for using the equity | | |
| method | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Total other comprehensive | 6,230 | (2,397) |
| income/(loss) | | |
+-------------------------------------+-------------+-------------+
| Total comprehensive income/(loss), | 4,969 | (538) |
| net of tax | | |
+-------------------------------------+-------------+-------------+
| | | |
+-------------------------------------+-------------+-------------+
| Attributable to: | | |
+-------------------------------------+-------------+-------------+
| Equity holders of the parent entity | 4,889 | (522) |
+-------------------------------------+-------------+-------------+
| Minority interests | 80 | (16) |
+-------------------------------------+-------------+-------------+
| | 4,969 | (538) |
+-------------------------------------+-------------+-------------+
* The amounts shown here do not correspond to the 2008 financial statements and
reflect adjustments made in connection with the completion of initial accounting
as detailed in Note 4 to the Consolidated Financial Statements
Evraz Group S.A.
Consolidated Statement of Financial Position
(In millions of US dollars)
+-------------------------------------+-------------+-------------+--------------+
| | 31 December | 31 December | |
| | 2009 | 2008* | |
+-------------------------------------+-------------+-------------+--------------+
| Assets | | | |
+-------------------------------------+-------------+-------------+--------------+
| Non-current assets | | | |
+-------------------------------------+-------------+-------------+--------------+
| Property, plant and equipment | 14,941 | 9,012 | |
+-------------------------------------+-------------+-------------+--------------+
| Intangible assets other than | 1,098 | 1,108 | |
| goodwill | | | |
+-------------------------------------+-------------+-------------+--------------+
| Goodwill | 2,211 | 2,167 | |
+-------------------------------------+-------------+-------------+--------------+
| Investments in joint ventures and | 687 | 551 | |
| associates | | | |
+-------------------------------------+-------------+-------------+--------------+
| Deferred income tax assets | 40 | 44 | |
+-------------------------------------+-------------+-------------+--------------+
| Other non-current financial assets | 66 | 118 | |
+-------------------------------------+-------------+-------------+--------------+
| Other non-current assets | 128 | 160 | |
+-------------------------------------+-------------+-------------+--------------+
| | 19,171 | 13,160 | |
+-------------------------------------+-------------+-------------+--------------+
| Current assets | | | |
+-------------------------------------+-------------+-------------+--------------+
| Inventories | 1,886 | 2,416 | |
+-------------------------------------+-------------+-------------+--------------+
| Trade and other receivables | 1,001 | 1,369 | |
+-------------------------------------+-------------+-------------+--------------+
| Prepayments | 134 | 76 | |
+-------------------------------------+-------------+-------------+--------------+
| Loans receivable | 1 | 108 | |
+-------------------------------------+-------------+-------------+--------------+
| Receivables from related parties | 107 | 137 | |
+-------------------------------------+-------------+-------------+--------------+
| Income tax receivable | 58 | 262 | |
+-------------------------------------+-------------+-------------+--------------+
| Other taxes recoverable | 258 | 397 | |
+-------------------------------------+-------------+-------------+--------------+
| Other current taxes | 120 | 589 | |
+-------------------------------------+-------------+-------------+--------------+
| Cash and cash equivalents | 675 | 930 | |
+-------------------------------------+-------------+-------------+--------------+
| | 4,240 | 6,284 | |
+-------------------------------------+-------------+-------------+--------------+
| Assets of disposal groups | 13 | 7 | |
| classified as held for sale | | | |
+-------------------------------------+-------------+-------------+--------------+
| | 4,253 | 6,291 | |
+-------------------------------------+-------------+-------------+--------------+
| Total assets | 23,424 | 19,451 | |
+-------------------------------------+-------------+-------------+--------------+
| Equity and liabilities | | | |
+-------------------------------------+-------------+-------------+--------------+
| Equity | | | |
+-------------------------------------+-------------+-------------+--------------+
| Equity attributable to equity | | | |
| holders of the parent entity | | | |
+-------------------------------------+-------------+-------------+--------------+
| Issued capital | 375 | 332 | |
+-------------------------------------+-------------+-------------+--------------+
| Treasury shares | - | (9) | |
+-------------------------------------+-------------+-------------+--------------+
| Additional paid-in capital | 1,739 | 1,054 | |
+-------------------------------------+-------------+-------------+--------------+
| Revaluation surplus | 6,338 | 218 | |
+-------------------------------------+-------------+-------------+--------------+
| Legal reserve | 36 | 30 | |
+-------------------------------------+-------------+-------------+--------------+
| Unrealised gains and losses | 4 | - | |
+-------------------------------------+-------------+-------------+--------------+
| Accumulated profits | 3,164 | 4,377 | |
+-------------------------------------+-------------+-------------+--------------+
| Translation difference | (1,372) | (1,330) | |
+-------------------------------------+-------------+-------------+--------------+
| | 10,284 | 4,672 | |
+-------------------------------------+-------------+-------------+--------------+
| Minority interests | 324 | 245 | |
+-------------------------------------+-------------+-------------+--------------+
| | 10,608 | 4,917 | |
+-------------------------------------+-------------+-------------+--------------+
| Non-current liabilities | | | |
+-------------------------------------+-------------+-------------+--------------+
| Long-term loans | 5,931 | 6,064 | |
+-------------------------------------+-------------+-------------+--------------+
| Deferred income tax liabilities | 2,537 | 1,389 | |
+-------------------------------------+-------------+-------------+--------------+
| Finance lease liabilities | 58 | 40 | |
+-------------------------------------+-------------+-------------+--------------+
| Employee benefits | 307 | 292 | |
+-------------------------------------+-------------+-------------+--------------+
| Provisions | 176 | 153 | |
+-------------------------------------+-------------+-------------+--------------+
| Other long-term liabilities | 68 | 58 | |
+-------------------------------------+-------------+-------------+--------------+
| | 9,077 | 7,996 | |
+-------------------------------------+-------------+-------------+--------------+
| Current liabilities | | | |
+-------------------------------------+-------------+-------------+--------------+
| Trade and other payables | 1,069 | 1,479 | |
+-------------------------------------+-------------+-------------+--------------+
| Advances from customers | 112 | 107 | |
+-------------------------------------+-------------+-------------+--------------+
| Short-term loans and current | 1,992 | 3,922 | |
| portion of long-term loans | | | |
+-------------------------------------+-------------+-------------+--------------+
| Payables to related parties | 235 | 322 | |
+-------------------------------------+-------------+-------------+--------------+
| Income tax payable | 108 | 156 | |
+-------------------------------------+-------------+-------------+--------------+
| Other taxes payable | 140 | 154 | |
+-------------------------------------+-------------+-------------+--------------+
| Current portion of finance lease | 17 | 15 | |
| liabilities | | | |
+-------------------------------------+-------------+-------------+--------------+
| Provisions | 35 | 63 | |
+-------------------------------------+-------------+-------------+--------------+
| Amounts payable under put options | 17 | | |
| for shares of subsidiaries | | - | |
+-------------------------------------+-------------+-------------+--------------+
| Dividends payable by the parent | - | | |
| entity to its shareholders | | 309 | |
+-------------------------------------+-------------+-------------+--------------+
| Dividends payable by the Group's | 13 | 11 | |
| subsidiaries to minority | | | |
| shareholders | | | |
+-------------------------------------+-------------+-------------+--------------+
| | 3,738 | 6,538 | |
+-------------------------------------+-------------+-------------+--------------+
| Liabilities directly associated | 1 | - | |
| with disposal groups classified as | | | |
| held for sale | | | |
+-------------------------------------+-------------+-------------+--------------+
| | 3,739 | 6,538 | |
+-------------------------------------+-------------+-------------+--------------+
| Total equity and liabilities | 23,424 | 19,451 | |
+-------------------------------------+-------------+-------------+--------------+
* The amounts shown here do not correspond to the 2008 financial statements and
reflect adjustments made in connection with the completion of initial accounting
as detailed in Note 4 to the Consolidated Financial Statements
Evraz Group S.A.
Consolidated Statement of Cash Flows
(In millions of US dollars)
+--------------------------------------+--------------+--------------+
| | Year ended 31 December |
+--------------------------------------+-----------------------------+
| | 2009 | 2008* |
+--------------------------------------+--------------+--------------+
| Cash flows from operating activities | | |
+--------------------------------------+--------------+--------------+
| Net profit/(loss) | (1,261) | 1,859 |
+--------------------------------------+--------------+--------------+
| Adjustments to reconcile net | | |
| profit/(loss) to net cash flows from | | |
| operating activities: | | |
+--------------------------------------+--------------+--------------+
| Deferred income tax | (524) | (402) |
| benefit/(expense) | | |
+--------------------------------------+--------------+--------------+
| Depreciation, depletion and | 1,632 | 1,195 |
| amortisation | | |
+--------------------------------------+--------------+--------------+
| Loss on disposal of property, plant | 81 | 37 |
| and equipment | | |
+--------------------------------------+--------------+--------------+
| Impairment of assets | 163 | 880 |
+--------------------------------------+--------------+--------------+
| Revaluation deficit on property, | 564 | - |
| plant and equipment | | |
+--------------------------------------+--------------+--------------+
| Foreign exchange (gains)/losses, net | (156) | 471 |
+--------------------------------------+--------------+--------------+
| Interest income | (40) | (57) |
+--------------------------------------+--------------+--------------+
| Interest expense | 677 | 655 |
+--------------------------------------+--------------+--------------+
| Share of (profits)/losses of | 8 | (194) |
| associates and joint ventures | | |
+--------------------------------------+--------------+--------------+
| (Gain)/loss on financial assets and | (97) | 129 |
| liabilities, net | | |
+--------------------------------------+--------------+--------------+
| Loss on disposal groups classified | 19 | 43 |
| as held for sale, net | | |
+--------------------------------------+--------------+--------------+
| Excess of interest in the net fair | (10) | - |
| value of acquiree's identifiable | | |
| assets, liabilities and contingent | | |
| liabilities over the cost of | | |
| acquisition | | |
+--------------------------------------+--------------+--------------+
| Other non-operating (gains)/losses, | (4) | 5 |
| net | | |
+--------------------------------------+--------------+--------------+
| Bad debt expense | 41 | 33 |
+--------------------------------------+--------------+--------------+
| Changes in provisions, employee | (16) | 25 |
| benefits and other long-term assets | | |
| and liabilities | | |
+--------------------------------------+--------------+--------------+
| Expense arising from the share | 6 | 35 |
| option plans | | |
+--------------------------------------+--------------+--------------+
| Share-based payments under | (35) | - |
| cash-settled award | | |
+--------------------------------------+--------------+--------------+
| Other | (2) | 12 |
+--------------------------------------+--------------+--------------+
| | 1,046 | 4,726 |
+--------------------------------------+--------------+--------------+
| | | |
+--------------------------------------+--------------+--------------+
| Changes in working capital: | | |
+--------------------------------------+--------------+--------------+
| Inventories | 682 | (499) |
+--------------------------------------+--------------+--------------+
| Trade and other receivables | 438 | 345 |
+--------------------------------------+--------------+--------------+
| Prepayments | (52) | 100 |
+--------------------------------------+--------------+--------------+
| Receivables from/payables to related | (162) | 165 |
| parties | | |
+--------------------------------------+--------------+--------------+
| Taxes recoverable | 238 | (355) |
+--------------------------------------+--------------+--------------+
| Other assets | (56) | (3) |
+--------------------------------------+--------------+--------------+
| Trade and other payables | (353) | 238 |
+--------------------------------------+--------------+--------------+
| Advances from customers | 1 | (203) |
+--------------------------------------+--------------+--------------+
| Taxes payable | (73) | 51 |
+--------------------------------------+--------------+--------------+
| Other liabilities | (9) | (2) |
+--------------------------------------+--------------+--------------+
| Net cash flows from operating | 1,700 | 4,563 |
| activities | | |
+--------------------------------------+--------------+--------------+
| Cash flows from investing activities | | |
+--------------------------------------+--------------+--------------+
| Issuance of loans receivable to | (28) | (1) |
| related parties | | |
+--------------------------------------+--------------+--------------+
| Proceeds from repayment of loans | 40 | 32 |
| issued to related parties, including | | |
| interest | | |
+--------------------------------------+--------------+--------------+
| Issuance of loans receivable | (3) | (147) |
+--------------------------------------+--------------+--------------+
| Proceeds from repayment of loans | 114 | 33 |
| receivable, including interest | | |
+--------------------------------------+--------------+--------------+
| Proceeds from the transaction with a | 506 | - |
| 49% ownership interest in NS Group | | |
+--------------------------------------+--------------+--------------+
| Purchases of subsidiaries, net of | (16) | (1,914) |
| cash acquired | | |
+--------------------------------------+--------------+--------------+
| Purchases of minority interests | (8) | (120) |
+--------------------------------------+--------------+--------------+
| Purchases of other investments | (67) | (896) |
+--------------------------------------+--------------+--------------+
| Sale of other investments | 48 | 99 |
+--------------------------------------+--------------+--------------+
| Restricted deposits at banks in | (16) | 3 |
| respect of investing activities | | |
+--------------------------------------+--------------+--------------+
| Short-term deposits at banks, | 20 | 29 |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Purchases of property, plant and | (441) | (1,103) |
| equipment and intangible assets | | |
+--------------------------------------+--------------+--------------+
| Proceeds from disposal of property, | 6 | 27 |
| plant and equipment | | |
+--------------------------------------+--------------+--------------+
| Proceeds from sale of disposal | 28 | 161 |
| groups classified as held for sale, | | |
| net of transaction costs | | |
+--------------------------------------+--------------+--------------+
| Dividends received | 1 | 70 |
+--------------------------------------+--------------+--------------+
| Other investing activities, net | (1) | (9) |
+--------------------------------------+--------------+--------------+
| Net cash flows from/(used in) | 183 | (3,736) |
| investing activities | | |
+--------------------------------------+--------------+--------------+
| Cash flows from financing activities | | |
+--------------------------------------+--------------+--------------+
| Issue of shares, net of transaction | 310 | (1) |
| costs of $5 million, $1 and $nil, | | |
| respectively | | |
+--------------------------------------+--------------+--------------+
| Repurchase of vested share options | (3) | (77) |
+--------------------------------------+--------------+--------------+
| Purchase of treasury shares | (5) | (197) |
+--------------------------------------+--------------+--------------+
| Sale of treasury shares | 7 | 81 |
+--------------------------------------+--------------+--------------+
| Contribution from/(distribution to) | 65 | (68) |
| a shareholder | | |
+--------------------------------------+--------------+--------------+
| Dividends paid by the parent entity | (90) | (1,276) |
| to its shareholders | | |
+--------------------------------------+--------------+--------------+
| Dividends paid by the Group's | (2) | (81) |
| subsidiaries to minority | | |
| shareholders | | |
+--------------------------------------+--------------+--------------+
| Proceeds from bank loans and notes | 3,427 | 5,657 |
+--------------------------------------+--------------+--------------+
| Repayment of bank loans and notes, | (4,987) | (3,949) |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Net proceeds /(repayment) from bank | (794) | (54) |
| overdrafts and credit lines, | | |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Payments under covenants reset | (85) | - |
+--------------------------------------+--------------+--------------+
| Restricted deposits at banks in | 1 | - |
| respect of financing activities | | |
+--------------------------------------+--------------+--------------+
| Repayment of loans provided by | - | (21) |
| related parties, including interest | | |
+--------------------------------------+--------------+--------------+
| Payments under finance leases, | (31) | (20) |
| including interest | | |
+--------------------------------------+--------------+--------------+
| Payments of restructured | - | (121) |
| liabilities, including interest | | |
+--------------------------------------+--------------+--------------+
| Proceeds from sale-leaseback | 38 | - |
+--------------------------------------+--------------+--------------+
| Net cash flows from/(used in) | (2,149) | (127) |
| financing activities | | |
+--------------------------------------+--------------+--------------+
| Effect of foreign exchange rate | 11 | (97) |
| changes on cash and cash equivalents | | |
+--------------------------------------+--------------+--------------+
| Net increase/(decrease) in cash and | (255) | 603 |
| cash equivalents | | |
+--------------------------------------+--------------+--------------+
| Cash and cash equivalents at | 930 | 327 |
| beginning of year | | |
+--------------------------------------+--------------+--------------+
| Cash and cash equivalents at end of | 675 | 930 |
| year | | |
+--------------------------------------+--------------+--------------+
| Supplementary cash flow information: | | |
+--------------------------------------+--------------+--------------+
| Cash flows during the year: | | |
+--------------------------------------+--------------+--------------+
| Interest paid | (586) | (565) |
+--------------------------------------+--------------+--------------+
| Interest received | 29 | 44 |
+--------------------------------------+--------------+--------------+
| Income taxes paid by the Group | (141) | (1,680) |
+--------------------------------------+--------------+--------------+
* The amounts shown here do not correspond to the 2008 financial statements and
reflect adjustments made in connection with the completion of initial accounting
as detailed in Note 4 to the Consolidated Financial Statements
This information is provided by RNS
The company news service from the London Stock Exchange
END
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