Severstal reports Q1 2019 operational results (799299)

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 PAO Severstal (SVST) 
Severstal reports Q1 2019 operational results 
 
12-Apr-2019 / 09:02 MSK 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
      Severstal reports Q1 2019 operational results 
 
Moscow, Russia - 12 April 2019 - PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), 
  one of the world's leading vertically integrat­­ed steel and steel-related 
      mining companies, today announces its operational results for Q1 2019. 
 
            Q1 2019 GROUP HIGHLIGHTS 
 
  · Hot metal output increased 6% q/q in Q1 2019 to 2.36 mln tonnes (Q4 
  2018: 2.23 mln tonnes) following short-term maintenance works at BF#2 in 
  the previous quarter. Crude steel production grew to 3.04 mln tonnes (Q4 
  2018: 2.94 mln tonnes) reflecting an increase in pig iron production and 
  production growth of EAF billets. 
 
  · Consolidated steel product sales increased 3% q/q to 2.83 mln tonnes in 
  Q1 2019 (Q4 2018: 2.76 mln tonnes), following short-term maintenance works 
  at rolling-mill facilities in the previous quarter and an increase in 
  productivity of aggregates. The share of domestic sales rose to 65% due to 
  their increased attractiveness of domestic sales (Q4 2018: 62%). 
 
  · The share of high value-added (HVA) products within the sales portfolio 
  remained flat at 44% (Q4 2018: 44%), driven by a decline in sales of 
  semi-finished products, which was offset by higher sales of galvanised, 
  colour coated and hot rolled thick plate. 
 
  · Coking coal concentrate sales volumes from Vorkutaugol declined 1% due 
  to long-wall repositionings at Vorgashorskaya, Zapolyarnaya and 
  Komsomolskaya mines, but remained at historically high levels reflecting 
  the high production rate. 
 
  · Iron ore pellet sales declined 4% to 2.83 mln tonnes (Q4 2018: 2.94 mln 
  tonnes) as a result of lower production volumes in Q1 2019 and a stock 
  sell-off in the previous quarter. 
 
      SUMMARY OF KEY PRODUCTION, SALES VOLUMES 
 
Production,  Q1 2019 Q4 2018 Change, % Q1 2019 Q1 2018 Change, % 
thousands of 
tonnes 
Crude Steel   3,044   2,941     4%      3,044   3,033     0% 
(Russian 
Steel) 
Hot metal     2,363   2,233     6%      2,363   2,347     1% 
(Russian 
Steel) 
 
Sales        Q1 2019 Q4 2018 Change, % Q1 2019 Q1 2018 Change, % 
volumes, 
thousands of 
tonnes 
Coking coal   1,031   1,043    (1%)     1,031    628      64% 
concentrate 
Iron ore      2,832   2,943    (4%)     2,832   2,377     19% 
pellets 
Iron ore      1,301   1,430    (9%)     1,301   1,292     1% 
concentrate 
Total steel   2,832   2,755     3%      2,832   2,864    (1%) 
products 
(Consolidate 
d) 
Total steel   2,843   2,766     3%      2,843   2,874    (1%) 
products 
(Russian 
Steel) 
 
High value   Q1 2019 Q4 2018 Change, % Q1 2019 Q1 2018 Change, % 
added steel 
products, % 
Severstal      44%     44%   (0 ppts)    44%     45%   (1 ppts) 
(Consolidate 
d) 
Severstal      44%     44%   (0 ppts)    44%     45%   (1 ppts) 
Russian 
Steel 
 
      SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES) 
 
Sales volumes, thousands   Q1 2019  Q4  Change,  Q1  Q1  Change, 
of tonnes                          2018    %    2019 201    % 
                                                      8 
Coal:                   532        544   (2%)   532  404   32% 
Coking coal             157        169   (7%)   157  46    n/a 
concentrate 
Steam coal              375        375    0%    375  358   5% 
Iron ore:              1,656       2,12  (22%)  1,65 1,4   15% 
                                    8            6   41 
Iron ore pellets       1,302       1,87  (30%)  1,30 1,1   10% 
                                    1            2   88 
Iron ore                354        257    38%   354  253   40% 
concentrate 
Semi-finished           121        157   (23%)  121  256  (53%) 
products 
Rolled products:       2,311       2,18   6%    2,31 2,1   7% 
                                    5            1   66 
Hot-rolled coil        1,102       1,01   8%    1,10 963   14% 
                                    7            2 
Hot-rolled plate        233        210    11%   233  198   18% 
Cold-rolled coil        275        296   (7%)   275  389  (29%) 
Galvanised and          237        207    14%   237  198   20% 
metallic coated 
coil 
Colour coated           102         97    5%    102  67    52% 
coil 
Long products           362        358    1%    362  351   3% 
Downstream              400        413   (3%)   400  442  (10%) 
products: 
Metalware               126        136   (7%)   126  128  (2%) 
products 
Large diameter          97         107   (9%)    97  119  (18%) 
pipes 
Other tubes,            177        170    4%    177  195  (9%) 
pipes, formed 
shapes 
 
      SEVERSTAL RESOURCES 
 
· Coking coal concentrate sales volumes from Vorkutaugol declined 1% q/q 
due to long-wall repositionings at the Vorgashorskaya, Zapolyarnaya and 
Komsomolskaya mines, but remained at historically high levels as a result 
of high production rates. Internal coking coal concentrate remained almost 
flat q/q as the Company maintained high level of sales to third parties 
due to a favourable pricing environment in the local market. 
 
· Steam coal sales at Vorkutaugol remained almost flat in Q1 2019 vs Q4 
2018 but increased by 5% y/y, reflecting production growth. 
 
· Iron ore pellet sales declined 4% to 2.83 mln tonnes (Q4 2018: 2.94 mln 
tonnes) as a result of lower production volumes and stock sell-off in Q4 
2018. 
 
· Iron ore concentrate sales decreased 9% to 1.30 mln tonnes (Q4 2018: 
1.43 mln tonnes) due to seasonal factors and short-term maintenance works. 
 
Sales        Q1 2019 Q4 2018 Change, % Q1 2019 Q1 2018 Change, % 
volumes, 
thousands of 
tonnes 
Coal:         1,406   1,417    (1%)     1,406    986      43% 
Coking coal   1,031   1,043    (1%)     1,031    628      64% 
concentrate 
Steam coal     375     374      0%       375     358      5% 
Iron ore:     4,133   4,373    (5%)     4,133   3,669     13% 
Iron ore      2,832   2,943    (4%)     2,832   2,377     19% 
pellets 
Iron ore      1,301   1,430    (9%)     1,301   1,292     1% 
concentrate 
 
      SEVERSTAL RUSSIAN STEEL ('RSD') 
 
· RSD steel product sales increased 3% to 2.84 mln tonnes in Q1 2019 
compared with the previous quarter (Q4 2018: 2.77 mln tonnes), following 
short-term maintenance works at rolling-mill facilities in the previous 
quarter and an increase in the productivity of aggregates. The share of 
domestic sales rose to 65% due to the increased attractiveness of domestic 
sales (Q4 2018: 62%). 
 
· The share of high value-added (HVA) products within the sales portfolio 
remained flat at 44% (Q4 2018: 44%), driven by a decline in sales of 
semi-finished products and higher sales of galvanised, colour coated and 
hot rolled thick plate. 
 
· Severstal increased production of colour-coated and galvanised products 
following the launch of new product lines, which reached their full 
utilisation rates in Q1 2019. 
 
· LDP sales volumes declined 9% q/q due to specific factors with the 
product range at the Izhora Pipe Mill (IPM) where the utilisation rate 
continued to remained high in Q1 2019. In February 2019 IPM has won 
several tenders to supply PAO Gazprom with over 200,000 tonnes of large 
diameter pipes. The products will be used in the development of gas 
transmission capacities for the Unified Gas Supply System in the 
North-West Region (NEGP), as well as the construction of the 
Kovykta-Chayanda section of the Power of Siberia gas pipeline. Thick plate 
sales increased 11% q/q. 
 
· Average selling prices for the majority of steel products declined in Q1 
2019 in line with global benchmarks. 
 
Sales volumes,  Q1 2019   Q4   Change, % Q1 2019  Q1   Change, 
thousands of             2018                    2018     % 
tonnes 
Total steel      2,843  2,766     3%      2,843  2,874   (1%) 
products 
Semi-finished     121    157     (23%)     121    256   (53%) 
products 
Rolled           2,322  2,194     6%      2,322  2,176    7% 
products: 
Hot-rolled coil  1,102  1,017     8%      1,102   963    14% 
Hot-rolled        233    210      11%      233    198    18% 
plate 
Cold-rolled       275    296     (7%)      275    389   (29%) 
coil 
Galvanised and    237    207      14%      237    198    20% 
metallic coated 
coil 
Colour coated     102     97      5%       102    67     52% 
coil 
Long products     373    367      2%       373    361     3% 
Downstream        400    415     (4%)      400    442   (10%) 
products: 
Metalware         126    137     (8%)      126    128    (2%) 
products 
Large diameter    97     107     (9%)      97     119   (18%) 
pipes 
Other tubes,      177    171      4%       177    195    (9%) 
pipes, formed 
shapes 
 
Sales price,    Q1 2019   Q4   Change, % Q1 2019  Q1   Change, 
$/tonne                  2018                    2018     % 
Semi-finished     423    444     (5%)      423    428    (1%) 
products 
Hot-rolled coil   494    526     (6%)      494    551   (10%) 
Hot-rolled        635    683     (7%)      635    741   (14%) 
plate 
Cold-rolled       592    611     (3%)      592    626    (5%) 
coil 
Galvanised and    709    735*    (4%)      709    734    (3%) 
metallic coated 
coil 
Colour coated     849    899     (6%)      849    899    (6%) 
coil 
Long products     449    452     (1%)      449    496    (9%) 
Metalware         948    958     (1%)      948   1,013   (6%) 
products 
Large diameter   1,008   982      3%      1,008  1,284  (21%) 
pipes 
Other tubes,      568    561      1%       568    602    (6%) 
pipes, formed 
shapes 
 
Notes: 
 
1) All production data is reported in thousands of tonnes; 
 
2) Sales prices are stated on EXW basis; 
 
3) Segmental data includes intercompany sales; 
 
4) Semi-finished products include pig iron, slabs, billets, ingots, steel 

casting and forgings; 
 
5) Large diameter pipes include all pipes with a diameter between 820 and 
1420 mm. 
 
Contacts 
 
Investor Relations 
 
Evgeny Belov 
 
T: [phone] ext. 6445 
 
[e-mail] 
 
Public Relations 
 
Anastasia Mishanina 
 
T: [phone] ext. 6457 
 
[e-mail] 
 
Severstal's financial communications agency - Hudson Sandler 
 
Andrew Leach / Emily Dillon 
 
T: [phone] 
 
*** 
 
 P?? Severstal is one of the world's leading vertically-integrated steel and 
   steel related mining companies, with assets in Russia, Latvia and Poland. 
   Severstal is listed on RTS and MICEX and the company's GDRs are traded on 
  the LSE. Severstal reported revenue of $8,580 million and EBITDA of $3,142 
    million in 2018. Severstal's crude steel production in 2018 reached 12.0 
            million tonnes. www.severstal.com [1] 
 
ISIN:          US8181503025 
Category Code: TST 
TIDM:          SVST 
LEI Code:      213800OKDPTV6K4ONO53 
Sequence No.:  8188 
EQS News ID:   799299 
 
End of Announcement EQS News Service 
 
 
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April 12, 2019 02:02 ET (06:02 GMT)