Severstal reports Q3 & 9M 2020 operational results (1139893)

 
 PAO Severstal (SVST) 
Severstal reports Q3 & 9M 2020 operational results 
 
09-Oct-2020 / 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 Q3 & 9M 2020 operational results 
 
Moscow, Russia - 9 October 2020 - PAO Severstal (MOEX: CHMF; LSE: SVST), one 
 of the world's leading vertically integrated steel and steel-related mining 
        companies, today announces its operational results for Q3 & 9M 2020. 
 
            Q3 2020 GROUP HIGHLIGHTS 
 
  ? Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2 
  2020: 2.33 mln tonnes) following the completion of maintenance works at 
  blast furnace facilities in the previous quarter. Crude steel production 
  increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported 
  by growth in hot metal output. 
 
  ? Consolidated sales of steel products increased 18% q/q to 3.01 mln 
  tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth, 
  a lower share of export shipments with a longer realisation period vs the 
  previous quarter and finished goods stock reduction. 
 
  ? The Company increased its share of domestic steel shipments to 63% (Q2 
  2020: 56%) in response to a demand recovery in Russia in Q3 2020. 
 
  ? The share of high value-added (HVA) products within the sales portfolio 
  amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA 
  products, and the Company reduced HVA finished goods stock levels q/q. 
 
  ? Sales volumes of coking coal concentrate from Vorkutaugol declined 5% 
  q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower 
  run-of-mine (ROM-rate) at the Zapolyarnaya mine. 
 
  ? Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2 
  2020: 2.53 mln tonnes) on the back of iron ore pellet production growth 
  and inventory sell-off q/q. 
 
  ? Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2 
  2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky 
  Okatysh and Olcon. 
 
9M 2020 GROUP HIGHLIGHTS 
 
  ? Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M 
  2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln 
  tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF 
  steel following the disposal of Balakovo mini-mill in July 2019. 
 
  ? The share of HVA products remained stable y/y at 45% in 9M 2020. The 
  share of domestic shipments in 2020 was 58%, which is lower than in 2019 
  (9M 2019: 67%). This is a result of a deceleration in domestic demand in 
  2020 after achieving peak levels in the previous year and the disposal of 
  the Balakovo mini-mill, which primarily served domestic markets. 
 
  ? The average steel selling prices for 9M 2020 declined from 10% to 19% 
  across the product range, as a result of adverse pricing dynamics of 
  global benchmarks y/y. 
 
  ? Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M 
  2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the 
  Yakovlevskiy mine y/y. The Company expects to achieve total production of 
  around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020. 
 
  ? Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y. 
 
      SUMMARY OF KEY PRODUCTION, SALES VOLUMES 
 
Production,  Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % 
thousands of 
tonnes 
Crude Steel   2,890   2,807     3%      8,547   9,133    (6%) 
(Russian 
Steel) 
Hot metal     2,402   2,331     3%      7,143   7,125     0% 
(Russian 
Steel) 
 
Sales        Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % 
volumes, 
thousands of 
tonnes 
Coking coal   1,218   1,276    (5%)     3,445   3,340     3% 
concentrate 
Iron ore      2,613   2,532     3%      8,112   8,192    (1%) 
pellets 
Iron ore      1,960   1,904     3%      5,333   4,660     14% 
concentrate 
Total steel   3,006   2,551     18%     8,306   8,503    (2%) 
products 
(Consolidate 
d) 
Total steel   3,020   2,561     18%     8,340   8,538    (2%) 
products 
(Russian 
Steel) 
 
High value   Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % 
added steel 
products, % 
Severstal      49%     43%    6 ppts     45%     45%   (0 ppts) 
(Consolidate 
d) 
Severstal      49%     43%    6 ppts     45%     45%   (0 ppts) 
Russian 
Steel 
 
      SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES) 
 
Sales volumes,  Q3 2020   Q2   Change, % 9M 2020  9M   Change, 
thousands of             2020                    2019     % 
tonnes 
Coal:             344    370     (7%)     1,101  1,250  (12%) 
Coking coal       46     104     (56%)     215    331   (35%) 
concentrate 
Steam coal        298    266      12%      886    919    (4%) 
Iron ore:        1,358  1,511    (10%)    4,530  4,785   (5%) 
Iron ore         1,355  1,461    (7%)     4,343  4,170    4% 
pellets 
Iron ore           3      50     (94%)     187    615   (70%) 
concentrate 
Semi-finished     97     100     (3%)      389    279    39% 
products 
Rolled           2,383  2,084     14%     6,637  6,916   (4%) 
products: 
Hot - rolled     1,267  1,179     7%      3,643  3,310   10% 
coil 
Hot - rolled      244    219      11%      715    702     2% 
plate 
Cold - rolled     253    198      28%      661    743   (11%) 
coil 
Galvanised and    286    196      46%      701    729    (4%) 
metallic coated 
coil 
Colour coated     162    113      43%      373    365     2% 
coil 
Long products     171    179     (4%)      544   1,067  (49%) 
Downstream        526    367      43%     1,280  1,308   (2%) 
products: 
Metalware         145    135      7%       426    413     3% 
products 
Large diameter    85      25      n/a      129    303   (57%) 
pipes 
Other tubes,      296    207      43%      725    592    22% 
pipes, formed 
shapes 
 
      SEVERSTAL RESOURCES 
 
? Sales volumes of coking coal concentrate from Vorkutaugol declined 5% 
q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower 
run-of-mine (ROM-rate) at the Zapolyarnaya mine. 
 
? ROM coal production at Vorkutaugol decreased by 7% in Q3 2020 vs Q2 
2020. 
 
? Iron ore pellet sales increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 
mln tonnes) as a result of higher production levels of iron ore pellets 
and inventory sell-off q/q. 
 
? Iron ore concentrate sales volumes grew by 3% to 1.96 mln tonnes (Q2 
2020: 1.90 mln tonnes) mainly driven by higher output at Karelsky Okatysh 
and Olcon. 
 
Sales        Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % 
volumes, 
thousands 
tonnes 
Coal:         1,516   1,542    (2%)     4,331   4,260     2% 
Coking coal   1,218   1,276    (5%)     3,445   3,340     3% 
concentrate 
Steam coal     298     266      12%      886     920     (4%) 
Iron ore:     4,573   4,436     3%     13,445  12,852     5% 
Iron ore      2,613   2,532     3%      8,112   8,192    (1%) 
pellets 
Iron ore      1,960   1,904     3%      5,333   4,660     14% 
concentrate 
 
      SEVERSTAL RUSSIAN STEEL ('RSD') 
 
? RSD steel product sales of steel products increased 18% q/q to 3.02 mln 
tonnes in Q3 2020 (Q2 2020: 2.56 mln tonnes) reflecting production growth, 
a lower share of export shipments with a longer realisation period vs the 
previous quarter and finished goods stock reduction. 
 
? The Company increased its share of domestic steel shipments to 63% (Q2 
2020: 56%) in response to demand recovery in Russia in Q3 2020. 
 
? The share of high value-added (HVA) products within the sales portfolio 
amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA 
products, and the Company reduced HVA finished goods stock levels q/q. 
 
? LDP sales volumes increased to 85,000 tonnes in Q3 2020, due to reduced 
stock levels at the Izhora Pipe Mill (ITZ). In response to a contraction 
in domestic demand, the Company reallocated a portion of its sales volumes 
to export destinations in Q3 2020. 
 
? The weighted average selling price for the whole range of steel products 
in Q3 2020 increased by 2%, due to positive steel pricing dynamics at 
export destinations and a higher share of HVA products in the sales mix 
q/q. Severstal successfully maintained higher average selling prices 
throughout the period, as a result of its customer-focused approach, the 
flexibility of its distribution channels and the high proportion of HVA 
products within its portfolio. 
 
Sales volumes,  Q3 2020   Q2   Change, % 9M 2020  9M   Change, 
thousands of             2020                    2019     % 
tonnes 
Total steel      3,020  2,561     18%     8,340  8,538   (2%) 
products 
Semi-finished     98     100     (2%)      390    279    40% 
products 
Rolled           2,395  2,093     14%     6,667  6,949   (4%) 
products: 
Hot - rolled     1,268  1,178     8%      3,644  3,311   10% 
coil 
Hot - rolled      244    219      11%      715    703     2% 
plate 
Cold - rolled     253    198      28%      661    743   (11%) 
coil 
Galvanised and    286    196      46%      701    729    (4%) 
metallic coated 
coil 
Colour coated     162    113      43%      373    365     2% 
coil 
Long products     182    189     (4%)      573   1,098  (48%) 
Downstream        527    368      43%     1,283  1,310   (2%) 
products: 
Metalware         147    135      9%       429    416     3% 
products 
Large diameter    85      25      n/a      129    303   (57%) 
pipes 
Other tubes,      295    208      42%      725    591    23% 
pipes, formed 
shapes 
 
Sales price,    Q3 2020   Q2   Change, % 9M 2020  9M   Change, 
$/tonne                  2020                    2019     % 
Semi-finished     376    388     (3%)      385    427   (10%) 
products 
Hot - rolled      416    417      0%       423    506   (16%) 
coil 
Hot-rolled        517    545     (5%)      558    660   (15%) 
plate 
Cold - rolled     504    528     (5%)      536    621   (14%) 
coil 
Galvanised and    639    643     (1%)      638    724   (12%) 
metallic coated 
coil 

Colour coated     797    790      1%       789    894   (12%) 
coil 
Long products     411    417     (1%)      419    476   (12%) 
Metalware         832    837     (1%)      852    965   (12%) 
products 
Large diameter    825    778      6%       811    996   (19%) 
pipes 
Other tubes,      480    477      1%       492    578   (15%) 
pipes, formed 
shapes 
 
Sales price, Q3 2020 Q2 2020 Change, % 9M 2020 9M 2019 Change, % 
$/tonne 
Weighted       510     500      2%       510     602     (15%) 
average 
steel 
selling 
price 
 
Notes: 
 
1) Sales prices are stated on EXW basis; 
 
2) Segmental data includes intercompany sales; 
 
3) Semi-finished products include pig iron, slabs, billets, ingots, steel 
casting and forgings; 
 
4) 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 MOEX and the company's GDRs are traded on the LSE. 
Severstal reported revenue of $8,157 million and EBITDA of $2,805 million in 
       2019. Severstal's crude steel production in 2019 reached 11.8 million 
            tonnes. www.severstal.com [1] 
 
ISIN:          US8181503025 
Category Code: TST 
TIDM:          SVST 
LEI Code:      213800OKDPTV6K4ONO53 
Sequence No.:  85657 
EQS News ID:   1139893 
 
End of Announcement EQS News Service 
 
 
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October 09, 2020 02:02 ET (06:02 GMT)