Severstal reports Q4 & FY 2014 financial results

PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading steel and steel-related mining companies, today announces its Q4 and FY 2014 financial results for the period ended 31 December 2014.

FY 2014 vs. FY 2013 ANALYSIS:

§  Consistent focus on further increasing operational efficiency and reducing costs whilst continually improving service standards and putting customers first;

§  FY 2014 revenue decreased 12.1% y/y to $8,296 million (FY 2013: $9,434 million) as a result of lower realized prices and sales volumes y/y at Russian Steel and Resources and despite substantial improvements in product mix at both divisions;

§  EBITDA increased 21.2% y/y to $2,203 million (FY 2013: $1,818 million) driven by a strong result at Russian Steel on the back of operational enhancements, lower input costs and RUB devaluation, more than offsetting lower deliveries at Resources;

§  EBITDA margin increased by 7.3 ppts to 26.6%, which is amongst the highest in the global industry;

§  FY 2014 net loss was $1,602 million (FY 2013: net profit of $83m) has been impacted by FX losses on continuing operations of $1,807 million, impairments for continuing and discontinued operations of $1,222 million and a gain on disposal of $101 million of the discontinued operation. Excluding these non-cash items, Severstal would have posted a net profit of $1,326 million (FY 2013: net profit of $749 million);

§  Continued strong improvement in free cash flow at $1,232 million for the FY 2014 (FY 2013: $381 million), is in line with the Company’s strategic focus;

§  Capex of $779 million for the FY 2014 was 28.1% lower y/y (FY 2013: $1,084 million) and 10.3% below FY 2014 capex target of $868 million. Severstal’s FY 2015 capex target is RUB 30 billion, subject to FX fluctuations.

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