Severstal reports Q2 and H1 2015 financial results

PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading steel and steel-related mining companies, today announces its Q2 and H1 2015 financial results for the period ended 30 June 2015.

Q2 2015 vs. Q1 2015 ANALYSIS:

  • Group revenue increased 18.0% q/q to $1,806 million (Q1 2015: $1,531 million) mostly due to RUB appreciation leading to higher average USD-denominated selling prices and a moderate seasonal rebound in sales volumes on domestic and export markets both in steel and mining divisions;
  • Group EBITDA increased 0.9% q/q to $588 million (Q1 2015: $583 million). The impact of RUB appreciation on the Company’s cost base was fully mitigated by higher average USD-denominated selling prices and ongoing efficiency improvements. Group EBITDA margin was reduced to 32.6% in Q2 2015, but remains amongst the highest in the industry;
  • Net profitof $469 million (Q1 2015: $337 million) was positively impacted by a FX translation profit of continuing operations of $130 million. Adjusting for this non-cash item, Severstal would have posted an underlying net profit of $339 million (Q1 2015: $368 million excluding FX translation losses);
  • Excellent progress has been made in our strategic priority of enhancing free cash flow, which increased a substantial 105.3% q/q to $429 million (Q1 2015: $209 million). This improvement was partially driven by much better dynamics in working capital compared with Q1 2015 on the back of improved seasonal demand as well as the delayed receipt of cash from sales during the previous quarter;
  • Cash outflow on capex of $111 million, 7.8% higher q/q (Q1 2015: $103 million), reflecting our prudent approach to investments;
  • Recommended dividend payment of 12.63 RUB per share for the three months ended 30 June 2015.

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