Severstal reports Q3 and 9M 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 Q3 and 9M 2015 financial results for the period ended 30 September 2015.

Q3 2015 vs. Q2 2015 ANALYSIS:

  • Group EBITDA margin remains amongst the highest in the industry at 31.5% in Q3 2015 (Q2 2015: 32.6%). Group EBITDA decreased 10.9% q/q to $524 million (Q2 2015: $588 million);
  • In spite of further RUB devaluation driving down USD-denominated average selling prices for both steel and steel-related raw materials, q/q Group revenue decreased only 7.9% q/q to $1,663 million (Q2 2015: $1,806 million) strongly supported by a seasonal rebound in sales volumes in domestic markets in both the steel and mining divisions;
  • The net loss of $130 million (Q2 2015: net profit of $469 million) reflects a FX loss of $515 million. Adjusting for this non-cash item, Severstal would have posted an underlying net profit of $385 million (Q2 2015: $339 million excluding FX profit);
  • Free cash flow for Q3 2015 increased 42.0% q/q to $609 million (Q2 2015: $429 million) reflecting further progress against the strategic objective and was mainly a function of a seasonal uptick in demand in the local market, although not as pronounced as previous years, and a higher share of domestic sales. These led to a substantial working capital release compared with the previous quarter;
  • Cash outflow on capex of $103 million, 7.2% lower q/q (Q2 2015: $111 million), reflecting our prudent approach to investments;
  • Recommended dividend payment of 13.17 RUB per share for the three months ended 30 September 2015.

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