PJSC Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading and most vertically integrated steel and mining companies, today announces its financial results for the second quarter and first half of 2020
CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED ON JUNE 30, 2020 AND THE FIRST HALF OF 2020
- EBITDA is the sum of operating profit and depreciation expense of production assets (including the Group's share depreciation of associates and joint ventures), adjusted by the amount of profit /(loss) from the sale of property, plant and equipment and intangible assets, as well as the share in non-operating income /(expense) of associates and joint ventures ... The formula for converting EBITDA to profit from operating activities is provided in Severstal's quarterly financial statements.
- Free cash flow is calculated as the sum of the following components: net cash flows from operating activities, cash flows on capital investments, proceeds from disposal of property, plant and equipment and intangible assets, interest and dividends received. The formula for converting free cash flow into net cash flows from operating activities is given in the quarterly financial statements of Severstal.
- Basic profit per share from continuing operations calculated as follows: net income from continuing operations divided by by weighted average number of shares during the period (825 million shares for Q2 2020 and Q1 2020, 6M 2020 and 824 million shares in 6 months (2019).
RESULTS OF THE SECOND QUARTER OF 2020 COMPARED WITH THE RESULTS OF THE FIRST QUARTER 2020 YEARS:
- The Group's revenue decreased by 10.5% qoq to $ 1,590 million (Q1 2020: $ 1,777 million) due to a decrease sales prices for steel products and a decrease in sales volumes.
- Group EBITDA decreased by 9.7% to $ 501m (Q1 2020: $ 555million) due to lower revenues, partially leveled by lower ce cost-free sales. The Group's vertically integrated model allowed to maintain EBITDA margin of 31.5%, which remains one of the highest in the industry.
- Free cash flow increased to $ 190 million . (Q1 2020: $ 54 million), which mainly reflects positive changes in working capital.
- Net income was $ 391 million (Q1 2020: $ 72 million). ), which includes foreign exchange gains of $ 168 million, mainly consisting of foreign exchange gains from debt balances denominated in US dollars as a result of the strengthening of the ruble.
- Cash flows for capital investments amounted to $ 331 million (Q1 2020: $ 344 million).
- Net debt increased to $ 2.006 million at the end of Q2. 2020 (Q1 2020: $ 1.528 mln.).
- Severstal seeks to increase the Company's shareholder value, including by ensuring a low level of debt. Severstal's financial position remains stable with a net debt /EBITDA ratio of 0.8x at the end of Q2 2020. As a result, the dividends recommended by the Board of Directors for the three months ended June 30, 2020 amount to RUB 15.44 per share.
RESULTS OF THE FIRST HALF OF 2020 IN COMPARISON WITH RESULTS FOR THE FIRST HALF OF 2019:
- The Group's revenue decreased in the first half of 2020 by 20.0% compared to the previous year to $ 3,367 million. (6 month 2019: $ 4.208 million). Decrease in revenue of is due to a decrease in sales prices and a decrease in sales of steel products compared to the same period of the previous year.
- EBITDA for the Group decreased by 25.4% compared to the same period of the previous year and amounted to $ 1,056 million (6M 2019: $ 1,416 million), which mainly reflects a decrease in revenues, partially offset by a decrease in cost of sales. EBITDA margin remained high at 31.4% (6M 2019: 33.7%).
- The company generated $ 244 million in free cash flow (6M 2019: $ 652 mln.), Which mainly reflects the decline in EBITDA and growth in capital expenditures versus the same period last year.
FINANCIAL POSITION OF THE COMPANY, KEY POINTS:
- Cash and cash equivalents at the end of the second quarter of 2020 decreased to $ 584 million (Q1 2020: $ 1.042 million).
- The Group's total debt remained virtually unchanged at $ 2,590 million (Q1 2020: $ 2,570 million).
- Net debt increased to $ 2.006 million at the end 2 sq. 2020 (Q1