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Severstal operating results for the 4th quarter and twelve months of 2020

Press Releases

PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's largest vertically integrated metals and mining companies, today reports its operating results for the fourth quarter and twelve months of 2020.

HIGHLIGHTS (GROUP), Q4 2020

  • The volume of pig iron production remained at the level of the previous quarter and amounted to 2.40 million tons in 4Q. 2020 (Q3 2020: 2.40 Mt). Steel production declined 4% to 2.77 Mt (Q3 2020: 2.89 Mt) due to short-term repairs at Converter # 2.
  • Consolidated sales of steel products decreased by 18% qoq and amounted to 2.45 million tons in the 4th quarter. 2020 (Q3 2020: 2.99Mt), reflecting the high base effect of Q32020 2020, as well as an increased share of export sales with a long lead time and a decrease in production compared to the previous quarter.
  • The company increased its share of sales of steel products in the domestic market to 65% (Q3 2020: 63%). In 4 sq. 2020, the share of exports for semi-finished products and hot-rolled products increased.
  • The share of high value-added products increased to 53% (Q3 2020: 49%).
  • Sales of coking coal concentrate at “ Vorkutaugol increased by 3% qoq to 1.26 mln tonnes as a result of increased production of 1G concentrate.
  • Sales of iron ore pellets increased by 8% qoq to 2.83 mln tonnes (Q3 2020: 2.61 mln tonnes), which was due to an increase in the production of iron ore pellets at Karelsky Okatysh.
  • Sales of iron ore concentrate decreased by 11% and amounted to 1.74 mln. tonnes (Q3 2020: 1.96 mln tonnes), mainly due to increased production at the Yakovlevsky mine, which was partially offset by a decrease in production at Karelsky Okatysh due to seasonal factors and increased pellet sales.
  • The weighted average selling price of steel products increased in Q4. 2020 up 8% to the previous quarter. Severstal expects that the favorable price environment for steel products and raw materials in November and December 2020 will have a positive impact on Q1 results. 2021.

HIGHLIGHTS (GROUP), 2020

  • Pig iron production increased by 1% in 2020 by 2019 year and amounted to 9.54 million tons (2019: 9.49 million tons). Steel production and sales of steel products decreased by 4% in 2020, mainly due to a decrease in electric steel production after the sale of the Balakovo long-range mill in 2019.
  • The share of high value-added products increased by 2 p.p. in 2020. up to 47%. Domestic sales accounted for 60%, which is lower than in 2019 (2019: 65%). This is due to the weakening demand in the domestic market in 2020, as well as the sale of the Balakovo long-range mill, which was mainly focused on sales to Russian customers.
  • The weighted average sales price of steel products decreased by 12% in 2020 under the influence of unfavorable price environment compared to 2019.
  • Sales of iron ore concentrate increased by 13% YoY to 7.07 million tonnes (2019: 6.26 million tonnes) on the back of increased production at Karelsky Okatysh and Yakovlevsky mine .
  • Sales of coking coal concentrate at Vorkutaugol increased by 1% year-on-year.

PRODUCTION AND SALES HIGHLIGHTS

[/b]

* Steel Products (Total) has been adjusted by 17,000 tonnes for 9 months. 2020

** Steel Products (Russian Steel) was adjusted by 17 thousand tonnes in 9 months. 2020

[b] CONSOLIDATED SALES (EXCLUDING DOMESTIC SALES)

* Sales volumes of hot rolled sheet have been adjusted by 17,000 tonnes in 9 months ... 2020

ESG RESULTS (ECOLOGY, SOCIAL SPHERE, CORPORATE GOVERNANCE), HIGHLIGHTS OF THE FOURTH QUARTER, SECOND ANNUAL AND TWELVE MONTHS

  • The company is making great efforts to improve the working conditions of employees and reduce injuries in the long term. In 2020, the company faced challenges from COVID-19 and an increase in the number of contractors in the implementation of large investment projects, some of which, unfortunately, did not meet Severstal's high safety standards.
  • In 2020, LTIFR * increased by 7% and amounted to 0.65 (2019: 0.61), which is worse than the target for 2020 by 12%. The total number of injuries increased from 55 in 2019 to 59 in 2020. Unfortunately, in the 2nd half of 2020, 1 fatal accident with its own personnel and 9 cases with contractors was admitted. Of these, 6 employees of contractors died as a result of 2 group accidents during the dismantling of decommissioned facilities. We have investigated the circumstances of each of these
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