PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and mining companies, today announces operating and financial results for the first quarter of 2021.
CONSOLIDATED FINANCIAL AND OPERATING RESULTS FOR THE QUARTER ENDED MARCH 31, 2021
- Q1 data. 2020 adjusted to reflect changes described in Severstal's quarterly financial statements.
- EBITDA is the sum of operating profit and depreciation expenses of production assets (taking into account the Group's share in depreciation of associates and joint ventures), adjusted for the profit /(loss) from the sale of property, plant and equipment and intangible assets, as well as the share in non-operating income /(expenses) of associates and joint ventures. The formula for converting EBITDA to operating profit 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 from capital investments, proceeds from disposal of fixed assets and intangible assets, interest and dividends received. The formula for converting free cash flow to net operating cash flows is provided in Severstal's quarterly financial statements.
- Basic earnings per share from continuing operations are calculated as follows: net income from continuing operations divided by weighted average number of shares during the period (826 mln shares in Q1 2021 and Q4 2020, 825 mln shares in Q1 2020).
- Net debt /EBITDA ratio represents the ratio of net debt to EBITDA for the last 12 months and is included in Severstal's quarterly financial statements. Net debt is the company's total debt less cash and cash equivalents at the end of the reporting period.
- LTIFR (Lost Time Ijury Frequecy Rate) - Lost Time Ijury Frequecy Rate temporary disability per million hours worked. The calculation of the ratio takes into account the number of injuries and hours worked of own personnel and contractors with a cumulative total since the beginning of the calendar year.
RESULTS OF THE FIRST QUARTER OF 2021 COMPARED WITH THE RESULTS OF THE FOURTH QUARTER OF 2020:
- Steel production increased by 7% to 2.96 million tonnes (Q4 2020: 2.77 million tonnes), due to an increase in 1Q2020. 2021 the number of heats and their weight.
- The volume of pig iron production in 1 sq. 2021 increased 12% qoq to 2.67mt (Q4 2020: 2.40mt) thanks to the launch of blast furnace # 3.
- Steel product sales increased 8% qoq to 2. 63 mt (Q4 2020: 2.44 mt) due to increased production and completion of short-term repairs in the previous quarter.
- The company increased its export market share to 52% (Q4 2020: 35 %) due to favorable dynamics of export prices and increased demand.
- The share of products with high added value was 46% (Q4 2020: 53%) due to the increased production of hot rolled steel, long products and semi-finished products.
- Group revenue increased 28.8% qoq to $ 2,219mn (Q4 2020: $ 1.723mn) driven by increased steel sales and favorable price dynamics.
- Group EBITDA increased 63.7% to $ 1,162m (Q4 2020: $ 710m) on the back of higher revenues. The Group's vertically integrated business model allowed for an EBITDA margin of 52.4%, which remains one of the world's highest in the steel industry.
- Free cash flow grew 134.4% qoq to $ 497 million in 1 sq. 2021 (Q4 2020: $ 212 million), which mainly reflects EBITDA growth and positive changes in working capital compared to the previous quarter.
- Net income was $ 721 million (Q4 2020: $ 386 million), which includes a foreign exchange loss of $ 47 million.
- Cash flows on capital investments were $ 278 million (Q4 2020: $ 311 million).
- Net debt declined to $ 1.589 million at the end 1 sq. 2021 (Q4 2020: $ 2.029 mn).
- Severstal seeks to increase its shareholder value, including by keeping its debt levels low. Severstal's financial position remains robust with a net debt /EBITDA ratio of 0.52 at the end of Q1 2021. As a result, the dividends recommended by the Board of Directors for Q1 2021 amount to RUB 46.77 per share.
RESULTS FOR Q1 2021 COMPARED TO Q1 2020