Commenting on the financial results in respect of H1 2014, Alexander Frolov, Chief Executive of EVRAZ, stated:
"EBITDA totalled US$1,080 million in H1 2014 compared to US$925 million for the corresponding period of 2013. This 17% increase largely reflects actions taken by the Company in terms of asset optimisation and the implementation of cost efficiencies. A strong free cash flow performance of US$444 million for the first half of the year allowed us to decrease net debt to US$6,095 million as at 30 June 2014. Our net leverage consequently declined from 3.6x at the year end to 3.1x, thereby strengthening the Company's financial position."
Steel:
Steel segment revenue of US$5,898 million (-8% vs. H1 2013)
Crude steel production of 7.8 million tonnes (-4%)
Total external sales of steel products of 7.7 million tonnes (-1%)
Coal:
Coal segment revenue of US$665 million (-7% vs. H1 2013)
Raw coking coal production of 9.8 million tonnes (+7%) including 4.4 million tonnes from Raspadskaya
Sergey Stepanov was appointed General Director of Raspadskaya Coal Company with effect from 1 July 2014.
Iron ore:
Iron ore segment revenue of US$659 million (-27% vs. H1 2013)
Production of iron ore products was 11.3 million tonnes (-4%) on the back of lower output by the Russian operations largely driven by the disposal of high cost operation EVRAZ VGOK and three mines of Evrazruda
Vanadium:
Vanadium segment revenue of US$255 million (-5% vs. H1 2013)
The vanadium division produced 10,404 tonnes (-4%) of vanadium slag and sold 9,393 tonnes (+5%) of final vanadium products
Investments:
Capital expenditure of US$365 million (vs. US$492 million in H1 2013) following completion of some major projects and the thorough revision of investment plans
PCI project at EVRAZ ZSMK continued in H1 2014 and hot tests started in July
Yerunakovskaya VIII coking coal mine launched in February 2013 and fully ramped up by February 2014
Development of Mezhegey coking coal deposit continued
EVRAZ Caspian Steel rolling mill in Kazakhstan commenced production
M&A developments:
Disposal of EVRAZ Vitkovice Steel based on the enterprise value of US$287 million completed in April 2014
Sale of 34% of issued share capital of EVRAZ Highveld Steel and Vanadium for approximately US$27 million in August 2014
Debt and liquidity:
Net debt of US$6,095 million vs. US$6,534 million as at 31 December 2013
Net leverage at 3.1 times last twelve months EBITDA compared to 3.6 times as at 31 December 2013
US$425 million 5-year pre-export finance facility signed in August 2014
Dividends:
The US$90.4 million dividend (6 cents per share) pay out in July 2014 represented the approximate cash portion of the proceeds from the sale of EVRAZ Vitkovice Steel, leaving US$196.6 million for the reduction of debt
