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Mar.28.2024 1USD=7.0948RMB
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Severstal Reports Q2 2021 Operational Results

https://en.steelhome.com [SteelHome] 2021-08-19 15:24:45

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Q2 2021 vs. Q1 2021 ANALYSIS

· Production: Hot metal output decreased by 2% qoq to 2.63 mln tonnes due to scheduled BF repairs. Crude steel production decreased to 2.78 mln t (-6% qoq), as a result of lower hot metal output and seasonal servicing works in BOF shop.

· Steel sales were up by 2% qoq to 2.68 mln tonnes, mainly due to strong sales of semi-finished and HVA products. The start of the construction season in Russia supported the demand for CRC, colour coated steel and metalware. Sales of hot-rolled steel and plate decreased by 7% qoq to 1.1 mln tonnes due to significant scheduled repair works. As a result, the share of the domestic market increased to 55% (+7 ppts qoq).

· Total share of high value-added (HVA) products amounted to 49% (+3 ppts qoq).

· Raw materials sales: Sales of coal decreased by 18% qoq to 0.28 mln t, driven mainly by a decline in steam coal sales as demand softened during the summer season. Severstal continued to focus on implementing its environmental strategy during the period, and in June 2021 Vorkutaugol announced the termination of steam coal production, starting from the first quarter of 2022 (press-release). Sales of iron ore products increased by 28% to 1.3 mln tonnes, driven by strong demand for pellets in Europe (sales grew by 34% qoq), as crude steel production continued to recover in the EU27.

6M 2021 vs. 6M 2020 ANALYSIS

· Production: Hot metal production increased by 12% yoy to 5.3 mln tonnes, due to BF-3 commissioning in December 2020. Steel output grew to 5.7 mln tonnes (+1% yoy), driven by the EAF-1 start up in April 2021.

· Steel sales were up by 4% yoy to 5.3 mln tonnes. Sales of semi-finished products grew by 181% yoy to 0.58 mln tonnes following higher output of crude steel, coupled with repairs to the hot-rolled shop. Sales of hot-rolled steel and plates decreased by 17% yoy due to a large-scale upgrade of one of the continuous slab heating furnaces. The total share of domestic sales volume went down by 7 ppts yoy to 51% due to favourable export market conditions in Q1 2021.

· High value-added (HVA) sales were up by 12% yoy to 2.5 mln tonnes, mainly due to strong sales of cold-rolled (+32% yoy to 0.54 mln t) and galvanized steel (+31% yoy to 0.53 mln t). The HVA share in consolidated sales amounted to 48% (+4 ppts yoy).

· Raw materials sales: Sales of coal decreased by 17% yoy to 0.63 mln tonnes driven mainly by a decline in coal concentrate sales on the back of lower output impacted by the long wall repositioning. Sales of iron ore products decreased by 26% to 2.3 mln tonnes, driven by the redirection of iron ore flow to owned assets following the start-up of BF-3 in the end of 2020. Sales of iron ore pellets to third parties reduced by 23% yoy to 2.3 mln tonnes. Iron ore concentrate sales to third parties decrease substantially in Q2 2021, amounting to just 47 kt in 6m 2021 (-74% yoy).

SEGMENTS PERFORMANCE

Severstal Russian Steel (RSD)

$ million, unless otherwise stated

Q2 2021

Q1 2021

qoq

6m 2021

6m 2020

yoy

Steel sales, kt

2,691

2,642

2%

5,333

5,147

4%

  Semis

317

259

22%

576

205

181%

  Commercial

1,066

1,161

-8%

2,227

2,692

-17%

  HVA

1,308

1,222

7%

2,530

2,250

12%

Revenue

2,759

2,154

28%

4,913

3,286

49.50%

EBITDA

1,021

689

48%

1,710

721

137.20%

EBITDA margin, %

37%

32%

5%

34.80%

21.90%

12.90%

Source from Severstal

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