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Severstal Reports Q4 & FY2019 Financial Results-- The 21st China (Guangzhou) Int’l Plate metal, Bar, wire, Metal Processing &Setting Equipment Exhibition
3/2/2020 金属板材展-棒材-线材展 -plate metal expo-wire expo |
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Severstal has announces its Q4 & FY2019 financial results for the period ended 31 December 2019. Severstal CEO Mr Alexander Shevelev said “The fourth quarter of 2019 was challenging for steel producers globally, with both steel demand and prices in decelerating and recovery only starting in December 2019. In this environment, Severstal’s vertically integrated business model, combined with the flexibility of our multiple distribution channels, successfully supported our EBITDA margin, which was 33% in Q4 2019. We are proud of our operational results for 2019 with 38% growth in coking coal and 14% growth in iron ore concentrate sales volumes. I am pleased that our efforts to transform the company which we started in 2018 in line with our 5-year strategy continue brining fruits. In 2019, we earned additionally USD 224 million at the EBITDA level and are remaining one of the lowest costs steelmakers globally. Positive momentum continues with our investments in new technologies. Our division Severstal Ventures made three new investments recently which should enable us to offer our customers new materials with unique properties in the future.
Q4 2019
Group revenue declined by 12.9% q/q to $1,838 million (Q3 2019: $2,111 million) due to lower steel sales volumes and adverse pricing dynamics for steel and raw materials.
Group EBITDA declined by 23.5% q/q to $602 million (Q3 2019: $787 million), reflecting topline decline partially offset by a reduction in cost of sales. The Group’s vertically integrated business model delivered an EBITDA margin of 32.8%, maintaining its position as one of the highest in the industry globally.
FY2019
Group revenue declined by 4.9% y/y to $8,157 million (FY2018: $8,580 million). This drop in revenue y/y was a result of weaker pricing for steel products.
Group EBITDA was 10.7% lower y/y at $2,805 million (FY2018: $3,142 million), primarily reflecting lower revenues offset by a reduction in cost of sales. The Group’s EBITDA margin remained high at 34.4% (FY2018: 36.6%).
OUTLOOK - The Phase 1 agreement between China and the USA and progress with the Brexit deal in Europe have reduced global economy risks and boosted market optimism which should support steel demand in the long term. After the sharp drop in Q4 2019 global steel prices seem to be turning the corner in Q1 2020 thanks to restocking and production cuts. In Russia, the construction sector will again remain a key steel demand driver in 2020, supported by the expected implementation of the National projects. Good pricing in the Russian market is attributable to the appreciation of the rouble and limited steel supply due to current reconstruction works at some mills. Despite a number of potential headwinds on both the export and domestic markets, Severstal’s low cost position allows us to remain competitive in the market. The Board remains confident in the resilience of the Company’s business model relative to its local and global peers.
金属板材展-线材展-金属加工展-2020第二十一届广州国际金属板材、棒材、线材及金属加工设备展—全球三大金属展之一巨浪展览
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