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10.08.2017

EVRAZ announces unaudited interim financial results for H1 2017

EVRAZ plc (“EVRAZ” or “the Group”; LSE: EVR) today announces its unaudited interim results for the six months ended 30 June 2017 (“the Period”).

H1 2017 HIGHLIGHTS

  • Strong free cash flow of US$549 million (H1 2016: US$102 million).
  • Continued reduction in net debt: US$4.3 billion (FY2016: US$4.8 billion).
  • Cost saving of US$63 million due to ongoing productivity improvements and cost-cutting initiatives.
  • Consolidated EBITDA of $1,152 million, up 99.7% from $577 million in H1 2016, driving the EBITDA margin from 16.3% to 22.6% due to higher coal and steel products prices, accompanied by the effects of cost-cutting initiatives.
  • Net profit of US$86 million vs. US$7 million in H1 2016.
  • Cash-cost of steel and raw materials in Russia increased mostly as a result of rouble appreciation: cash cost of slabs increased to US$254/t from US$183/t in FY2016; cash cost of washed coking coal increased to US$42/t from US$30/t in FY2016; cash cost of iron ore products (58% Fe content) increased to US$32/t from US$26 in FY2016. 
  • An interim dividend of US$429.6 million (US$0.30 per share) has been declared, reflecting the Board’s confidence in the Group’s financial position and outlook.
Commenting on the results, EVRAZ’ Chief Executive Officer, Alexander Frolov, said: “EVRAZ performed well during the first half of 2017, reflecting the anticipated positive momentum in the market and our continuous focus on efficiency improvements. Coal and steel prices remained strong during the reporting period and account for much of the improvements in the results. However, there were other contributors, our disciplined cost-cutting program and our customer focus initiatives which together generated additional US$111 million of EBITDA. Consolidated EBITDA almost doubled year-on-year to US$1.15 billion in the first half of 2017. We will continue to focus on improvements well beyond this year. As always, our top priority is safety. We remain committed to achieving our goal of zero incidents and are working with every employee to deliver this. Debt reduction remains of paramount importance and we are now in a much stronger position than a year ago. At the end of the reporting period, net debt stood at US$4.28 billion and the net debt to EBITDA ratio at 2.0x. We generated solid free cash flow of US$549 million in the first half of 2017, and we would like our shareholders to see the benefits of our hard work. On 9 August 2017, the EVRAZ’ Board of Directors recommended an interim dividend of US$0.30 per share, equalling an overall payout to shareholders of around US$429.6 million. Looking ahead, we expect the results for the year to also reflect the positive trends on the global steel market, while we will remain focused on our strategic priorities: development of product portfolio and customer base, retention of low-cost position, prudent CAPEX strategy and debt reduction.” 

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