Date of publication: 18.10.2012
18 October 2012 — EVRAZ plc (LSE: EVR) today released its operational results for the third quarter of 2012 and Interim Management Statement.
Q3 2012 OPERATIONAL HIGHLIGHTS and RECENT DEVELOPMENTS:
- Consolidated crude steel production decreased by 3% compared to Q2 2012 mainly due to lower production at EVRAZ Vitkovice Steel in the Czech Republic and EVRAZ Highveld in South Africa.
- Despite reduced crude steel output total production volumes of steel products increased by 2% mostly due to greater use of purchased third parties slabs.
- Coking coal production increased by 20% and steam coal production by 27% compared to Q2 2012 in absence of any longwall repositionings at the coal mines.
- Prices for most steel product groups reduced due to ongoing uncertainty in global steel markets and decreasing prices of iron ore and coking coal.
- In EVRAZ’s two largest product groups (semi-finished and construction products) average selling prices for semi-finished products in Russia decreased by 13% quarter-on-quarter whilst prices for construction products remained flat.
- In Q4 2012 we expect to be subject to usual seasonal trends, including slowdown in the construction activity in Russia.
- EVRAZ continues to expect its net leverage ratio to increase at the end of 2012 versus 30 June 2012 (but within the limits set by our covenants).
- On 4 October 2012 EVRAZ announced that it had agreed the terms of the acquisition of an indirect controlling interest in the Raspadskaya coking coal company through the purchase of the remaining 50% interest in Corber Enterprises Limited (“Corber”), which it did not previously hold. Corber holds 82% of the share capital of Raspadskaya. As consideration for the acquisition, EVRAZ will (i) issue 132.7 million new shares representing 9.9% of the existing issued share capital of EVRAZ; (ii) issue 33.9 million new warrants to subscribe for 33.9 million new shares representing 2.53% of the existing issued share capital of EVRAZ, and (iii) pay an amount, in cash, of US$1,949.80 for each of 103,600 ordinary Corber shares, payable in four equal instalments in Q1, Q2, Q3 2013 and Q1 2014. Completion of the deal is expected in Q4 2012.
- In October EVRAZ announced the purchase of two scrap yards in Colorado that will become part of EVRAZ Recycling, a division of EVRAZ North America.
- In October EVRAZ temporarily shut the steel production at EVRAZ Vitkovice Steel in the Czech Republic due to low demand and to optimise the raw materials inventory.
The full version of the press release is here
For further information:
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VP, Corporate Communications
London: +44 207 832 8998 Moscow: +7 495 937 6871