Evraz Group’s major operating subsidiaries report 2Q 2007 RAS Financial Results
August 15, 2007 - Evraz Group S.A. (LSE: EVR) announces that its major Russian operating subsidiaries have filed financial results with the Federal Financial Markets Service of the Russian Federation (FFMS) for the three months ended June 30, 2007. The results are prepared in accordance with Russian accounting standards (RAS).
The filing of RAS accounting results for Evraz’s major Russian operating subsidiaries is a Russian regulatory requirement. RAS accounting results differ materially from IFRS and are not comparable to financial statements prepared in accordance with IFRS. The RAS accounting results of Evraz's major Russian subsidiaries are not indicative of the financial condition or results of operations of these entities or of Evraz Group S.A. under IFRS. Reference should be made only to Evraz Group S.A.’s consolidated financial statements prepared in accordance with IFRS for information with respect to Evraz’s financial condition and results of operations. RAS accounting results are not approved by external auditors and the Internal Audit Committee of Evraz Group S.A.
Evraz Group S.A. publishes consolidated financial statements prepared in accordance with IFRS for the six months ended June 30 and for the year ended December 31, in each year.
· Increased prices boosted NTMK and Zapsib profit
The 2Q 2007 revenue of NTMK and Zapsib went up 39% and 24% respectively vs. 2Q 2006 as demand continued to push up prices for the mills’ key steel products in both Russian and export markets (construction and railway steel products, as well as slabs). The net profit grew by 71% and 68% vs. 2Q 2006 and by 65% and 82% vs. 1Q 2007 respectively. At NTMK, a bigger profit was also a result of continuous shift in the sales structure in favour of higher value-added products.
· KGOK and VGOK benefited from higher prices for iron ore
The 2Q 2007 revenue of KGOK and VGOK increased by 36% and 43% respectively as compared to the same period last year as the average prices for iron ore increased by 34-36% year-on-year on marginally higher sales volumes, while prices were flat vs. the previous quarter of 2007. Expansion in the net profit at KGOK (+95% year-on-year) in 2Q 2007 is also explained by a write-off of bad debts in the amount of 435 million roubles in 2Q 2006 that depressed the reported net profit of KGOK in 2Q 2006. Cost of sales at both mining units of Evraz remained relatively stable in 2Q 2007.
 The major subsidiary companies include: OAO Nizhny Tagil Iron and Steel Plant (NTMK); OAO West Siberian Iron and Steel Plant (Zapsib); OAO Kachkanarsky Mining and Processing Integrated Works (KGOK); OAO Vysokogorsky Mining and Processing Integrated Works (VGOK)
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