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Evraz publishes 2019 annual report and reports full year 2019 results

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Evraz publishes 2019 annual report and reports full year 2019 results

EVRAZ PUBLISHES 2019 ANNUAL REPORT AND REPORTS FULL YEAR 2019 RESULTS

27 February 2020 — EVRAZ plc (“EVRAZ” or “the Company”) (LSE: EVR) has today:

The 2019 Annual Report will shortly be available for inspection on the National Storage Mechanism http://www.morningstar.co.uk/uk/NSM

The 2019 Annual Report and the Notice of the Company’s Annual General Meeting, which will be held on 16 June 2020 in London, will be posted to shareholders in mid-May 2020.

The Appendix to this announcement contains additional information which has been extracted from the 2019 Annual Report for the purposes of compliance with DTR 6.3.5 only and should be read in conjunction with this announcement. Together these constitute the material required by DTR 6.3.5 and DTR 4.2.3 to be communicated to the media in unedited full text through a Regulatory Information Service. This announcement should be read in conjunction with and is not a substitute for reading the full 2019 Annual Report. Page and note references in the text below refer to page numbers and notes in the 2019 Annual Report.

EVRAZ ANNOUNCES ITS AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019

The financial information contained in this document does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. Financial information for 2018 has been extracted from the audited statutory accounts for the year ended 31 December 2018 which were prepared in accordance with IFRS as adopted by the European Union and have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified with no reference to matters to which the auditor drew attention by way of emphasis and no statement under s498(2) or s498(3) of the Companies Act 2006. The financial information for the year ended 31 December 2019 will be delivered to the Registrar of Companies following the Company’s annual general meeting convened for 16 June 2020. The auditor has reported on the statutory accounts for the year ended 31 December 2019. The auditor’s report was unqualified.

FY 2019 HIGHLIGHTS

  • Healthy free cash flow of US$1,456 million (FY2018: US$1,940 million)
  • Continued reduction in net debt: US$3.4 billion (FY2018: US$3.6 billion)
  • Total EBITDA effect from cost-cutting and customer focus initiatives of US$407 million in 2019
  • Consolidated EBITDA of US$2,601 million, down 31.1% from US$3,777 million in FY2018, EBITDA margin declined to 21.8% from 29.4% due to lower vanadium and coal product prices as well combined higher expenses
  • Net profit declined to US$365 million vs. US$2,470 million in FY2018
  • Cash-costs:
    • cash cost of slabs increased to US$236/t from US$225/t in FY2018 following change in blast furnace charge mix at EVRAZ ZSMK as well as due to the higher prices for raw materials and increased salary expenses
    • cash costs of coal concentrate decreased to US$35/t (FY2018: US$47/t) as a result of increased mining volumes

    • cash costs of iron ore products increased to US$41/t (FY2018: US$37/t) amid higher maintenance CAPEX as well as higher costs
  • An interim dividend of US$580.8 million (US$0.40 per share) has been declared, reflecting the Board’s confidence in the Group’s financial position and outlook.
Financial Highlights
(US$ million) FY2019 FY2018 Change,%
Consolidated revenue 11,905 12,836 (7.3)
Profit from operations 1,217 3,528 (65.5)
Consolidated EBITDA1 2,601 3,777 (31.1)
Net profit 365 2,470 (85.2)
Earnings per share, basic (US$) 0.23 1.67 (86.2)
Net cash flows from operating activities 2,430 2,633 (7.7)
CAPEX2 762 527 44.6
  31 December 2019 31 December 2018  
Net debt3 3,445 3,571 (3.5)
Total assets 9,847 9,373 5.1

See p.251 of EVRAZ plc Annual Report 2019 for the definition of EBITDA.

Including payments on deferred terms recognised in financing activities and non-cash transactions.

See p.251 of EVRAZ plc Annual Report 2019 for the calculation of net debt.

EVRAZ Chief Executive Officer, Alexander Frolov, commented

“In 2019, global steel and commodity markets were not as favourable as they were in 2018. Steel prices have fallen as a result of excess supply in an environment of limited end-use demand. Global coal and vanadium markets returned to supply-demand equilibrium. Despite the market headwinds, EVRAZ was able to deliver resilient results with EBITDA reaching US$2,601 million and EBITDA margin reached 22% in 2019.

Retention of our low-cost and market leadership positions remain very important for EVRAZ. During the reporting period, the efficiency improvement programme delivered an EBITDA effect of US$407 million from customer focus and cost-cutting initiatives.

In 2020, EVRAZ will continue to make significant efforts to improve safety and other vitally important areas of sustainable development. The Group has also set ambitious production targets for the year that should help it to reach solid results despite potential market headwinds.”

Alexander Frolov EVRAZ’ Chief Executive Officer