Severstal Reports Q4 and FY 2014 Operational Results
01/26/2015 - PAO Severstal announced its operational results for the fourth quarter and full year 2014.
Q4 2014 GROUP HIGHLIGHTS
· In terms of steel production volumes, Q4 2014 was broadly in line with Q3 2014 despite seasonality: crude steel production increased 1% q/q to 2.89 million metric tons, while hot metal production was up 2% q/q to 2.32 million metric tons. That said, growing efficiency of our converters comes from a wider use of higher Fe content pellets, which allows us to partially replace expensive scrap.
· Consolidated sales of steel products slightly decreased 1% q/q due to marginal change to the product mix and short-term maintenance at one of the rolling mills.
· Share of high value-added products in the sales portfolio remained around historical record levels of 52% (Q3 14: 53%) reflecting our strategic focus on downstream development and despite the increase in the output of semi-finished products post the completion of repairs at one of the converters at the end of Q3 2014.
· Steel assets continued to run at near to full capacity in Q4, with the Balakovo mini-mill ramping-up further.
· Coking coal concentrate sales volumes at Vorkutaugol increased 25% q/q to almost 1.47 million metric tons.
· Iron ore pellets sales remained broadly flat q/q at 2.75 million metric tons (Q3 2014: 2.74 million metric tons).
· Whilst average selling prices for all products declined in USD terms, they are up q/q in RUB. Moreover, despite seasonally low market, domestic RUB-nominated prices continue to catch up with the export USD-nominated parity since the beginning of 2015 as well.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
· In terms of steel production volumes, Q4 2014 was broadly in line with Q3 2014 despite seasonality: crude steel production increased 1% q/q to 2.89 million metric tons, while hot metal production was up 2% q/q to 2.32 million metric tons. That said, growing efficiency of our converters comes from a wider use of higher Fe content pellets, which allows us to partially replace expensive scrap.
· Consolidated sales of steel products slightly decreased 1% q/q due to marginal change to the product mix and short-term maintenance at one of the rolling mills.
· Share of high value-added products in the sales portfolio remained around historical record levels of 52% (Q3 14: 53%) reflecting our strategic focus on downstream development and despite the increase in the output of semi-finished products post the completion of repairs at one of the converters at the end of Q3 2014.
· Steel assets continued to run at near to full capacity in Q4, with the Balakovo mini-mill ramping-up further.
· Coking coal concentrate sales volumes at Vorkutaugol increased 25% q/q to almost 1.47 million metric tons.
· Iron ore pellets sales remained broadly flat q/q at 2.75 million metric tons (Q3 2014: 2.74 million metric tons).
· Whilst average selling prices for all products declined in USD terms, they are up q/q in RUB. Moreover, despite seasonally low market, domestic RUB-nominated prices continue to catch up with the export USD-nominated parity since the beginning of 2015 as well.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
| Production, metric tons | Q4 2014 | Q3 2014 | Change, % | 2014 | 2013 | Change, % |
| Crude steel (Russian Steel) | 2,891,739 | 2,862,204 | 1% | 11,301,979 | 10,711,945 | 6% |
| Hot metal (Russian Steel) | 2,320,277 | 2,282,592 | 2% | 9,075,597 | 8,759,404 | 4% |
| Sales volumes, metric tons | Q4 2014 | Q3 2014 | Change % | 2014 | 2013 | Change% |
| Coking coal concentrate | 1,470,621 | 1,288,727 | 14% | 5,371,269 | 7,160,947 | (25%) |
| Iron ore pellets | 2,754,450 | 2,741,006 | 0% | 10,617,584 | 10,455,510 | 2% |
| Iron ore concentrate | 980,782 | 1,138,772 | (14%) | 4,429,995 | 4,617,835 | (4%) |
| Total steel products (Consolidated) | 2,643,552 | 2,662,173 | (1%) | 10,409,608 | 10,486,406 | (1%) |
| Total steel products (Russian Steel) | 2,654,466 | 2,745,261 | (3%) | 10,592,758 | 10,642,399 | (0%) |
| Average price, $/metric ton | Q4 2014 | Q3 2014 | Change % | 2014 | 2013 | Change % |
| Coking coal concentrate, Vorkutaugol | 76 | 94 | (19%) | 89 | 108 | (18%) |
| Iron ore pellets, Karelsky Okatysh | 55 | 73 | (25%) | 80 | 106 | (25%) |
| Iron ore concentrate, Olkon | 36 | 49 | (27%) | 55 | 74 | (26%) |
| Hot-rolled coil (RSD) | 450 | 517 | (13%) | 486 | 518 | (6) % |
| High value added steel products, % | Q4 2014 | Q3 2014 | Change, % | 2014 | 2013 | Change, % |
| Severstal (Consolidated) | 52% | 53% | (1 ppts) | 50% | 47% | 3 ppts |
| Severstal Russian Steel | 52% | 52% | (0 ppts) | 49% | 47% | 2 ppts |
