EVRAZ Announces Preliminary Audited Financial Results for 2012

11 April 2013 – EVRAZ plc (“EVRAZ” or “the Company”) (LSE: EVR) today announces its preliminary audited results for the year ended 31 December 2012 (“the Period”).

The financial information contained in this document for the year ended 31 December 2012 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The audited statutory accounts for the year ended 31 December 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Company's annual general meeting convened for 13 June 2013.

The auditor has reported on the statutory accounts for year ended 31 December 2012. The auditor's report was unqualified.

2012 HIGHLIGHTS
Alexander Frolov, CEO commented on the financial results of EVRAZ: “The year 2012 was characterised by challenging trading conditions for the global steelmaking industry. Although some recovery was seen during the first half of the year, there was a significant deterioration in sentiment towards the year end. As a result, steel and raw material markets remained highly volatile with global steel industry capacity experiencing substantial underutilisation.

“The subdued steel and raw materials pricing environment impacted EVRAZ’s financial performance. Although the Company demonstrated respectable operating results, we experienced a 10% decline in revenues to US$14,726 million against 2011, while EBITDA was 31% lower at US$2,012 million.” 

1 Hereinafter debt and cash balances include the amounts held at operations that were classified as assets/liabilities held for sale, which were separately presented in the statement of financial position as of 31 December 2012, and include US$70 million of cash and cash equivalents and US$79 million of debt.

Steel:
- Crude steel production 15.9 million tonnes (-5% vs. 2011)
- Total external sales of steel products 15.3 million tonnes (-1%)
- Steel segment revenue US$13,543 million (-8%)

Mining:
- Production of saleable iron ore products 20.8 million tonnes (-2%)
- Raw coking coal production 8.5 million tonnes (+35%)
- Raw steam coal production 2.3 million tonnes (-23%)

Vanadium:
- Primary vanadium production (vanadium in slag) 21,060 tonnes (+2%)
- External vanadium product sales volumes 21,100 tonnes (-21%)
- Vanadium segment revenue US$520 million (-22%)

Investments:
- Capital expenditure of US$1,261 million (vs. US$1,281 million in 2011)
- Rail mill modernisation at EVRAZ ZSMK completed
- PCI project at EVRAZ NTMK completed while construction works on PCI at EVRAZ ZSMK continued
- Capacity and product mix expansion in the North American tubular and rail sectors
- Yerunakovskaya VIII coking coal mine launched in February 2013

M&A developments:
- Acquisition of a controlling interest in Raspadskaya coal mining company in January 2013 for US$964 million, satisfied through equity and cash consideration, bringing effective interest to 82%
- Sale of EvrazTrans for US$306 million cash consideration while securing long-term railway transportation needs of Russian operations
- Executed non-binding term sheet for potential sale of EVRAZ Highveld in March 2013
- Acquired 51% stake in Timir iron ore project from Alrosa in April 2013 for ca. US$160 million

Debt and liquidity:
- Net debt US$ 6,184 million vs. US$6,442 million as at 31 December 2011
- Cash and deposits US$2,064 million
- Placed US$600 million 5-year Eurobonds and US$250 million ECP
- Secured project financing of US$195 million for Mezhegey coking coal project
- Deleted maintenance covenant in the 2015 Eurobond issue. No public debt remains with maintenance covenants
- Agreed amendments to financial covenants in banking debt

Corporate developments:
- Adoption of a new Code of Business Conduct and the Group’s anticorruption policies and initiatives to ensure compliance with the UK Bribery Act
- Alexander Izosimov appointed as Independent Non-Executive Director
- Enhanced composition of the Audit and Remuneration Committees towards the goal of best corporate governance practice
- Inclusion in MSCI UK and MSCI World Indices in May 2012

Dividends:
- Interim dividend of 11 cents per share
- The Board has recommended not to pay a final dividend for 2012 due to the deterioration in the market environment, and consequently our performance, in H2 2012

For more information see the attached press release “EVRAZ Announces Preliminary Audited Financial Results for 2012”