EVRAZ ANNOUNCES UNAUDITED INTERIM FINANCIAL RESULTS FOR H1 2013

29 August 2013 – EVRAZ plc (“EVRAZ” or “the Company”) (LSE: EVR) today announces its unaudited interim results for the six months ended 30 June 2013 (“the Period”).

H1 2013 HIGHLIGHTS

Commenting on the interim results in respect of 2013, Alexander Frolov, Chief Executive of EVRAZ, stated:

“While our sales volumes were broadly flat at 7.8 million tonnes in H1 2013, the financial results inevitably reflect the weaker steel price environment, with revenues decreasing 3% vs. H1 2012 to US$7,362 million and EBITDA declining to US$939 million.

During the reporting period we successfully delivered on three key investment projects: the commissioning of the new coking coal mine Yerunakovskaya VIII, the launch of the modernised rail mill at EVRAZ ZSMK and the introduction of PCI technology at EVRAZ NTMK. Each of these undertakings represents an important milestone in our strategy to develop our raw material base, enhance our product portfolio and preserve our low cost position in the global steelmaking industry. At the same time, in the face of challenging conditions for the global steel sector, we have revised and further adjusted our expansion plans in order to significantly increase the flexibility of future capital expenditure”.

Steel:

- Steel segment revenue of US$6,416 million (-9% vs. H1 2012)
- Crude steel production of 8.1 million tonnes (-3%)
- Full capacity utilisation in Russia for construction long products due to healthy domestic demand
- Total external sales of steel products of 7.8 million tonnes (+1%)
- Temporary growth in sales of semi-finished products to reverse once the production ramp up at EVRAZ ZSMK’s rail mill is complete by Q2 2014

Mining:
- Mining segment revenue of US$1,622 million (vs. US$1,383 million in H1 2012) including US$228 million effect from the consolidation of Raspadskaya
- Raw coking coal production of 9.1 million tonnes (vs. 4.0 million tonnes in H1 2012) including 4.0 million tonnes from Raspadskaya
- Production of saleable iron ore products stable at 10.5 million tonnes

Vanadium:
- Vanadium segment revenue of US$268 million (+2% vs. H1 2012)
- Primary vanadium production (vanadium in slag) of 10,836 tonnes (-5%)
- External vanadium product sales volumes of 8,612 tonnes (-11%) reflected the timing of receipt of the Russian export license

Investments:
- Capital expenditure of US$492 million (vs. US$565 million in H1 2012) following delivery of several major investment projects in the period (rail mill modernisation, PCI project and commissioning of Yerunakovskaya VIII mine) and as a result of the capex optimisation programme
- Capital expenditure for 2013 revised down to US$0.9-1.0 billion compared with initial budget of US$1.3 billion
- Rail mill modernisation at EVRAZ ZSMK completed in January 2013 and currently being ramped-up
- PCI project at EVRAZ NTMK fully reached design parameters in May 2013, while construction work on PCI at EVRAZ ZSMK continued
- Yerunakovskaya VIII coking coal mine launched in February 2013, while development of Mezhegey coking coal deposit continued
- Approaching the commissioning of Vostochny rolling mill in Kazakhstan

M&A developments:
- Acquisition of a controlling interest in Raspadskaya coal mining company in January 2013 for US$964 million, satisfied through the issue of equity, warrants and staged cash payments, bringing effective interest to 82%
- Acquired 51% stake in joint venture – Timir iron ore project from Alrosa in April 2013 in staged cash consideration of ca. US$160 million

Debt and liquidity:
- Net debt of US$7,043 million vs. US$6,376 million as at 31 December 2012 including additional US$453 million of net debt contributed in H1 2013 due to the consolidation of Raspadskaya
- Cash and short-term deposits of US$1,537 million
- Placed US$1,000 million Eurobonds due in 2020 with the lowest ever coupon rate achieved by EVRAZ of 6.50% p.a.
- Prepaid US$950 million structured credit facility due 2015 with certain covenants on net leverage
- In July 2013 Fitch affirmed long-term issuer default ratings of Evraz Group S.A. and EVRAZ plc at BB- with stable outlook

Dividends:
- The Board has not recommended the payment of an interim dividend in respect of H1 2013. 

For more information see the attached press release “EVRAZ ANNOUNCES UNAUDITED INTERIM FINANCIAL RESULTS FOR H1 2013”