19.1.2011
18 January 2011 - Evraz Group S.A. (LSE: EVR) today released its operational results for the fourth quarter of 2010 and full year 2010.
HIGHLIGHTS:
STEEL
The output of finished products increased by 15-35% depending on product category in 2010 compared with 2009, reflecting demand recovery across the key markets.
As the Russian steel mills were fully utilised in 2010, the growing demand for finished products was met by reducing saleable semi-finished steel volumes by 28.4%.
Russia
Production of semi-finished products in 2010 compared to 2009 declined 8.3% in favour of higher margin products as a result of a continuing recovery in the Russian market. In particular, construction products production went up by 11.0% and railway products output by 27.0%, year-on-year.
In 4Q10 the semi-finished products output went up 4.9% against the previous quarter after completion of repairs of major production units, including blast furnace No 1, at Zapsib.
Ukraine
Meeting demand growth, DMZ produced 22.4% and 22.1% more steel and rolled products respectively and 73% less saleable pig iron in 4Q10 compared to 3Q10. The output of construction products increased by 22.8% and export billets by 33.5%, quarter-on-quarter.
Europe
In mid-November 2010, following the signing of an agreement with a hot metal supplier, Evraz relaunched steel production at its Czech subsidiary, Evraz Vitkovice Steel, which had been idle since July 2010. The facility has produced 93,000 tonnes of steel in the month and a half since its re-launch.
Flat-rolled product production declined by 7.3% in 4Q10 compared to 3Q10 because of an overhaul of the plate mill at Evraz Vitkovice Steel.
North America
Growth in finished goods production volumes was driven by demand recovery in the US and Canada, and the overall strengthening of the North American market. Production of rails grew by 24.1% compared to 3Q10. The rise in rail production was achieved in order to support increased sales efforts at a time when infrastructure spending in rail is increasing. Production of tubular goods was driven by sustainable market demand, in particular for casing and tubing used in shale gas exploration projects. In 4Q10 production of flat-rolled products decreased by 5.6% compared to 3Q10 due to optimisation of inventory.
South Africa
The domestic market remains depressed with total rolled products production volumes staying flat in 4Q10 compared to the previous quarter. Lower output of construction (-6.9%) and flat-rolled products (-20.7%) in 4Q10 was compensated by a 277.9% increase in export billets volumes.
MINING
Coking Coal
Coking coal production at Yuzhkuzbassugol grew by 36.7% against 3Q10 as 4Q10 was largely devoid of the significant negative exceptional factors of the previous two quarters.
Steam Coal
Raw steam coal production was lower in 4Q10 compared to 3Q10 because of the equipment remounting at the Gramoteinskaya mine which has been taking place since September, and a temporary shutdown of the Tagaryshskaya mine for a safety inspection.
VANADIUM
Consolidated production of vanadium slag increased by 8.1% in 2010 vs. 2009 and remained marginally flat in 4Q10 compared to the previous quarter. Vanadium slag output rose in South Africa as old slag crushing capacities were recommissioned at Evraz Highveld Steel and Vanadium in 4Q10. The decrease in production in Russia, by 6.2% year-on-year and by 16.8% in 4Q10 against 3Q10, was due to decreased steel production at the NTMK steel mill resulting from the converter shop modernisation.
Production of ferrovanadium rose 68.2% in 2010 compared to 2009 following acquisition of Vanady-Tula, a vanadium refinery located in Russia, in November 2009. The production of ferrovanadium at the Group's own facilities exhibited growth of 149.2%, year-on-year, and 9.7% in 4Q10 as aqainst 3Q10.
Please note that the total volume of rolled steel products in the table below excludes those rerolled at other Group's mills. These volumes are eliminated as intercompany sales for purposes of Evraz's consolidated operating results.
For further information:
Media contact:
Alex Agoureev
VP, Public Relations
+7 985 122 4822
media@evraz.com
Investor contact:
Alexander Boreyko
Director, Investor Relations
+7 495 232 1370
ir@evraz.com
Evraz Group S.A. is a vertically-integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, Europe, USA, Canada and South Africa. The Company was ranked the 14th largest steel producer in the world based on crude steel production of 15.3 million tonnes in 2009. Evraz's internal consumption of iron ore and coking coal is covered by its mining operations. Evraz's consolidated revenues for the nine months ended 30 September 2010 were US$9,729 million and consolidated adjusted EBITDA amounted to US$1,766 million.
