FIRST QUARTER OF 2011 TRADING UPDATE

17 May 2011 - EVRAZ Group S.A. (LSE: EVR) ("EVRAZ") today issued its first quarter of 2011 trading update.

The information in this press release has been prepared in accordance with management accounting policies. Inter-company transactions have been eliminated in consolidation. This announcement does not contain sufficient information to constitute an interim financial report as defined in International Auditing Standards 34, "Interim Financial Reporting". The following results may differ from financial statements prepared in accordance with International Financial Reporting Standards ("IFRS"). The numbers in this press release have not been audited or reviewed.

EVRAZ Group S.A. publishes consolidated financial statements prepared in accordance with IFRS for the six months ended June 30 and for the year ended December 31, in each year.

Highlights:

• Revenue for the three-month period ended 31March 2011 was US$3,894million
• Adjusted EBITDA^[1] was US$740million^[2] with adjusted EBITDA margin of 19%
• Interest expense was US$191million
• Total debt as of 31 March 2011 amounted to US$7,809million, including US$713million of short-term loans and current portion of long-term debt
• Cash and cash equivalents at the end of the period stood at US$629million
• Capital expenditures amounted to US$200million
• Total steel products sales in the three-month period ended 31March 2011 amounted to 3.9million tonnes
• Iron ore sales volumes including intersegment shipments totalled 5.2 million tonnes
• Coal sales including intersegment shipments were 2.1million tonnes, including 0.6million tonnes of raw coking coal, 0.3million tonnes of steam coal, 1.2million tonnes of coking coal concentrate and 0.1million tonnes of steam concentrate

 ^[1] Profit from operations before depreciation, depletion and amortisation, impairment of assets, loss (gain) on disposal of property, plant & equipment and foreign exchange loss (gain).
^[2] This number includes US$16 million penalties related to Ukrainian operations in 2008. Excluding this item EBITDA would have been US$756 million

Selected sales data:

*Inter-company volumes have been eliminated
**Including US$83 million and US$66 million of revenue from rendering of services (transportation, maintenance, etc. services provided to third parties) in 1Q 2011 and 1Q 2010, respectively

Recent developments

EVRAZ has continued to strengthen its liquidity profile, taking advantage of favourable capital market conditions. In April 2011, EVRAZ issued US$850 million bonds due 2018 at an interest rate of 6.75%, the lowest ever coupon for EVRAZ Eurobond issues. Part of the proceeds from the issue was used to purchase approx. US$622 million of the outstanding Eurobonds due 2013.

Outlook

In Q2 2011 EVRAZ's steelmaking operations continue to run at full capacity.

Prices in the Russian domestic and international markets, which were growing in the beginning of the year, showed some correction in the second quarter, but the average price is expected to be slightly higher than that of the first quarter.

We expect the 2Q 2011 EBITDA to be in the range of US$750-825 million. 

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For further information: 

Media contact:
Oleg Kuzmin
VP, Corporate Communications
+7 495 937 6871
media@evraz.com

Investor contact:
Alexander Boreyko
Director, Investor Relations
+7 495 232 1370
ir@evraz.com

EVRAZ GROUP S.A. (EVRAZ) is a vertically-integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, USA, Canada, Czech Republic, Italy and South Africa. In 2010, the Company produced 16.3 million tonnes of crude steel and sold 15.5 million tonnes of steel rolled products. EVRAZ's internal consumption of iron ore and coking coal is covered by its mining operations. EVRAZ's consolidated revenues for the year ended 31 December 2010 were US$13,394 million and consolidated adjusted EBITDA amounted to US$2,350 million.