OREANDA-NEWS.   OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading steel and steel-related mining companies, today announces its Q2 and H1 2014 financial results.
Q2 2014 vs. Q1 2014 analysis:

Group revenue increased 8.2% q/q to USD 3,253 million (Q1 2014: USD 3,007 million) driven by a strong seasonal rebound in steel product sales volumes as well as a moderate recovery in steel prices;
Group EBITDA increased 13.5% q/q to USD 606 million (Q1 2014: USD 534 million) and Group EBITDA margin grew 0.8 ppts q/q to 18.6% (Q1 2014: 17.8%). This margin represents the highest level since Q3 2011 and primarily reflects a combination of ongoing operational enhancements, a recovery in domestic steel prices and lower raw materials input costs at our steel operations;
Net loss2 of USD 661 million (Q1 2014 loss of USD 100 million) includes expected non-cash losses preliminary estimated at USD 1,066 million on the disposals5 of Severstal Dearborn LLC, Severstal Columbus LLC, PBS Coals Ltd. and a positive FX gain of USD 199 million. Excluding these non-cash items, Severstal would have posted a net profit of USD 206 million (Q1 2014: net profit of USD 221 million excluding non-cash items);
Excellent progress against strategic focus of enhancing free cash flow which increased a substantial 105.9% q/q to USD 486 million (Q1 2014: USD 236 million);
Capex of USD 211 million1, 20.1% lower q/q (Q1 2014: USD 264 million) reflecting our flexible approach to investments as well as the completion of the Balakovo Mini-Mill project;
Recommended dividend payment of 2.14 roubles per share (approximately USD 0.06) for the 6 months ended 30 June 2014.
H1 2014 vs. H1 2013 analysis:

H1 2014 revenue was 7.1% lower y/y at USD 6,260 million (H1 2013: USD 6,736 million) as Russian Steel and Resources divisions experienced lower realized prices and sales volumes;
EBITDA increased 25.4% y/y to USD 1,140 million (H1 2013: USD 909 million) driven by an ongoing focus on operational enhancements, improved performance at Severstal International and lower raw materials input costs at our steel operations;
H1 2014 net loss2 was USD 761 million (H1 2013: Breakeven) includes expected non-cash losses preliminary estimated at USD 1,066 million on the disposals5 of Severstal Dearborn LLC, Severstal Columbus LLC, PBS Coals Ltd. and a negative FX loss of USD 121 million (H1 2013: FX loss of USD 241 million). Excluding these non-cash items, Severstal would have posted a net profit of USD 426 million (H1 2013: USD 241 million);
Strong improvement in free cash flow to USD 722 million (H1 2013: USD 133 million), in line with strategic focus;
Capex3 of USD 475 million, 15.5% lower y/y (H1 2013: USD 562 million), representing 48.7% share of 2014 target capex of USD 976 million.