26.10.2015, 22:56
Severstal Reports Q3 & 9M 2015 Financial Results
OREANDA-NEWS. PAO Severstal announces its Q3 and 9M 2015 financial results for the period ended 30 September 2015.
Q3 2015 vs. Q2 2015 Analysis
Group EBITDA margin remains amongst the highest in the industry at 31.5% in Q3 2015 (Q2 2015: 32.6%). Group EBITDA decreased 10.9% q/q to USD 524 million (Q2 2015: USD 588 million);
In spite of further RUB devaluation driving down USD-denominated average selling prices for both steel and steel-related raw materials, q/q Group revenue decreased only 7.9% q/q to USD 1,663 million (Q2 2015: USD 1,806 million) strongly supported by a seasonal rebound in sales volumes in domestic markets in both the steel and mining divisions;
The net loss of USD 130 million (Q2 2015: net profit of USD 469 million) reflects a FX loss of USD 515 million. Adjusting for this non-cash item, Severstal would have posted an underlying net profit of USD 385 million (Q2 2015: USD 339 million excluding FX profit);
Free cash flow for Q3 2015 increased 42.0% q/q to USD 609 million (Q2 2015: USD 429 million) reflecting further progress against the strategic objective and was mainly a function of a seasonal uptick in demand in the local market, although not as pronounced as previous years, and a higher share of domestic sales. These led to a substantial working capital release compared with the previous quarter;
Cash outflow on capex of USD 103 million, 7.2% lower q/q (Q2 2015: USD 111 million), reflecting our prudent approach to investments;
Recommended dividend payment of 13.17 RUB per share for the three months ended 30 September 2015.
9M 2015 vs. 9M 2014 Analysis
Group EBITDA increased 5.3% y/y to USD 1,695 million (9M 2014: USD 1,610 million), driven by Russian Steel's operational enhancements, lower input costs and RUB devaluation together more than offsetting lower deliveries at Resources;
Group revenue decreased 22.1% y/y to USD 5,000 million (9M 2014: USD 6,418 million) as the impact of lower realized prices. This was only partially mitigated by moderate increases in sales volumes at Russian Steel and Resources;
Strong improvement in free cash flow to USD 1,247 million (9M 2014: USD 807 million), in line with strategic focus;
Cash outflow on capex of USD 317 million, 49.0% lower y/y (9M 2014: USD 622 million).
Q3 2015 vs. Q2 2015 Analysis
Group EBITDA margin remains amongst the highest in the industry at 31.5% in Q3 2015 (Q2 2015: 32.6%). Group EBITDA decreased 10.9% q/q to USD 524 million (Q2 2015: USD 588 million);
In spite of further RUB devaluation driving down USD-denominated average selling prices for both steel and steel-related raw materials, q/q Group revenue decreased only 7.9% q/q to USD 1,663 million (Q2 2015: USD 1,806 million) strongly supported by a seasonal rebound in sales volumes in domestic markets in both the steel and mining divisions;
The net loss of USD 130 million (Q2 2015: net profit of USD 469 million) reflects a FX loss of USD 515 million. Adjusting for this non-cash item, Severstal would have posted an underlying net profit of USD 385 million (Q2 2015: USD 339 million excluding FX profit);
Free cash flow for Q3 2015 increased 42.0% q/q to USD 609 million (Q2 2015: USD 429 million) reflecting further progress against the strategic objective and was mainly a function of a seasonal uptick in demand in the local market, although not as pronounced as previous years, and a higher share of domestic sales. These led to a substantial working capital release compared with the previous quarter;
Cash outflow on capex of USD 103 million, 7.2% lower q/q (Q2 2015: USD 111 million), reflecting our prudent approach to investments;
Recommended dividend payment of 13.17 RUB per share for the three months ended 30 September 2015.
9M 2015 vs. 9M 2014 Analysis
Group EBITDA increased 5.3% y/y to USD 1,695 million (9M 2014: USD 1,610 million), driven by Russian Steel's operational enhancements, lower input costs and RUB devaluation together more than offsetting lower deliveries at Resources;
Group revenue decreased 22.1% y/y to USD 5,000 million (9M 2014: USD 6,418 million) as the impact of lower realized prices. This was only partially mitigated by moderate increases in sales volumes at Russian Steel and Resources;
Strong improvement in free cash flow to USD 1,247 million (9M 2014: USD 807 million), in line with strategic focus;
Cash outflow on capex of USD 317 million, 49.0% lower y/y (9M 2014: USD 622 million).
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