# EVRAZ achieves EBITDA of US$2.1 billion, up 94% year-on-year

- Link: https://www.directorstalkinterviews.com/evraz-achieves-ebitda-of-us2.1-billion-up-94-year-on-year/4121014690
- Published: 2021-08-05T07:38:25+01:00
- Author: Amilia Stone

**EVRAZ plc** (LON:EVR) has announced its unaudited interim financial results for
the six months ended 30 June 2021.

**H1 2021 HIGHLIGHTS**

•     The Group reported solid free cash flow^(1) of US$836 million, compared with
US$315 million in H1 2020.

•     Consolidated EBITDA^(1) totalled US$2,082 million, up 94.0% YoY from US$1,073
million in H1 2020. The EBITDA margin^(1) rose to 33.7% from 21.5% in H1 2020. Supporting
factors included higher steel, vanadium and coal product sales prices. Cost-cutting
and customer focus initiatives also generated an effect of US$256 million in EBITDA.

•     Total debt^(1) dropped by US$307 million to US$4,676 million, while net debt
^(1) fell by US$95 million to US$3,261 million.

•     Net profit totalled US$1,212 million, compared with US$513 million in H1 2020.

•     The cash cost of steel and raw materials in Russia was the following:

o  The cash cost of slabs^(1) increased to US$283/t from US$210/t in H1 2020

o  The cash cost of washed coking coal^(1) increased to US$36/t from US$34/t in 
H1 2020

o  The cash cost of iron ore products^(1) increased to US$40/t from US$38/t in H1
2020

•     An interim dividend for 2021 of US$802.3 million (US$0.55 per share) has been
declared, reflecting the Board’s confidence in the Group’s financial position and
outlook.

**FINANCIAL HIGHLIGHTS**

| (US$ million) | H1 2021 | H1 2020 | Change, % | 
| Consolidated revenues | 6,178 | 4,983 | 24.0 | 
| Profit from operations | 1,749 | 891 | 96.3 | 
| Consolidated EBITDA^(1) | 2,082 | 1,073 | 94.0 | 
| Net profit | 1,212 | 513 | n/a | 
| Earnings per share, basic (US$) | 0.82 | 0.35 | n/a | 
| Net cash flows from operating activities | 1,410 | 781 | 80.5 | 
| Free cash flow^(1) | 836 | 315 | n/a | 
| CAPEX^(1) | 430 | 337 | 27.6 | 
|   | 30 June 2021 | 31 December 2020 | Change, % | 
| Net debt^(1) | 3,261 | 3,356 | (2.8) | 
| Total assets | 9,125 | 8,710 | 4.8 |

_^(1 )__For the definition, see “Definitions of selected alternative performance
measures”._

> **Commenting on the results, EVRAZ’ Chief Executive Officer, Alexander Frolov,
> said:**
> “The recovery on the global steel market observed since the second half of 2020
> accelerated in the first half of 2021. Activity in steel-consuming industries 
> continued returning to pre-pandemic levels, driving steel prices and demand.
> Amid this rebound, EVRAZ achieved EBITDA of US$2.1 billion, up 94% year-on-year
> and a half-year record for the last decade. Contributing to this were higher steel,
> vanadium and coal product sales prices, as well as our cost-cutting and productivity
> improvement initiatives and customer focus efforts, which generated a total effect
> of US$256 million in EBITDA.
> In the reporting period, we continued to implement our main development initiatives.
> The upgrade of the rail and beam mill at EVRAZ NTMK and construction of new long
> rail mill at EVRAZ Pueblo projects continued according to schedule and made good
> progress. Overall CAPEX stood at US$430 million, including US$258 million for 
> development projects.
> In addition, we improved our debt position, reducing net debt by US$95 million
> to US$3,261 million. This brought our ratio of net debt to last twelve months (
> LTM) EBITDA to 1.0x.Given the positive results in favourable market conditions,
> the Board of Directors is recommending an interim dividend for 2021 of US$0.55
> per share, totalling around US$802.3 million, which is in line with the dividend
> policy.
> EVRAZ’ core values are health and safety of its people. Regretfully, I have to
> report that there were six fatalities on our premises in the first half of 2021.
> These are tragedies that should not happen. We are making every possible effort
> to achieve our strategic goal of zero fatalities. The root causes of these fatalities
> have been thoroughly investigated and corrective measures introduced to mitigate
> further risks.
> As for the demerger of our coal business – we’ve made further progress here and
> confirming our intention to complete transaction by the end of the year, subject
> to receiving all necessary approvals. The details will be announced later in due
> course.
> In the second half of 2021, we expect global markets to remain fairly healthy,
> despite a possible correction in steel prices.”

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