EVRAZ plc (LON:EVR) today announced its unaudited interim results for the six months ended 30 June 2018.
H1 2018 HIGHLIGHTS
• Strong free cash flow of US$661 million (H1 2017: US$549 million).
• Consolidated EBITDA of US$1,906 million, up 65.5% from US$1,152 million in
H1 2017, driving the EBITDA margin from 22.6% to 30.0% due to higher vanadium, coal and steel products prices, accompanied by the effects of cost-cutting initiatives.
• Continued debt reduction: total debt reduced by c.US$646m to c.US$4,786m, net debt reduced to US$3.9 billion (FY2017: US$4.0 billion).
• Cost saving of US$117 million due to ongoing productivity improvements and cost-cutting initiatives.
• Net profit of US$1,145 million vs. US$86 million in H1 2017.
• Cash-cost of steel and raw materials in Russia slightly increased:
o cash cost of slabs increased to US$248/t from US$247/t in FY2017;
o cash cost of washed coking coal increased to US$47/t from US$42/t in FY2017;
O cash cost of iron ore products increased to US$37/t from US$34/t in FY2017.
• Solid dividends of c.US$617 million were paid out to shareholders during
H1 2018
• A second interim dividend for 2018 of US$577.34 million (US$0.40 per share) has been declared, reflecting the Board’s confidence in the Group’s financial position and outlook.
FINANCIAL HIGHLIGHTS
|
(US$ million) |
H1 2018 |
H1 2017 |
Change, % |
|
Consolidated revenue |
6,343 |
5,106 |
24.2% |
|
Profit from operations |
1,731 |
831 |
n/a |
|
Consolidated EBITDA1 |
1,906 |
1,152 |
65.5% |
|
Net profit |
1,145 |
86 |
n/a |
|
Earnings per share, basic (US$) |
0.77 |
0.04 |
n/a |
|
Net cash flows from operating activities |
932 |
746 |
24.9% |
|
CAPEX1 |
232 |
289 |
(19.7)% |
|
|
30 June 2018 |
31 December 2017 |
|
|
Net debt1 |
3,884 |
3,966 |
(2.1)% |
|
Total assets |
9,558 |
10,380 |
(7.9)% |
1 For the definition see section Definitions of selected alternative performance measures.
Commenting on the results, EVRAZ’ Chief Executive Officer, Alexander Frolov, said:
“In the first half of 2018, the Group delivered a solid financial performance, supported by the ongoing improvement in the global steel market environment.
Consolidated EBITDA totalled US$1.9 billion, up 65.5% year-on-year driven by our continuous operational efficiency improvements and a stronger price environment.
On the balance sheet side, net debt has reduced to US$3.9 billion at the end of June. This brought the net-debt-to-EBITDA ratio to 1.1x, well below our target.
Given the solid results, the Board of Directors are recommending a second interim dividend for 2018 of 40 cents per share totaling c.US$577 million, in line with the previously announced payout policy.
We are proud of our strong ongoing performance and will remain focused on delivering further improvements. In the second half of the year, despite possible price correction, we expect market conditions to remain positive overall.”
