EVRAZ plc ('EVRAZ' or 'the Group' or 'the Company'; LSE: EVR) announces its unaudited interim financial results for the six months ended 30 June 2022 ('the Period').
H1 2022 HIGHLIGHTS
Consolidated EBITDA1 totalled US$2,486 million, up 19.4% YoY from US$2,082 million in H1 2021. The EBITDA margin1 declined to 30.7% from 33.7% in H1 2021. The increase in EBITDA was primarily attributable to higher coal product sales prices as well as better performance of North American assets.
Cost-cutting and customer focus initiatives generated an effect of US$237 million in EBITDA.
Total debt1 dropped by US$136 million to US$3,958 million, while net debt1 amounted to US$3,165 million.
Net profit totalled US$6 million, compared with US$1,212 million in H1 2021.
The cash cost of steel and raw materials in Russia was the following: o The cash cost of slabs1 increased to US$358/t from US$283/t in H1 2021
The cash cost of washed coking coal1 increased to US$62/t from US$36/t in H1 2021
The cash cost of iron ore products1 increased to US$56/t from US$40/t in H1 2021
The Group reported negative free cash flow1 of US$59 million, compared with positive US$836 million in H1 2021 following a surge in working capital due to an increase in inventory and receivables amid hindered exports.
Commenting on the results, EVRAZ's Chief Executive Officer, Aleksey Ivanov, said:
'Recent geopolitical tensions have given rise to significant corporate governance and operating challenges for EVRAZ. On top of that, strong rouble, declining demand for our products, and increased competition on EVRAZ's traditional markets present additional headwinds.
In H1 2022, steel demand went down amid growing worries over the health of the global economy and persistent supply chain challenges. There was bearish sentiment in China due to extended COVID-19 lockdowns, low margins and rising steel inventory. This led to a pullback in steel prices from recent highs across all key markets and especially in China, Europe and India.
Despite the above, EVRAZ posted strong EBITDA of US$2.5 billion, up 19.4% year-on-year. This was achieved thanks to higher coal sales prices and better performance of our North American operations, as well as our cost-cutting and productivity improvement initiatives and customer focus efforts, which generated a total effect of US$237 million in EBITDA.
Given the current macroeconomic backdrop and hindered access to foreign equipment, the schedules of investment projects that are related to the development of EVRAZ and are not currently in the active phase had to be adjusted. Overall CAPEX stood at US$513 million, including US$253 million for development projects.
In addition, we slightly improved our debt position, reducing total debt by US$136 million to US$3,958 million while net debt amounted to US$3,165 million. The ratio of net debt to last twelve months (LTM) EBITDA amounted to 0.6x in the reporting period.
Notwithstanding the current hardships, we remain committed to the sustainable development of our business. We value and protect the health and safety of our personnel. Unfortunately, in H1 2022, we lost four employees, and there were four fatalities among our contractors. Fatal incidents are unacceptable, and EVRAZ is going to do its utmost to prevent them from happening again. We have thoroughly investigated the underlying causes of these tragedies and introduced measures to mitigate causes and minimise risks.
In H1 2022, we also maintained close communication with our employees, communities where we operate, and other relevant stakeholders. In its ESG efforts, EVRAZ is consistently transparent, providing regular and comprehensive non-financial disclosures in line with GRI, SASB and TCFD standards.
Geopolitical tensions, mounting economic pressure and sanctions are continuing to shape EVRAZ's operating environment in H2 2022, but we are adapting our business to the new reality and working to deliver on our commitments to customers, suppliers and employees.'
Contact:
T: +7 495 363 19 63
E: info@evraz.com
EVRAZ PLC 
