Severstal' : Severstal reports Q1 2019 operatioal results

April 12, 2019

PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q1 2019.

Q1 2019 GROUP HIGHLIGHTS

• Hot metal output increased 6% q/q in Q1 2019 to 2.36 mln tonnes (Q4 2018: 2.23 mln tonnes) following short-term maintenance works at BF#2 in the previous quarter. Crude steel production grew to 3.04 mln tonnes (Q4 2018: 2.94 mln tonnes) reflecting an increase in pig iron production and production growth of EAF billets.
• Consolidated steel product sales increased 3% q/q to 2.83 mln tonnes in Q1 2019 (Q4 2018: 2.76 mln tonnes), following short-term maintenance works at rolling-mill facilities in the previous quarter and an increase in productivity of aggregates. The share of domestic sales rose to 65% due to their increased attractiveness of domestic sales (Q4 2018: 62%).
• The share of high value-added (HVA) products within the sales portfolio remained flat at 44% (Q4 2018: 44%), driven by a decline in sales of semi-finished products, which was offset by higher sales of galvanised, colour coated and hot rolled thick plate.
• Coking coal concentrate sales volumes from Vorkutaugol declined 1% due to long-wall repositionings at Vorgashorskaya, Zapolyarnaya and Komsomolskaya mines, but remained at historically high levels reflecting the high production rate.
• Iron ore pellet sales declined 4% to 2.83 mln tonnes (Q4 2018: 2.94 mln tonnes) as a result of lower production volumes in Q1 2019 and a stock sell-off in the previous quarter.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

Production, thousands of tonnes	Q1 2019	Q4 2018	Change, %	Q1 2019	Q1 2018	Change, %
Crude Steel (Russian Steel)	3,044	2,941	4%	3,044	3,033	0%
Hot metal (Russian Steel)	2,363	2,233	6%	2,363	2,347	1%
Sales volumes, thousands of tonnes	Q1 2019	Q4 2018	Change, %	Q1 2019	Q1 2018	Change, %
Coking coal concentrate	1,031	1,043	(1%)	1,031	628	64%
Iron ore pellets	2,832	2,943	(4%)	2,832	2,377	19%
Iron ore concentrate	1,301	1,430	(9%)	1,301	1,292	1%
Total steel products (Consolidated)	2,832	2,755	3%	2,832	2,864	(1%)
Total steel products (Russian Steel)	2,843	2,766	3%	2,843	2,874	(1%)

High value added steel products, %	Q1 2019	Q4 2018	Change, %	Q1 2019	Q1 2018	Change, %
Severstal (Consolidated)	44%	44%	(0 ppts)	44%	45%	(1 ppts)
Severstal Russian Steel	44%	44%	(0 ppts)	44%	45%	(1 ppts)

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, thousands of tonnes		Q1 2019	Q4 2018	Change, %	Q1 2019	Q1 2018	Change, %
Coal:	532		544	(2%)	532	404	32%
Coking coal concentrate	157		169	(7%)	157	46	n/a
Steam coal	375		375	0%	375	358	5%
Iron ore:	1,656		2,128	(22%)	1,656	1,441	15%
Iron ore pellets	1,302		1,871	(30%)	1,302	1,188	10%
Iron ore concentrate	354		257	38%	354	253	40%
Semi-finished products	121		157	(23%)	121	256	(53%)
Rolled products:	2,311		2,185	6%	2,311	2,166	7%
Hot-rolled coil	1,102		1,017	8%	1,102	963	14%
Hot-rolled plate	233		210	11%	233	198	18%
Cold-rolled coil	275		296	(7%)	275	389	(29%)
Galvanised and metallic coated coil	237		207	14%	237	198	20%
Colour coated coil	102		97	5%	102	67	52%
Long products	362		358	1%	362	351	3%
Downstream products:	400		413	(3%)	400	442	(10%)
Metalware products	126		136	(7%)	126	128	(2%)
Large diameter pipes	97		107	(9%)	97	119	(18%)
Other tubes, pipes, formed shapes	177		170	4%	177	195	(9%)

Notes: All production data is reported in thousands of tonnes;

Sales prices are stated on EXW basis;

Segmental data includes intercompany sales;

Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;

Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.

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