January 17, 2020
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 Q4 and FY2019.
Q4 2019 GROUP HIGHLIGHTS
- Hot metal output declined 4% q/q in Q4 2019 to 2.36 mln tonnes (Q3 2019:
2.46 mln tonnes) due to short-term maintenance works at blast furnace
facilities in Q4 2019. Crude steel production declined 10% to 2.71 mln tonnes
(Q3 2019: 3.03 mln tonnes) affected by short-term maintenance works at the BOF
and EAF facilities and lower EAF production in Q4 2019 following the sale of
the Balakovo mini-mill in the previous quarter. - Consolidated steel product sales declined 6% q/q to 2.65 mln tonnes in Q4
2019 (Q3 2019: 2.83 mln tonnes). The Company increased the share of steel
export shipments to 41% (Q3 2019: 33%) responding to a seasonal slowdown in
domestic demand. - The share of high value-added (HVA) products within the sales portfolio
remained at 45% (Q3 2019: 45%), supported by higher sales of hot rolled thick
plate and cold rolled coil products and declining volumes of long and hot
rolled coil sales. - Coking coal concentrate sales volumes from Vorkutaugol declined 1% q/q due
to a decrease in run-of-mine production q/q. - Iron ore pellet sales grew 14% to 2.81 mln tonnes (Q3 2019: 2.46 mln
tonnes) reflecting higher production of pellets at Karelsky Okatysh. Iron ore
concentrate sales volumes declined 17% to 1.60 mln tonnes (Q3 2019: 1.93 mln
tonnes) driven by a decline in iron ore volumes at Karelsky Okatysh.
FY2019 GROUP HIGHLIGHTS
- Hot metal output increased 4% y/y to 9.49 mln tonnes in 2019 (FY2018: 9.15
mln tonnes) driven by improved efficiency arising from maintenance works and
higher quality raw materials. Crude steel production in 2019 declined 2% to
11.85 mln tonnes (FY2018: 12.04 mln tonnes), as higher aggregate productivity
levels were offset by lower EAF production in H2 2019 following the sale of the
Balakovo mini-mill. - Coking coal concentrate sales volumes from Vorkutaugol surged 38% y/y, as a
result of planned production growth. - Iron ore concentrate sales volumes increased 14% y/y to 6.26 mln tonnes
(FY2018: 5.51 mln tonnes) predominantly reflecting production volumes growth at
Karelsky Okatysh and the Yakovlevskiy mine. • The share of HVA products
remained high at 45% in FY2019 (FY2018: 46%), reflecting higher sales of thick
plate, as well as galvanised and colour-coated products following the launch of
new product lines, which reached full utilisation in the beginning of
2019. - In 2019 the share of domestic shipments reached 65% (FY2018: 61%) due to
more attractive pricing in the Russian market.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES
|
Production, thousands of tonnes |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018 |
Change, % |
|
Crude Steel (Russian Steel) |
2,714 |
3,032 |
(10%) |
11,847 |
12,039 |
(2%) |
|
Hot metal (Russian Steel) |
2,361 |
2,458 |
(4%) |
9,486 |
9,146 |
4% |
|
Sales volumes, thousands of tonnes |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018 |
Change, % |
|
Coking coal concentrate |
1,331 |
1,351 |
(1%) |
4,671 |
3,374 |
38% |
|
Iron ore pellets |
2,810 |
2,461 |
14% |
11,002 |
10,997 |
0% |
|
Iron ore concentrate |
1,595 |
1,931 |
(17%) |
6,255 |
5,510 |
14% |
|
Total steel products (Consolidated) |
2,651 |
2,834 |
(6%) |
11,154 |
11,176 |
0% |
|
Total steel products (Russian Steel) |
2,663 |
2,847 |
(6%) |
11,201 |
11,220 |
0% |
|
High value added steel products, % |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018 |
Change, % |
|
Severstal (Consolidated) |
45% |
45% |
0 ppts |
45% |
46% |
(1 ppts) |
|
Severstal Russian Steel |
45% |
45% |
0 ppts |
45% |
46% |
(1 ppts) |
SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY
SALES
|
Sales volumes, thousands of tonnes |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018 |
Change, % |
|
Coal: |
435 |
330 |
32% |
1,685 |
1,671 |
1% |
|
Coking coal concentrate |
77 |
66 |
17% |
408 |
359 |
14% |
|
Steam coal |
358 |
264 |
36% |
1,277 |
1,312 |
(3%) |
|
Iron ore: |
2,175 |
1,443 |
51% |
6,960 |
7,405 |
(6%) |
|
Iron ore pellets |
1,825 |
1,380 |
32% |
5,995 |
6,578 |
(9%) |
|
Iron ore concentrate |
350 |
63 |
n/a |
965 |
827 |
17% |
|
Semi-finished products |
208 |
89 |
134% |
487 |
695 |
(30%) |
|
Rolled products: |
2,016 |
2,292 |
(12%) |
8,932 |
8,719 |
2% |
|
Hot – rolled coil |
1,072 |
1,168 |
(8%) |
4,382 |
3,895 |
13% |
|
Hot – rolled plate |
255 |
244 |
5% |
957 |
852 |
12% |
|
Cold – rolled coil |
234 |
226 |
4% |
977 |
1,286 |
(24%) |
|
Galvanised and metallic coated coil |
205 |
238 |
(14%) |
934 |
835 |
12% |
|
Colour coated coil |
83 |
122 |
(32%) |
448 |
391 |
15% |
|
Long products |
167 |
294 |
(43%) |
1,234 |
1,460 |
(15%) |
|
Downstream products: |
427 |
453 |
(6%) |
1,735 |
1,762 |
(2%) |
|
Metalware products |
150 |
147 |
2% |
563 |
560 |
1% |
|
Large diameter pipes |
80 |
100 |
(20%) |
383 |
440 |
(13%) |
|
Other tubes, pipes, formed shapes |
197 |
206 |
(4%) |
789 |
762 |
4% |
Q4, H2 & FY 2019 ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE)
HIGHLIGHTS
- The health and safety of all our employees and contractors is an absolute
priority for Severstal as we remain committed to reaching zero fatalities
across all our operations. - The LTIFR for FY 2019 stood at 0.61, decreasing by 36% y/y (FY2018: 0.95),
surpassing our set target of 0.84 for 2019 by 27%. The total number of
incidents in 2019 decreased to 55 from 81 in 2018. - Tragically, there were three fatal incidents in H2 2019 including two
members of our staff and one contractor. We are investigating each of these
cases in detail and taking preventative measures to ensure that similar
incidents do not take place in the future. - The overall level of employee engagement in safety issues has increased in
2019; this is confirmed by the results of our Accident Prevention System (APS)
audits, which demonstrate that both Russian Steel and Severstal Metiz exceeded
their set targets, achieving engagement levels of 3.9 and 2.8 out of 5
respectively. Vorkutaugol also met its target engagement level of 3.0.
|
Health and Safety |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018 |
Change, % |
|
LTIFR* |
0.60 |
0.45 |
33% |
0.61 |
0.95 |
(36%) |
- At Severstal Russian Steel, the total emissions of air pollutants decreased
by 8% in 2019 to 277,492 tonnes (2018: 301,695 tonnes). The level of emissions
of air pollutants per tonne of steel products was reduced by 7% to 23.4 kg per
tonne of steel in 2019 (2018: 25.1 kg per tonne), due to decreased consumption
intensity of coke fines while sintering following reconstruction of solid fuel
preparation unit at Sinter plant 3. The overall reduction in total emissions is
also related to the sale of Mini-Mill Balakovo in 2019 and its inclusion into
the calculations scope for H1 2019 only (leading to 8,300 tonnes reduction in
pollutants). - At Severstal Resources, the total emissions of air pollutants fell by 3% in
2019 to 213,291 tonnes (2018: 220,016 tonnes). This decrease primarily reflects
reduced emissions levels at Vorkutaugol due to higher volumes of methane
utilised at the mines’ boiler units.
|
Environment** |
Q4 2019 |
Q3 2019 |
Change, % |
2019 |
2018*** |
Change, % |
|
Atmospheric emission of pollutants, thousand tonnes (Russian Steel) |
61.8 |
73.2 |
(16%) |
277.5 |
301.7 |
(8%) |
|
Atmospheric emission of pollutants, thousand tonnes (Severstal |
54.4 |
58.7 |
(7%) |
213.3 |
220.0 |
(3%) |
|
Specific atmospheric emission of pollutants, kg per tonne of steel**** |
23.8 |
24.2 |
(2%) |
23.4 |
25.1 |
(7%) |
Notes to this section:
* LTIFR refers to Lost Time Injury Frequency Rate of Severstal
staff, the number of lost time injuries occurring in a workplace per 1 million
hours worked.
** Emissions data is calculated in accordance with Russian regulations
and is reported to the relevant Russian authorities on an annual basis and
reviewed by them.
***Minor changes in data for H1 2018 took place due to a review of
methodology and scope of emissions measurement at Karelsky Okatysh and
Olcon.
**** Steel production at Cherepovets Steel Mill and Severstal Long
Product Mill Balakovo (the latter for Jan – Jul 2019)
