January 21, 2021
PAO Severstal (MOEX: 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 FY2020.PAO Severstal (MOEX: 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 FY2020.
Q4 2020 GROUP HIGHLIGHTS
- Hot metal output remained flat q/q in Q4 2020 at 2.40 mln tonnes (Q3 2020:
2.40 mln tonnes). Crude steel production declined by 4% to 2.77 mln tonnes (Q3
2020: 2.89 mln tonnes) due to planned short-term maintenance works at
BOF#2. - Consolidated sales of steel products declined 18% q/q to 2.45 mln tonnes in
Q4 2020 (Q3 2020: 2.99 mln tonnes), reflecting the high base effect on sales
volumes of Q3 2020, along with a higher share of exports with a longer
realisation period in the sales mix, and a decline in production q/q. - The Company’s share of domestic steel shipments was 65% (Q3 2020: 63%). In
Q4 2020 Severstal increased its exports share of semi-finished and hot rolled
products. - The share of high value-added (HVA) products within the sales portfolio
increased to 53% (Q3 2020: 49%). - Sales volumes of coking coal concentrate from Vorkutaugol increased 3% q/q
to 1.26 mln tonnes as a result of 1ZH concentrate output growth q/q. - Sales volumes of iron ore pellets increased by 8% to 2.83 mln tonnes (Q3
2020: 2.61 mln tonnes) on the back of growth in iron ore pellet production at
Karelsky Okatysh q/q. - Sales volumes of iron ore concentrate declined by 11% to 1.74 mln tonnes
(Q3 2020: 1.96 mln tonnes), primarily driven by higher output at the
Yakovlevskiy mine, which was offset by lower production at Karelsky Okatysh due
to seasonal factors and increased pellet sales. - The weighted average steel selling price of Severstal’s product mix rose by
8% q/q in Q4 2020. Severstal anticipates that the positive momentum in steel
and raw material prices observed in November and December 2020 will positively
impact Q1 2021 results.
FY2020 GROUP HIGHLIGHTS
- Output of hot metal increased 1% y/y in FY2020 to 9.54 mln tonnes (FY2019:
9.49 mln tonnes). Production of crude steel and steel sales volumes both
declined 4% y/y due to lower production volumes of EAF steel following the sale
of the Balakovo mini-mill in 2019. - The share of HVA products increased y/y to 47% in 2020. The share of
domestic shipments in 2020 amounted to 60%, which is lower than 2019 levels
(FY2019: 65%). This is the result of a deceleration in the domestic demand in
2020 and the sale of the Balakovo mini-mill, which primarily served domestic
markets. - The weighted average steel selling price for 2020 declined by 12%, as a
result of adverse pricing dynamics globally y/y. - Iron ore concentrate sales volumes grew 13% y/y to 7.07 mln tonnes (FY2019:
6.26 mln tonnes) driven by output growth at Karelsky Okatysh and the
Yakovlevskiy mine y/y. - Coking coal concentrate sales volumes from Vorkutaugol increased 1%
y/y.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES
* Total steel products sales volumes (Consolidated) have been adjusted
by 17 kt for 9M 2020
** Total steel products sales volumes (Russian Steel) have been adjusted
by 17 kt for 9M 2020
SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY
SALES)
* Hot – rolled coil sales volumes are adjusted by 17 kt for 9M
2020
Q4, H2 & FY 2020 ESG (ENVIRONMENTAL, SOCIAL, GOVERNANCE)
HIGHLIGHTS
- Severstal is focused on improving working conditions for our employees and
reducing the number of health and safety incidents for the long-term. The main
challenges we faced in 2020 were COVID-19, and the management of contractor
safety. We had a higher number of contractors present on site during the year
to work on our major investment projects, and unfortunately some of these did
not adhere to Severstal’s high safety standards. - In 2020, the LTIFR* increased by 7% to 0.65 (FY2019: 0.61), which is 12%
below our 2020 target. The total number of incidents rose to 59 in 2020, from
55 in 2019. Tragically, there were ten fatal incidents in H2 2020, including
one member of our staff and nine contractors. Of those, six contractors died
following two group incidents which took place during demolition works at
decommissioned sites. We have made detailed investigations into each of these
cases and taken valuable learning from each to ensure that similar incidents do
not take place in the future.
- At Severstal Russian Steel, total emissions of air pollutants decreased by
7% in 2020 to 259,000 tonnes (FY2019: 277,500 tonnes). This reduction is
primarily linked to the introduction of combined blowing at converters and the
reduced working hours of sintering machines without the bed layer, following
the completion of maintenance works, in addition to the sale of Balakovo
mini-mill in 2019. The emissions intensity of air pollutants per tonne of steel
products declined by 2% to 22.6 kg per tonne of steel in 2020 (FY2019: 23.2 kg
per tonne). - At Severstal Resources, total emissions of air pollutants fell by 12% in
2020 to 187,600 tonnes (FY2019: 213,600 tonnes). This decrease primarily
reflects lower emissions levels at Vorkutaugol, due to the higher utilisation
rate of methane at the mines’ boiler units.
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. Methane is regarded as an air pollutant under Russian
regulations.
***Minor changes in data for 2019 took place due to a review of
methodology and scope of emissions measurement at Karelsky Okatysh and Olcon
and the emissions intensity calculation per tonne of liquid steel, instead of
crude steel
**** Steel production at Cherepovets Steel Mill and Balakovo mini-mill
(the latter for Jan – Jul 2019)
