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2026 (pre-feasibility in 4Q20, feasibility and investment decision in 2021, construction start in 2022).
Russian Investigative Committee files criminal claim against CEO Maksim Meshcheryakov​. According to a Petropavlovsk press release, the Russian Investigative Committee has initiated an investigation into the events of 26-27 August 2020, when Petropavlovsk's interim CEO Maksim Meshcheryakov was denied access to the company's office in Moscow, which he then entered in the presence of Moscow police, whom he called to attend.
● Steel
Evraz​ announce a small decline in sales q/q amid a large fall in production ​means the company had a material inventory release in 3Q20. Production underperformed due to the halt of operations at the Raspadskaya open-pit (on low domestic coking coal prices) and operational difficulties at the remaining mines. However, management notes the resumption of operations at the Raspadskaya open-pit in 4Q20 due to a recovery in coking coal prices. Total coal product sales declined 10% q/q from Raspadskaya, as a result of, which we see a marginal mid-single digit risk to our 3Q20 coal sales figures for EVRAZ.
Russian steel major ​Severstal​ posted $476mn adjusted net profit in 3Q20 under IFRS, jumping by 90% year on year. In quarter-on-quarter terms the net profit of the company declined by 58% to $167mn, mainly due to a non-cash $262mn forex loss. As reported by ​bne IntelliNews​, Severstal posted a strong trading update for 3Q20, with consolidated sales of steel products up by 18% q/q, and beating the expectations of the analyst. Severstal's revenues in 3Q20 rose 18% q/q to almost $1.9bn, driven by the steel price recovery q/q and steel sales volumes growth, while Ebitda increased by 31% q/q to $656mn, reflecting topline growth.
Severstal​ has reported a solid 3Q20 trading update, positively surprising us on steel sales volumes ​and the sales mix. According Interfax, Severstal has decreased its guidance for 2020 production at Yakovlevsky GOK 26%, from 2.7mnt to 2mnt. Despite somewhat lower resources volumes, we expect a solid 28% q/q rise in EBITDA to $646mn in 3Q20F, driven by higher volumes and profitability improvements. We expect the company to announce a dividend of $300mn, offering a 2.8% yield. The company plans to report its 3Q20 earnings on 22 October.
Crude steel output of 2.89mnt exceeded our expectations by 3%, with steel sales printing a more solid 3.02mnt and exceeding our estimates by as much as 13%. The company surprised on the upside in terms of the mix (HVA share of 49%, the highest since 3Q17), while the share of domestic sales recovered to a more normal level of 63% in 3Q20
154 ​RUSSIA Country Report​ November 2020 www.intellinews.com