Page 164 - RusRPTJun21

● Steel
Evraz reported a soft set of 1Q21 trading results on Thursday, 29 April.
Crude steel production was down 2% y/y (-4% q/q in Russia but +15% q/q in North America), while steel sales were down 10% q/q due to the 18% q/q drop in sales of semi-finished steel and the 2% q/q decline in finished steel sales. Sales of vanadium products were down 20% q/q. The company reported strong improvements in pricing in 1Q21, which is in line with market dynamics. Evraz’s 1Q21 realized prices for slab gained 29% q/q, while prices for rebar, which is sold predominantly on the domestic market, rose 32% q/q. Steel prices in Evraz’s North American division also posted strong gains in 1Q21, with long steel prices up 22% q/q, flat steel prices up 20% q/q and tubular goods prices up 12% q/q. Although the company provided no outlook for 2Q21 and beyond, we expect to see positive dynamics in the demand for steel production on both sides of the Atlantic in 2Q21, as well as in the pricing environment.
Mechel reported 1Q21 IFRS. The results showed strong dynamics both q/q and y/y on the back of elevated steel and raw material prices. Revenue rose 9% q/q and 2% y/y to $1bn, supported by improving coal and steel prices over the period
.
· EBITDA increased by 87% q/q and 25% y/y to $245mn
· Adjusted net income increased by 53% q/q and over 7x y/y to
$114mn
· Net debt excluding fines and penalties on overdue amounts rose
by 3% q/q, but fell 23% y/y to $4.2bn. Mechel’s net debt to EBITDA improved notably, according to the company calculations – 6.9x as of end-1Q21 vs 7.9x at end-2020
· According to the company, the decrease in production and sales in 1Q21 limited its ability to improve financial results due to favorable market trends. However, despite lower volumes, the improvement of market trends at the end of last year and the beginning of this year has enabled the company to restart programs of maintenance repairs and equipment acquisition, stabilize the supply of raw
164 RUSSIA Country Report June 2021 www.intellinews.com