Severstal reports Q3 & 9M 2012 financial results
OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces its Q3 & 9M 2012 financial results.
CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER ENDED 30 September 2012
|
$ million, unless otherwise stated
|
Q3 2012
|
Q2 2012
|
Change, %
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9M 2012
|
9M 20111
|
Change, %
|
|
Revenue
|
3,591
|
3,718
|
(3.4%)
|
10,988
|
12,085
|
(9.1%)
|
|
EBITDA 2
|
546
|
664
|
(17.8%)
|
1,772
|
2,817
|
(37.1%)
|
|
EBITDA margin, %
|
15.2%
|
17.9%
|
(2.7 ppts)
|
16.1%
|
23.3%
|
(7.2 ppts)
|
|
Profit from operations
|
369
|
481
|
(23.3%)
|
1,235
|
2,319
|
(46.7%)
|
|
Operating margin, %
|
10.3%
|
12.9%
|
(2.6 ppts)
|
11.2%
|
19.2%
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(8.0 ppts)
|
|
Net profit3
|
329
|
155
|
112.3%
|
912
|
1,572
|
(42.0%)
|
|
EPS 4 , $
|
0.41
|
0.19
|
115.8%
|
1.07
|
1.56
|
(31.4%)
|
Notes:
1) amounts reflect adjustments made in connection with the presentation of discontinued operations and the early adoption of the revised IAS 19 “Employee benefits”.
2) EBITDA represents profit/(loss) from operations plus depreciation and amortization of productive assets adjusted for gain / (loss) on disposals of property, plant and equipment and intangible assets.
3) Attributable to shareholders of OAO Severstal.
4) EPS is calculated based on the following weighted average number of shares outstanding during the period: 849.7 million shares for 9M 2012, 810.6 million shares for Q3 2012, 812.3 million shares for Q2 2012 and for 1,005.2 million shares for 9M 2011.
Q3 2012 vs. Q2 2012 ANALYSIS:
- Higher sales volumes at Severstal Resources and Severstal Russian Steel divisions, but lower realized prices across divisions impact Group revenue and EBITDA lines;
- Severstal Russian Steel division delivered increased revenue, but Group revenue decreased 3.4% to $3,591 million (Q2 2012: $3,718 million) due to softer sales at Severstal Resources and Severstal International;
- EBITDA declined by 17.8% to $546 million (Q2 2012: $664 million) and EBITDA margin decreased to 15.2% (Q2 2012: 17.9%), primarily due to lower EBITDA at Severstal Resources and Severstal International;
- Q3 net profit broadly doubled q/q to $329 million (Q2 2012: $155 million). The company registered FX gains of $152 million in Q3, as compared to FX losses of $143 million in Q2;
- Recommended dividend payment of 3.18 roubles per share (approximately $0.10) for the 9 months ended 30 September 2012.
9M 2012 vs. 9M 2011 ANALYSIS:
- Revenue down by 9.1% to $10,988 million (9M 2011: $12,085 million) due to lower steel and bulks prices;
- EBITDA down 37.1% to $1,772 million (9M 2011: $2,817 million) and EBITDA margin down to 16.1% (9M 2011: 23.3%), due to lower earnings at Severstal Russian Steel and Severstal Resources divisions.
FINANCIAL POSITION HIGHLIGHTS:
- Liquidity position strengthened further: $2,121 million in cash and cash equivalents, comfortably covering short-term debt of $1,877 million;
- Net Debt/EBITDA increased slightly to 1.4x at end of Q3 2012 due to drop in EBITDA for the last twelve months, but remains below target level of 1.5x;
- In September, Severstal successfully placed $475 million of Senior Unsecured Convertible Bonds due 2017;
- In October, Severstal successfully placed $750 million of 10-year Eurobonds with a coupon rate of 5.9%.
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