Russian steelmaker Severstal has announced its financial and operational results for the second quarter and the first half of the current year.
According to the information released by Severstal, the company has posted sales revenues of 409.14 million RUB ($4.70 million) for the first half of the current year, with a 21.0 percent increase year on year, primarily due to an increase in average selling prices. The share of high value-added products in sales went up in the same period, also contributing to the increase in revenues. The sales revenues in the second quarter increased by 17.0 percent quarter on quarter to 220.43 million RUB ($2.5 million), thanks to the positive movement in selling prices.
Severstal’s EBITDA increased by six percent year on year to 126.56 million RUB ($1,45 million) in the first half of the year, while its EBITDA margin decreased by four percentage points to 31.0 percent due to an increase in the cost of production per metric ton during the major overhaul of blast furnace No. 5 and the acquisition of A GRUPP, one of the largest metal service companies in Russia. EBITDA in the second quarter was down by six percent quarter on quarter to 61.21 million RUB ($702,450), while the EBITDA margin declined by seven percentage points quarter on quarter to 28.0 percent.
In the second quarter, the company’s crude steel output totaled 2.32 million mt, down by 20.0 percent quarter on quarter, while its pig iron production in the given period totaled 2.0 million mt, falling by 28.0 percent compared to the first quarter, due to the maintenance works at the blast furnace and converter plant. In the given quarter, Severstal’s steel sales totaled 2.68 million mt, up by eight percent quarter on quarter, while its iron ore sales increased by 87.0 percent to 770,000 mt. In particular, the company’s semi-finished steel sales decreased by 95.0 percent to 1,000 mt, while sales of finished steel products increased by nine percent quarter on quarter to 2.68 million mt, including hot rolled and rolled product sales, up four percent to 1.23 million mt due to increased demand for rolled products with the start of the construction season, and high value-added steel sales, which rose by 15.0 percent quarter on quarter to 1.45 million mt.
In the meantime, in the first half this year crude steel and pig iron outputs amounted to 5.22 million mt and 4.77 million mt, respectively, down by 8.0 percent and 15.0 percent year on year, while iron ore sales increased by 16.0 percent to 1.18 million mt, due to reduced demand for iron ore at CherMK during the repair of blast furnace No. 5. In addition, in the first half of the year the company’s steel sales amounted to 5.16 million mt, decreasing by six percent year on year, while sales of semi-finished products were down by 97.0 percent compared to the same period of last year to 20,000 mt. Sales of finished products increased by five percent to 5.14 million mt, consisting of hot rolled and rolled products, up two percent to 2.42 million mt, and high-value added steel, up eight percent to 2.71 million mt, year on year.
“Despite the fact that pig iron and crude steel production was expected to decline in the second quarter due to major repairs, steel sales increased significantly by eight percent quarter on quarter to 2.7 million mt. This was made possible by the early formation of stocks of semi-finished steel products, as well as the acquisition of the distribution business of A GRUPP. Thanks to the enhanced distribution system, we were able to most effectively meet the growth of seasonal demand in our key domestic market, caused by the revival of the construction sector. The increase in sales volumes, together with the growth of average selling prices, had a positive impact on financial results. Revenue for the second quarter of 2024 increased by 17.0 percent to RUB 220.43 million, and our assets continued to successfully generate positive cash flow,” Alexander Shevelev, CEO of Severstal, stated.