Russian steelmaker PAO Severstal has increased its revenue 33% quarter-on-quarter to $2.9 billion with EBITDA reaching $1.6 billion (42% quarter-on-quarter). The company’s EBITDA margin increased to 55.9%.
Alexander Shevelev, the company’s CEO commented: “The COVID-19 pandemic continues to challenge regions across the world, and Russia is no exception. The number of new cases has grown significantly in recent weeks,” he said, adding that the health of employees was Severstal’s number one priority. “We have intensified all preventive measures. As an essential part of our efforts to reduce the risk of infection, we have started an information campaign encouraging our employees and contractors to get vaccinated. Today more than 50% of our staff already has immunity through vaccination or antibodies after infection and we aim to reach 80% by the end of the summer,” he said.
Hot metal output decreased 2% quarter-on-quarter to 2.63Mt because of scheduled blast furnace repairs. Crude steel production decreased to 2.78Mt (down 6% quarter-on-quarter) as a result of lower hot metal output and seasonal servicing works in the BOF shop.
Severstal reports quarter-on-quarter sales up 2%, due mainly to strong sales of semi-finished and High Value Added (HVA) products and claims that its total share of HVA products amounted to 49%.
Where raw materials sales were concerned, coal was down 18% quarter-on-quarter to 0.28Mt, driven by a decline in steam coal sales.
The company continued to focus on implementing its environmental strategy and last month Vorkutaugol announced the termination of steam coal production starting Q1 2022.
“Another vital health and safety focus is workplace injury prevention.”Alexander Shevelev, CEO, PAO Severstal
Iron ore sales were up 28% to 1.3Mt and this was driven by strong demand for pellets in Europe, with sales growing 34% quarter-on-quarter as crude steel production continued to recover in the EU27.
“Another vital health and safety focus is workplace injury prevention,” said Shevelev. He said that LTIFR for both staff and contractors declined in Q2 2021 to 0.63. “However, the LTIFR for our staff was unfortunately up 14% to 0.57 quarter-on-quarter and regrettably we had two fatalities in Q2 2021: one fatality among staff and one among contractors,” he said.
Shevelev said that Severstal is continuing to improve it’s environmental strategy. The company has set a medium-term goal to reduce the carbon intensity of CO2 emissions per tonne of steel by 10% by 2030. “The medium-term target will be achieved through projects including the technical re-equipment of production facilities and the introduction of the best available technologies at all the Company's assets,” he said.
“Severstal's strong performance in Q2 2021 has demonstrated the benefits of our business model and sales flexibility.”Alexander Shevelev, CEO PAO Severstal.
On a macro level, Shevelev said Q2 2021 was ‘remarkably strong’ and that the global economic recovery supported steel and raw materials prices across all key regions. “This led to a robust set of financial results in the reporting quarter. Revenue grew by 33% quarter-on-quarter to $2.9 billion due to an increase in average prices coupled with a growth in sales volumes and an improved product mix, with the share of HVA products expanding by 3 ppts quarter-on-quarter to 49%. EBITDA rose by 42% to $1.6bn following a widening of revenue and price spreads.