16th Apr 2014 07:51
LONDON (Alliance News) - Evraz PLC Wednesday said its crude steel production fell in its first quarter due to scheduled maintenance, and average selling prices fell in Russia for its steel products compared to the previous year.
The Russian steel maker said its crude steel production fell by 9.2% to 3.7 million tonnes for the three months ended March 31 compared from 4.1 million tonnes the previous year due mainly to scheduled maintenance works at its Russian steel mills.
The company said that as a result, its gross output of steel products fell 5.8% to 3.8 million tonnes from 4.0 million tonnes.
However, the firm said that in the second quarter it expects to grow the output of crude steel and steel products at its Russian mills due to reduced scheduled downtime for maintenance and repairs.
Evraz said total saleable coke production fell 28% to 255,000 tonnes from 356,000 tonnes and its pig iron production fell 5.1% to 3.0 million tonnes from 3.2 million tonnes.
The company also said its first quarter production of iron ore products in Russia fell 2% compared to its previous quarter as a result of its disposal of its Teya and Abakan mines during December 2013 and the disposal of its VGOK site in October 2013.
Evraz said the average prices for all of its steel products in Russia decreased during the period compared to the previous year but its pig iron prices slightly increased and the company noted that since March, prices have started to increase as a result of the improving demand and the start of the construction season.
The company noted that average prices for the majority of its steel products in North America rose, thanks to a better product mix and high demand as well as lower imports.
Evraz added that in the first quarter its preliminary capital expenditure amounted to USD158 million, compared with USD185 million in the previous quarter and USD262 million the previous year.
Earlier in April, the company reported a wider net loss for 2013, as cost cutting failed to offset a drop in revenues caused by a drop in steel prices.
The company reported a net loss of USD522 million for the year, compared with a loss of USD398 million in 2012, as revenue fell to USD14.41 billion, from USD14.73 billion. Its earnings before interest, tax, depreciation and amortisation dropped 10% to USD1.82 billion.
Evraz said in April that 2014 had started "mildly positively" in most of its regional steel markets, with long steel volumes in Russia picking up thanks to the start of the construction season. It said prices for railway products are stable, while the severe winter weather in the US has pushed prices higher.
"However, certain risks remain, in particular the growth of seaborne supply of steelmaking raw materials over the medium term and geopolitical risks. Management's response to potential continued volatility in markets consists of comprehensive cost cutting programmes, deleveraging and the disciplined development of growth options in order to be well prepared for the next upturn of the cycle," the company said at the time.
Evraz shares were trading 2.6% lower at 82.30 pence, the fourth biggest faller on the FTSE 250 Wednesday morning.
By Tom McIvor; [email protected]; @TomMcIvor1
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