1st Apr 2015 06:56
LONDON (Alliance News) - Evraz PLC Wednesday said it will return USD375 million to its shareholders even though its pretax loss widened in 2014 on the back of a USD1.0 billion foreign exchange loss caused by the devaluation of the rouble, saying it has "improved business prospects" in 2015.
The FTSE 250-listed steel miner reported a pretax loss of USD1.08 billion in 2014, compared with a USD637 million loss in 2013, on the back of the substantial foreign exchange loss and an impairment charge.
Evraz booked a USD540 million impairment against units at Evraz North America, Evraz Palini e Bertoli and Evraz Highveld Steel and Vanadium, slightly down from the USD563 million in impairments it booked in 2013.
However, the USD1.0 billion loss on foreign exchange compared with a loss of USD258 million in 2013. The foreign exchange loss was caused by the weakening of the rouble against the dollar.
Its earnings before interest, tax, depreciation and amortization rose 28% to USD2.32 billion, from USD1.82 billion, as Evraz opitmised its assets and cut costs. The figure was also given a lift as expenses in dollar terms fell at its at Russian and Ukrainian subsidiaries due to drop in the local currencies.
Revenue by 9% to USD13.06 billion from USD14.41 billion, mostly as a result of a decline in the steel segment revenue, which accounts for 72.9% of the company's total revenue. Steel sales for the year fell by 1.9% to 15.2 million tonnes, largely due to lower prices of steel products.
Evraz said it plans to return up to USD375 million to shareholders by way of a tender offer. The company said it will purchase over 120.9 million shares from qualifying shareholders at a tender price of USD3.10 per share. The offer represents a maximum of 8% of the company's issued share capital, it said. The offer is subject to shareholder approval.
"The board noted the positive financial performance of the Evraz group and improved business prospects for 2015. In view of strong positive cash flow and the liquidity to service debt and meet 2015 maturities, as well as the reduced 2016 debt redemption requirement, the board is announcing the tender offer," it said in a statement.
Net debt in 2014 fell by 11% to USD5.81 billion from USD6.53 billion, and it ended the year with a cash balance of USD1.08 billion.
In 2014, the company spent USD654 million in capital expenditure, down 27% from the USD902 million spent in 2013. The majority of 2014 expenditure was directed towards maintenance spending.
In 2015, the company said it plans to expand its coal sales in Russia whilst maintaining premium export sales, but said Russian coke production is expected to fall by 2% to 3% and said it expects to sell a "significantly larger part" of its steel products to export markets during the year compared to 2014.
By Joshua Warner; [email protected]; @JoshAlliance
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