8th Aug 2019 08:31
(Alliance News) - Steel and coal firm Evraz PLC said first-half results were "healthy" despite profit halving due to foreign exchange costs.
In the six months to June 30, the company's pretax profit fell by 55% to USD690.0 million from USD1.54 billion in the same period last year.
Evraz booked a foreign exchange hit of USD273.0 million, compared to a USD147.0 million gain the first six months of 2018.
Earnings before interest, tax, depreciation and amortisation, on the company's preferred alternative measures, fell by 22% to USD1.48 billion from USD1.91 billion. Evraz said this was due to "depressed vanadium prices and lower average coking coal prices".
The company also stated its cost-cutting scheme generated USD111.0 million additional Ebitda during the half.
Revenue slumped by 3.2% to USD6.14 billion from USD6.34 billion following falls in its steel segment, excluding North America, and its coal operations.
In the Steel division, revenue fell by 6% to USD4.16 billion but costs of sales rising by 1.6% to USD2.96 billion.
Revenue did rise in the North American steel unit however, by 13%, to USD1.32 billion.
The coal segment reported a 9.3% fall in revenue to USD1.13 billion. Costs of sales rose 1.9%, slower than revenue growth, to USD543.0 million.
The company declared a first half dividend of USD0.35, 13% down on the USD0.40 US it paid in the same period last year.
Chief Executive Alexander Frolov said: "We have finished the first half of the year with a set of rather healthy results, supported by positive trends in our key product markets. In Russia, we saw a recovery of the construction activity and, as a result, an increase in the consumption of most of our products."
Looking ahead, the company said markets will be "volatile" during the second half of 2019 but the Russian steel market and continued "efficiency improvements" will support its financial performance.
Shares in Evraz were up 1.8% at 610.70 pence each in London on Thursday morning.
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