ii view: EVRAZ profits drop

by Keith Bowman from interactive investor |

Steel maker EVRAZ suffers falling profits, but points to positive trends.

Half-year results  

  • Revenue down 3.2% to $6.1 billion
  • Adjusted profit (EBITDA) down 22% to $1.48 billion
  • Net profit down 70% to $344 million
  • Net debt up 2% to $3.65 billion
  • Dividend payment down 13% to 35 cents per share

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.

Our EBITDA reached almost US$1.5 billion, a 22% decline in year-on-year terms, amid depressed vanadium prices and lower average coking coal prices. In the second half of 2019, EVRAZ expects the markets to be volatile.”

ii round-up:

Established in 1992 by a group of Russian scientists and engineers, today EVRAZ (LSE:EVR) is a vertically integrated steel, coking coal mining and vanadium business with operations in Russia, the US, Canada, the Czech Republic, Italy and Kazakhstan.

It is a major global steel producer, making 13 million tonnes in 2018. 

The company reported half-year results which were broadly in line with analyst expectations. 

Falls in the price of vanadium, a metal used in steel alloys, coking coal and steel products impacted profits. 

Vanadium price were hit by increased production, with steel product prices suffering from high inventory levels.

Management expects trends in key product markets to remain in place with no significant deviations forecast. The share price rose by over 2% in early UK stock market trading. 

ii view:

EVRAZ remains committed to its strategy of maintaining leadership in infrastructure steel products with low-cost production along the value chain. Strength in the Russian steel market and the group’s ongoing cost cutting efficiency programme are expected by management to help underpin future performance. 

For investors, exposure to economic growth in Russia and the likes of China leaves the company offering potential long-term growth. But volatility of prices, strained relations between the West and Russia and exposure to trade tariffs elevate the risks. 


  • Cost savings programme being executed
  • A forward dividend yield of over 10%, not guaranteed


  • Volatile product prices
  • Tariffs on steel imports

The average rating of stock market analysts:


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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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