Evraz steels investor nerve with payout

Release time：Aug 14, 2019 From：admin

Industrial group Evraz (EVR) described its first half results as “worse” than the year before and also “rather healthy”. Both statements can be true, but the increased dividend statement makes the latter more applicable for investors.

Evraz’s steel division (which doesn't include North American steel operations) took a hit from lower demand. Revenue was down 6 per cent to $4.2bn (£3.5bn) on the year before, and the coal division saw its take come down 9.3 per cent on lower sales prices, to $1.1bn. The steel and coal divisions’ cash profit figures were down 24.6 per cent and 22.7 per cent respectively. 

The North American steel segment brought in more revenue (up 14 per cent) and cash profits (up 50 per cent) than last year because of demand for “semi-finished” and railway products. Chief executive Alexander Frolov, who has sold off more than £50m worth of shares this year, said Evraz’s home market had provided good sales levels. “In Russia, we saw a recovery of the construction activity and, as a result, an increase in the consumption of most of our products,” he said, but forecast stormy weather for the rest of the year. 

The cash profit margin fell from 30 per cent last year to 24.1 per cent in the first half, because of lower vanadium and coal prices, but the company recouped some cash profits through cost-cutting savings of $111m. 

Analyst consensus collated by Bloomberg gives full-year cash profits of $2.9bn and $2.7bn in 2020, representing respective falls of 24 per cent and 29 per cent fall on the 2018 comparator.

https://www.investorschronicle.co.uk/shares/2019/08/13/evraz-steels-investor-nerve-with-payout/