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UPDATE 2-Evraz doubles H1 profit, to pay first dividend since 2014
August 10, 2017 / 6:53 AM / a month ago

UPDATE 2-Evraz doubles H1 profit, to pay first dividend since 2014

(Adds details, share price)

By Jack Stubbs

MOSCOW, Aug 10 (Reuters) - Russian integrated steel and mining company Evraz reported a doubling in first-half core profits on Thursday and proposed its first dividend since 2014, with results buoyed by higher coking coal and steel prices.

Evraz, Russia’s top producer of coking coal, said its earnings before interest, taxation, depreciation and amortisation (EBITDA) totalled $1.15 billion in the first six months of the year, up from $577 million a year earlier.

Analysts polled by Reuters forecast that Evraz would report EBITDA of $1.15 billion.

The company also said its board had recommended an interim dividend payment of $0.30 per a share - its first payout to shareholders since 2014.

Evraz and other Russian metals and mining companies, such as Mechel, borrowed heavily before Russia’s economic crisis and were subsequently hit by a collapse in both domestic and global demand for their products.

Evraz stopped dividend payments in 2014 as part of a drive to reduce debt, but said on Thursday it was now in a position to reward shareholders after cutting its net debt to EBITDA ratio to two, down from 3.1 at the end of last year.

“The decision follows a comprehensive review of Evraz’s financial situation, which indicates that the group is well- placed to meet its current and future financial requirements,” the company said in a statement.

“Other factors considered included the solid results for the first half of 2017 and positive outlook for the year.”

Russian steelmakers such as Evraz and market leader NLMK have seen their prospects improve in 2017 after two hard years, due to higher metals prices and a nascent recovery in the Russian economy.

Evraz’s revenue jumped 44 percent year-on-year to $5.1 billion in the first half of the year, while net profit totalled $86 million, up from $7 million in the same period a year ago.

Net debt was reduced by 11 percent year-on-year to $4.28 billion, the company said.

“Coal and steel prices remained strong during the reporting period and account for much of the improvements in the results,” CEO Alexander Frolov said in a statement.

Evraz’s London-listed shares were up 1.4 percent at 269 pence at 1008 GMT, after hitting an eight-month high of 274.6 pence earlier in the session.

Evraz was one of the international companies hit by a cyber attack in late June which crippled businesses in Ukraine, where it has operations, and spread worldwide to shut down shipping ports, factories and corporate offices.

On Thursday the company said all IT systems and data affected by the attack have been recovered and no significant damage had been caused. ($1=0.7704 pounds) (Reporting by Jack Stubbs; Editing by Jane Merriman, Greg Mahlich)

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