6 March 2015
Despite the decline in metal prices, Severstal Distribution Group
(distribution network of the Severstal Russian Steel Division) maintained its
revenue at 2013 level, increased EBITDA to $ 37 million and increased operating
cash flow to $ 47 million in 2015.
A 6% increase in sales volume (versus 2013 level) allowed retaining revenue at
the level of $ 819 million.
Earnings before interest expenses, taxes, depreciation and amortization
(EBITDA) increased by 46% to $ 37 million ($ 26 million in 2013) and operating
cash flow grew almost three times up to $ 47 million ($ 17 million in
2013).
Meanwhile, EBITDA of AO Severstal Distribution (previously known as ZAO Trade
House Severstal-Invest) increased more than twice in 2014 ($ 22 million) versus
2013 ($ 9 million). Operating cash flow (OCF) increased by 40% to $ 46 million
during the reporting period ($ 33 million in 2013).
EBITDA of the European company Severstal Distribution (which previously
included AO Severstallat and OOO Severstallat Silesia) amounted to $ 11 million
in 2014 under pressure of decline in metal price in Europe. Nevertheless, the
company significantly increased its operating cash flow (OCF): a year before
the reporting period, it was negative ($ 18.7 million in 2013); while at the
end of 2014 it reached $ 0.6 million.
The basis for improved consolidated results of Severstal Distribution Group in
2014 was a new network of branch and trade offices and closer cooperation with
the Sevestal Russian Steel Division aimed at improving customer
satisfaction.
Andrey Alexeev, head of Severstal Distribution Group, explained: “Last year we
created a network of service warehouses in centers of consumption and trade
offices in regions. This system allows the customers to use unique services
provided by Severstal and its distribution network. Our proposal includes
various steel products and related services from processing in metal center and
delivery to financial solutions. In close cooperation with marketing and sales
directorate, main production and other services of Severstal we develop best
offers for customers and various industries adapted to their
business”.
Also, in 2014 Severstal Distributon Group continued to work on business
processes optimization which allowed a 17% reduction of general and
administrative expenses (G & A) per tonne of product sold compared to 2013.
As a part of internal efficiency improvement, the company simplified
organization structure and implemented a system of functional management.
***
Distibution network of the Severstal Russian Steel Division includes metal
sales companies of PAO Severstal located in five countries. By 2015, these
companies, previously known as Trade House Severstal-Invest (Russia),
Severstallat (Latvia), Severstallat Silesia (Poland), Severstalbel (Belorussia)
and Severstal-Ukraine were renamed into Severstal Distribution. Sales volume of
Severstal Distribution Group in 2014 amounted to 1.23 million tones.
Severstal Russian Steel - Division of PAO "Severstal" - one of leading steel
producers in Russia. In 2014, Division produced 11.3 million tonnes of steel;
sales of steel products amounted to 10.6 million tones. Revenue of Division in
2014 amounted to $ 7,492,000, EBITDA amounted to $ 1,634,000. Companies of the
Division are among the world’s most efficient steel producers.
www.severstal.ru
PАО Severstal is one of the world’s leading vertically integrated steel and
steel related mining companies, with assets in Russia, the Ukraine, Latvia,
Poland, Italy and Liberia. Severstal is listed on RTS and MICEX and the
company’s GDRs are traded on the LSE. Severstal reported revenue of $ 8,296
million and EBITDA of $ 2,203 million in 2014. Severstal’s crude steel
production in 2014 reached 11.3 million tonnes.