Severstal (CHMF) Q2 2021 earnings summary

Executive summary

• Q2 2021 saw record steel prices and strong demand, driving significant revenue and EBITDA growth.

• Net profit for Q2 2021 was $1,139 million, up from $721 million in Q1 2021.

• For H1 2021, revenue was $5,165 million, up from $3,295 million year-over-year, with net profit at $1,860 million.

• EBITDA for H1 2021 was $2,809 million, margin 54.4%, up from $1,056 million and 32.0% year-over-year.

• Free cash flow surged 88% quarter-over-quarter in Q2 and rose to $1,433 million for H1 2021.

Financial highlights

• Q2 2021 revenue reached $2,946 million, up 33% quarter-over-quarter; EBITDA was $1,647 million, up 42%.

• Gross profit for H1 2021 was $3,025 million, up from $1,313 million year-over-year.

• Basic earnings per share for H1 2021 were $2.24, compared to $0.56 in the prior year.

• Net cash from operating activities for H1 2021 increased to $1,975 million from $911 million year-over-year.

• Dividends paid in H1 2021 totaled $945 million.

Outlook and guidance

• Steel prices remain high but are starting to drop; focus is on maintaining premium pricing in export markets.

• Russian government to impose a temporary 15% export duty on steel from August to December 2021, expected to impact H2 results.

• Company targets a 3% CO2 emissions reduction by 2023 and 10% by 2030 (vs. 2020 baseline).