Severstal Q4 EBITDA down 5.3% to $602 mln, above forecast
MOSCOW. Feb 18 (Interfax) - Severstal posted $602 million in Q4 2014 earnings before interest, taxes, depreciation and amortization (EBITDA) to International Financial Reporting Standards (IFRS), 5.3% less than in Q3 2014, the steel company said in a statement.
This was above the $593 million that analysts predicted in a consensus forecast for Interfax.
The EBITDA margin in October-December rose by 3.7 percentage points compared to Q3 to 32.1%. This is the highest margin since Q3 2008, Severstal said.
EBITDA grew 21.2% in the full year 2014 to $2.2 billion.
Group revenue decreased 16.2% quarter-on-quarter in Q4 to $1.878 billion, "despite a high share of high value-added (HVA) products in the sales portfolio at Russian Steel as well as significant sales volumes growth at Resources." "The revenue decrease reflects a decline in average selling prices (at both divisions) on the back of the sharp rubles devaluation," the company said.
Net loss of $795 million (Q3 2014: $45 million) was primarily impacted by FX losses of continuing operations of $1.214 billion, impairment of $131 million and a gain on disposal of $16 million of the discontinued operation. Adjusting for those non-cash items, Severstal would have posted a net profit of $534 million in Q4 and $323 million in Q3 2014.
Severstal financial highlights to IFRS in Q4 and FY 2014 ($ mln):
| Q4 2014 | Q4/Q3 2014 | 2014 | 2014/2013 | |
| Sales revenue | 1 878 | -16,2% | 8 296 | -12,1% |
| EBITDA | 602 | -5,3% | 2 203 | 21,2% |
| EBITDA margin | 32,1% | 3,7 pp | 26,6% | 7,3 pp |
| Operating profit | 453 | -5,4% | 1 594 | 31,8% |
| Operatung margin | 24,1% | 2,7 pp | 19,2% | 6,4 pp |
| Free cash flow | 425 | 95% | 1 232 | +3.2-fold |
| Net loss | 795 | +17.6-fold | 1 602 | - |
| Loss per share, $ | 0,98 | +16.3-fold | 1,98 | - |
Severstal's gross debt declined 2.8% during Q4 2014 to $3.429 billion. "Aided by proceeds from the Severstal North America (SNA) disposal, Group gross debt over the last year decreased by more than $1 billion (YE 2013: $4.7543 billion)," the company said. "Despite the fact that our debt is predominantly public, further deleveraging remains our priority," it said.