EVRAZ PLC Unaudited Interim Financial Results For H1 2022
(US$ million) | H1 2022 | H1 2021 | Change, % |
Consolidated revenues | 8,097 | 6,178 | 31 |
Profit from operations | 383 | 1,749 | -78.1 |
Consolidated EBITDA1 | 2,486 | 2,082 | 19.4 |
Net profit | 6 | 1,212 | -99.5 |
Net cash flows from operating activities | 632 | 1,410 | -55.1 |
Free cash flow1 | -59 | 836 | n/a |
CAPEX1 | 513 | 430 | 19.3 |
30 June 2022 | 31 December 2021 | Change, % | |
Net debt1 | 3,165 | 2,667 | 18.7 |
Total assets | 13,370 | 9,854 | 35.6 |
In H1 2022, the MB FeV benchmark averaged US$45.0/kgV, an increase of 35% YoY. Demand in the key markets, specifically in Europe and North America, started to decline in Q2 2022 mainly due to the crisis in the automotive industry and overall economy slowdown in those regions. In China, vanadium demand stays 15% below the 2021 levels despite recovery from lockdowns in April–May, as construction steel output continues its downtrend. As a result, during the reporting period price in Europe and China decreased from US$43–44/kgV (April) to circa US$37–38/kgV (May–June). The US market maintains a premium relative to the European market, mainly due to the mid-term market imbalance caused by lower local supply, logistics constraints and changes in the import structure, while real demand from the steel industry is rather declining.
In the vanadium business, EVRAZ maintained all of its supply and conversion chains, as well as its leading position at most of consuming markets globally. However, demand from the steel industry in Europe and North America started to decline in Q2 2022 due to overall economy slowdown and a crisis in the automotive industry, which led to a certain shift in the geography of sales towards Asian markets. The Group has increased share of vanadium products sold under the long-term contracts to 60–65% in H1 2022, focusing primarily on the strategic partnership with customers, including technical support and joint R&D activities aiming to promote and increase high performance vanadium-alloyed steel usage in various applications.
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