Operational Results for Q and FY 2016

Transcription

1 Operational Results for Q and FY 2016 Metalloinvest, a leading global iron ore and HBI producer and a regional steel producer, today announces its operational results for the fourth quarter and full year Management comments Production highlights In FY 2016, the Company increased output of all major products, reaching all-time high results in iron ore, pellets, HBI/DRI and hot metal production Iron ore production In FY 2016, the Company increased iron ore output by 3.1% y-o-y to In Q4 2016, the Company increased iron ore production 1 to 10.3, 4.0% higher q-o-q 2. Annual pellet output reached 25.2, up by 5.9% y-o-y, mainly due to the launch of Pellet Plant #3 at MGOK. In Q4 2016, pellet production decreased by 3.0% q-o-q to 6.3 In FY 2016, the Company increased HBI/DRI production by 4.8% y-o-y to 5.7, due to higher productivity of DRI units at OEMK, among other factors, which also contributed to the increase of output in Q to 1.5 (15.5% q-o-q growth) In FY 2016, the Company increased hot metal output by 20.2% y-o-y to 3.0, due to the launch of Blast Furnace #4 and Pig Iron Casting Machine #5 at the end of In Q4 2016, hot metal production amounted to 0.7, down by 5.4% q-o-q Pellet production HBI/DRI production Hot metal and crude steel production In FY 2016, the Company increased crude steel production by 3.6% y-o-y to 4.7. In Q4 2016, crude steel production equalled 1.2, up by 5.7% q-o-q Hot metal Crude steel 1 Hereinafter iron ore refers to iron ore concentrate and sintering ore 2 Hereinafter q-o-q represents change in Q vs. Q (if not stated otherwise) 1

2 Iron ore product shipments In FY 2016, the domestic market share decreased to 61% versus 66% in 2015, while the share of shipments to the European market increased to 25%, compared with 19% in 2015, due to an increase in supplies to customers in the Netherlands, Slovakia and Italy. In Q4 2016, the share of shipments to the Russian and European markets was unchanged q-o-q and amounted to 62% and 27%, respectively Shipments by region* Russia Europe Asia MENA Others 6% 4% 4% 4% 9% 6% 5% 6% 17% 3% 15% 26% 27% 27% 20% 69% 57% 61% 62% 62% * Shipments of iron ore, pellets and HBI/DRI In FY 2016, the share of iron ore products shipped to the Asian market amounted to 8% versus 10% in 2015, while the share of shipments to MENA remained at approximately 4%. In Q4 2016, the share of iron ore product shipments to Asia and MENA amounted to 3% and 6%, respectively, compared with 5% and 4% in Q Open pit at Mikhailovsky GOK 2

3 Pig iron and steel product shipments In 2016, the share of the domestic market decreased to 24%, compared with 28% in 2015, mainly due to reallocation of shipments to export sales. In Q4 2016, the share of products shipped to Russia increased to 33% from 20% in Q3 2016, mainly as a result of pig iron demand growth following an increase in scrap price In 2016, the share of shipments to the European region amounted to 17% versus 20% in 2015, mainly as a result of growth in shipments to customers in the USA, UAE and Morocco. In Q4 2016, shipments to Europe amounted to 14%, largely unchanged q-o-q Shipments by region** Russia Europe Asia MENA Others 17% 32% 25% 27% 27% 35% 27% 31% 25% 32% 0% 1% 2% 20% 1% 7% 24% 14% 15% 15% 27% 20% 23% 20% 33% ** Shipments of pig iron and steel products In 2016, shipments of pig iron and steel products to MENA remained at 29%. In Q4 2016, the share of shipments to the MENA region decreased to 25% from 31% in Q3 2016, mainly due to increased supply to the domestic market SBQ Steel at OEMK Flat steel at Ural Steel 3

4 Mining Segment In Q4 2016, LGOK increased iron ore concentrate production by 5.0% q-o-q to 5.6, mainly as a result of scheduled reduction of maintenance works. Annual output increased by 3.0% y-o-y to 21.8, mostly due to a scheduled decrease in maintenance works and increased productivity as a result of higher recovery ratios Iron ore concentrate production at MGOK in Q increased by 4.7% q-o-q to 4.3, mainly as a result of a low base in Q3 2016, due to scheduled maintenance works at the crushing and processing plant. In 2016, iron ore production at MGOK stayed largely flat y-o-y, amounting to 16.9 In Q4 2016, pellet production at LGOK decreased by 4.3% q-o-q to 2.3, mostly as a result of change in the pellet production mix (increased fluxed pellets output) and scheduled maintenance works at one of the pellet plants. The increase in pellet production by 3.0% y-o-y to 9.3 in 2016 was due to scheduled major maintenance works with reconstruction at a pellet plant in 2015 In Q4 2016, MGOK increased pellet production by 1.3% q-o-q to 3.2, mainly due to a scheduled reduction of maintenance works. In 2016, the increase in pellet production by 9.5% y-o-y to 12.0 was due to Pellet Plant #3 reaching design capacity (launched in September 2015). This offset the effect of scheduled maintenance works at Pellet Plant #1 and change in the pellet production mix Iron ore production LGOK concentrate MGOK concentrate 12.0 MGOK sintering ore Pellets & HBI production LGOK pellets MGOK pellets LGOK HBI Shipments of iron ore products Third-party shipments Intragroup shipments In Q4 2016, LGOK increased HBI production by 19.4% q-o-q to 0.7, mainly due to the low base of the previous quarter, as a result of scheduled major maintenance works at HBI-1 and HBI-2. The annual output growth of 2.3% to 2.7 resulted from lengthy major maintenance works at HBI-1 in autumn

5 Steel Segment Crude steel production 30 January 2017 Pellet production at OEMK decreased by 13.2% q-o-q to 0.9 in Q as a result of scheduled major maintenance works at its pellet plant. In FY 2016, production increased by 2.5% y-o-y to 3.9, due to higher productivity following measures to improve operational efficiency with regard to increasing pellets gas transmission rate OEMK Ural Steel In Q4 2016, OEMK increased DRI production by 12.3% q-o-q to 0.8, mainly as a result of scheduled major maintenance works at DRI units in Q Annual output amounted to 3.0, an increase of 7.1% y-o-y, mostly due to DRI units' higher productivity Shipments by product Steel products Pig iron 1.8 In Q4 2016, OEMK increased crude steel production by 1.8% q-o-q to 0.9, due to a scheduled decrease in the duration of maintenance works. Annual crude steel output increased to 3.6 (2.9% y-o-y growth) mainly as a result of the higher productivity of electric arc furnaces, following the modernisation of the gas purification system In Q4 2016, hot metal production at Ural Steel amounted to 0.7, a decrease of 5.4% q-o-q caused by maintenance works at oxygen compressor shop facilities. Annual output amounted to 3.0, an increase of 20.2%. This significant growth resulted from the launch of Blast Furnace #4, with higher productivity than Blast Furnace #2, which was put out of operation, and the commissioning of Pig Iron Casting Machine #5 at the end of 2015 In Q and FY 2016, Ural Steel increased crude steel production by 19.7% and 5.7% q-o-q to 0.3 and 1.1, respectively. This increase can be attributed to higher capacity utilisation of Continuous Casting Machine #1, following increased cast billet demand and scheduled major maintenance works at Continuous Casting Machine #2 in Q

6 Appendix Metalloinvest consolidated results Iron ore products Production Iron ore* 10,343 9, % 10, % 40,697 39, % Pellets 6,348 6, % 6, % 25,190 23, % HBI/DRI 1,474 1, % 1, % 5,698 5, % Shipments by product** Iron ore* 2,783 2, % 2, % 10,738 10, % Pellets 3,862 3,863 % 3, % 14,535 14, % HBI/DRI % % 2,514 2, % Other*** 4 4 % % Total shipments 7,307 6, % 7, % 27,804 27, % Shipments by region**** Russia 4,494 4, % 5, % 16,844 18, % Europe 1,964 1, % 1, % 6,945 5, % Asia % % 2,092 2, % MENA % % 1,184 1, % Other % Total shipments 7,307 6, % 7, % 27,804 27, % * Iron ore refers to iron ore concentrate and sintering ore ** Shipments from plants (deviation from sales figures is possible due to changes in traders' inventories and is treated as immaterial) *** HBI fines and pellets screening at LGOK **** Iron ore, pellets, HBI/DRI, HBI fines and pellets screening 6

7 Appendix (continued) Metalloinvest consolidated results Pig iron and steel products Production by product Hot metal % % 2,963 2, % Crude steel 1,218 1, % 1, % 4,662 4, % Shipments by product* Pig iron % % 2,360 1, % Steel products 1,131 1, % 1, % 4,326 4, % Total shipments 1,695 1, % 1, % 6,686 6, % Shipments by region Russia % % 1,594 1, % Europe % % 1,153 1, % Asia % % MENA % % 1,912 1, % Other % % 1,842 1, % Total shipments 1,695 1, % 1, % 6,686 6, % * Shipments from plants (deviation from sales figures is possible due to changes in traders' inventories and is treated as immaterial) 7

8 Appendix (continued) Metalloinvest operational results Mining segment LGOK Production by product Concentrate 5,560 5, % 5, % 21,777 21, % Pellets 2,304 2, % 2, % 9,283 9, % HBI % % 2,663 2, % Shipments by product Concentrate 2,833 2, % 2, % 10,895 10, % Pellets 1,320 1, % 1, % 5,410 5, % HBI % % 2, % Other % % % Total shipments 4,901 4, % 4, % 19,176 18, % Inc. intragroup shipments Concentrate 969 1, % 1, % 3,957 3, % Pellets % % % HBI % % % Other % % % MGOK Production by product Sintering ore % % 1, % Concentrate 4,305 4, % 4, % 16,925 16, % Pellets 3,160 3, % 3, % 11,994 10, % Shipments by product Sintering ore % % 1, % Concentrate % % 3,822 4, % Pellets 3,199 3, % 3, % 12,008 10, % Total shipments 4,466 4, % 4, % 17,625 16, % Inc. intragroup shipments Sintering ore % % % Concentrate % % 1,523 1, % Pellets % % 2,467 1, % 8

9 Appendix (continued) Metalloinvest operational results Steel segment OEMK Production by product Pellets 884 1, % % 3,913 3, % DRI % % 3,035 2, % Crude steel % % 3,553 3, % Shipments by product DRI % % % Steel products % % 3,398 3, % Total shipments % % 3,495 3, % Ural Steel Production by product Hot metal % % 2,963 2, % Crude steel % % 1,108 1, % Shipments by product Pig iron % % 2,360 1, % Steel products % % % Total shipments % % 3,288 2, % 9

10 Shipments to third-parties Production 30 January 2017 Production and shipments in 2016 Iron ore 40.7 mn t +3% Pellets 25.2 mn t +6% HBI/DRI 5.7 mn t Hot metal +5% +20% 3.0 mn t Crude steel 4.7 mn t 4% Iron ore 10.7 mn t Pellets 14.5 mn t HBI/DRI 2.5 mn t Steel products 4.3 mn t Pig iron 2.4 mn t +X% Change in 2016 vs

11 IR contacts For any additional information, please don t hesitate to contact our Investor Relations & Corporate Ratings department or send an to ir@metalloinvest.com. Artem Lavrischev Director of department T: +7 (495) , ext Metalloinvest is a leading global iron ore and merchant HBI producer and supplier, and one of the regional producers of high-quality steel. The Company has the world's second-largest measured iron ore reserve base and is one of the lowest-cost iron ore producers. Metalloinvest is wholly owned by USM Holdings. Alisher Usmanov is the major beneficiary of USM Holdings (49%), with other major beneficiaries being the companies of Vladimir Skoch (30%) and Farhad Moshiri (10%). 11