Evraz PLC shares jumped on Friday after the Russian steelmaker achieved robust full-year profit and revenue growth as steel prices rose to their highest in years.
Evraz shares were trading 15% higher in London on Monday morning at 196.01 pence each, attempting to rebound after having dropped 30% on Thursday and losing two-thirds of its value so far in 2022.
In 2021, the London-based manufacturing and mining company posted a pretax profit of $4.18 billion, multiplied from the $1.30 billion recorded in 2020.
This was on total segment revenue growth of 45% to $14.16 billion from $9.75 billion the year before.
The increase can be put down a rise in steel prices.
‘In 2021, the steel industry was mostly driven by demand-side fluctuations. Steelmakers increased output in anticipation of more robust demand from the construction and manufacturing sectors. Unable to keep up with the accelerated pace of recovery, steel prices rose to their highest in years,’ Chief Executive Officer Aleksey Ivanov said.
The Russian steelmaker generated free cash flow of $2.26 billion last year, doubled from $1.02 billion in 2020.
The company noted that the demerger of its coal business PJSC Raspadskaya is expected to complete in late March 2022.
Evraz confirmed in December that it has entered definitive terms for the demerger. It will result in the creation of two distinct publicly listed businesses. Evraz said the demerger will allow each business to pursue ‘tailored strategic, capital allocation and sustainability objectives’ and added that it will serve the long-term interests of the firm.
The company noted that it is ‘conscious of the current geopolitical circumstances,’ and will continue to monitor the situation in Ukraine and intends to provide updates regarding any material developments that could influence its business.
On Thursday morning, tensions between Russia and Ukraine finally boiled over, with Russia launching a multi-front offensive, including from Belarus, against Ukraine on which was described as a ‘full-scale invasion’ using land, sea and air forces.
As of Friday, invading Russian forces pressed deep into Ukraine as deadly battles reached the outskirts of Kyiv, with explosions heard in the capital, that the besieged government described as ‘horrific rocket strikes’.
The US and its allies responded with a barrage of sanctions, but the Russian forces appeared intent Friday on pressing home their advantage after a string of key strategic victories on day one.
Evraz CEO Ivanov said: ‘In 2022, we will press ahead with further improving our ESG performance and strengthening our culture of continuous operational improvement. I strongly believe in our long-term success given the commitment of our employees, who represent the forefront of the industry.
‘The major part of the group is based in the Russian Federation and is consequently exposed to the economic and political effects of the policies adopted by the Russian government. Worsening situation related to Ukraine has further increased the economic uncertainty and the risk of the imposition of sanctions. These conditions and future policy changes could affect the operations of the group and the realisation and settlement of its assets and liabilities.’
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