Bloomberg News

Evraz Earnings Were $5.95 Billion in 1st Nine Months

November 14, 2008

Evraz Group SA, the steelmaker part- owned by Russian billionaire Roman Abramovich, said earnings before interest, tax, depreciation, and amortization were $5.95 billion in the first nine months of the year.

Sales were $17.1 billion, Evraz said today in a statement distributed by the Regulatory News Service. It didn't provide figures for the year-earlier period.

Evraz raised steel output 31 percent to 4.9 million metric tons in the quarter. Semi-finished steel products prices were 82 percent higher in the period and coking-coal prices more than double, the Luxembourg-registered company said last month.

Sales from steel products in the third quarter were $5.27 billion while revenue from mining products was $338 million, Evraz said. Iron ore sales were $275 million.

Total debt at Sept. 30 was $10.21 billion. Cash and cash equivalents held at the end of the quarter totaled about $623 million.

The company cut production last month as construction companies froze projects and delayed payments. The company's factories in Ukraine and Russia may reduce output to 25 percent of capacity and Italian production will shrink, Chief Financial Officer Pavel Tatyanin said Oct. 30.

Staff Cuts

The steelmaker plans to cut steel factory staff salaries by a third and fire 15 percent of its 800 staff at the Moscow head office, Vedomosti said today, citing an unidentified company official. Evraz is introducing shorter working days and reducing bonuses, the newspaper said.

``Steel prices currently fall below the cost curve'' for Evraz plants in the U.S., Europe, Ukraine and for some Russian operations, Boris Krasnojenov, analyst with Renaissance Capital, said in a note before the results were published. ``Demand will inevitably override supply in 2009 due to colossal production cuts worldwide.''

Evraz may delay indefinitely $1.8 billion of projects in Russia and Kazakhstan because of declining demand, Tatyanin said last month.

To contact the reporters on this story: Yuriy Humber in Moscow at yhumber@bloomberg.net Mark Herlihy in London at mherlihy1@bloomberg.net.

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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