Evraz NA Performs Well Despite Parent Company Struggles

The Russian steelmaker made no mention of Russian forces invading Ukraine in February in its H1 financial results, citing only “geopolitical tensions, mounting economic pressure and sanctions” impacting its performance. These issues will continue to shape Evraz’s operating environment and financial position for the remainder of the year and beyond, the company said.

Evraz’s global H1 revenues of $8.1 billion showed a 31% year-on-year (YoY) increase, while large foreign exchange losses in particular caused a huge decline in net profit from $1.2 billion in H1 2021 to just $6 million so far this year.

Global steel sales accounted for $5.2 billion of total H1 revenues, with total steel sales in North America reaching $1.6 billion. North American sales were up 64% YoY, with revenues from flat-rolled products showing a 42% YoY rise to $507 million and tubular product sales rising 167% to $631 million.

Evraz’s North American operations recorded H1 2022 earnings before interest, taxes, depreciation and amortization (ebitda) of $296 million. “Our North American facilities continued to operate in spite of the geopolitical tensions affecting customer and supplier relationships and delivered a solid financial result,” the company said.

Chicago-based Evraz North America has six manufacturing facilities located in Portland, Ore.; Pueblo, Colo.; Regina, Saskatchewan; and Calgary, Camrose and Red Deer, Alberta. In North America, Evraz is a leading producer of rail, pipe and steel plate. The company also has 18 scrap operations throughout Canada and the US.

In June, Evraz idled large-diameter pipe production at its Regina, Saskatchewan, mill, citing soft market conditions. The mill’s production of discrete plate, coiled plate, and small-diameter line pipe and OCTG has not been affected by the idling.

Commenting on the current state of the company, Evraz said: “The heightened risks the group faces due to geopolitics and actions of national governments include the severance of ties with suppliers and customers, disruption of logistics chains, price hikes for various materials and equipment (in some cases – inability to purchase them), currency volatility, financial market restrictions, including hampered FX payments, and others. This required serious effort on the company`s management as it worked to maintain business stability amid the deteriorating economic backdrop, external pressures, and rapidly changing operating environment.”

By Laura Miller, Laura@SteelMarketUpdate.com