Russian steelmaker Evraz (EVR) revealed a full-year loss that was worse than the market had expected - which resulted in the shares falling about 11 per cent on the day the figures appeared. Sentiment wasn't helped by management's decision to axe the full-year dividend, either.
Admittedly, Evraz had foreshadowed the problems affecting its main markets at the half-year stage. After all, global steel prices softened throughout much of 2012 and the group suffered an 8 per cent drop in its all-important steel revenues. Annual steel production fell 5 per cent in the year to 15.9m tonnes, too, partly reflecting repair and maintenance works shutdowns. Evraz expects output to be static throughout this year.
What's more, combined revenue from the mining and vanadium segments fell 29 per cent year on year. A lower-margin product mix is another worry and group cash profit fell 31 per cent to $2.01bn (£1.31bn). The headline loss reflects a $413m goodwill impairment linked to iron ore business Evrazruda, together with a $41m foreign exchange loss - compared with a gain of $269m in 2011. Still, management did at least keep a lid on cash costs and the hefty debt burden fell 4 per cent in the year.
Prior to these figures, Moscow-based investment house Sovlink estimated fair value at 582¢ a share - on a discounted cash-flow basis.
| EVRAZ (EVR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 189p | MARKET VALUE: | £2.8bn | |
| TOUCH: | 189-190p | 12-MONTH HIGH: | 384p | LOW: 176p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 351¢* | NET DEBT: | 115% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 9.77 | -338 | -24.0 | nil |
| 2010 | 13.4 | 633 | 39.0 | nil |
| 2011 | 16.4 | 873 | 36.0 | 17.0 |
| 2012 | 14.7 | -106 | -23.0 | 11.0† |
| % change | -10 | - | - | -35 |
*Includes intangible assets of $2.77bn, or 188¢ a share †Half-year dividend only £1=$1.54 | ||||
