Earnings before interest, tax, depreciation and amortisation (Ebitda) is an unusual profit metric to measure dividends against, particularly for a capital-intensive resource company with big debts and a rising tax bill. But Evraz (EVR) is an unusual company, particularly when it comes to capital management, and by this point it’s unsurprising to see the group confirm that it paid shareholders $1.6bn (£1.2bn) of the $3.8bn-worth of Ebitda it generated in 2018.
That continues to provide a yield which leaves Evraz’s London-listed peers in the shade. Then again, conditions couldn’t have been more favourable to the Russia-focused vertically integrated steel giant, which benefited from the depreciation of the rouble against the dollar, a fall in raw material costs, and a $132m gain from portfolio-wide cost improvement measures.
Those drivers were particularly evident in the core steel business, where a rise in sales prices for vanadium products and steel offset a dip in output, and combined with slightly lower costs to boost gross profit by a whopping 68 per cent to $3.27bn. Even the lower-margin North American steel segment upped its contribution to the bottom line, thanks to spiking volumes and prices.
Consensus forecasts are for earnings of $1.07 per share this year, down from an earlier estimate of $1.41 for 2018.
| EVRAZ (EVR) | ||||
| ORD PRICE: | 562p | MARKET VALUE: | £ 8.1bn | |
| TOUCH: | 561.6-562p | 12-MONTH HIGH: | 590p | LOW: 353p |
| DIVIDEND YIELD: | 15.8% | PE RATIO: | 4 | |
| NET ASSET VALUE: | 168¢ | NET DEBT: | 184% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 13.1 | -1.08 | -78 | nil |
| 2015 | 8.8 | -0.71 | -45 | nil |
| 2016 | 7.71 | -0.09 | -15 | nil |
| 2017 | 10.8 | 1.16 | 49 | 60 |
| 2018 | 12.8 | 3.20 | 167 | 118* |
| % change | +19 | +177 | +241 | +97 |
| Ex-div: | 07 Mar | |||
| Payment: | 29 Mar | |||
| Comprises four quarterly dividends of 13¢, 40¢, 25¢ and 40¢ £1=$1.33 | ||||
