Tough steel market sees Evraz earnings slashed

Steelmaker Evraz saw earnings fall by more than a third in its 2015 results on Tuesday, though the FTSE 250 firm still managed to shrink its net loss and net debt during the calendar year.

During 2015, the firm saw free cash flow of $799m (£561m), down 21% on 2014's $1.01bn. Evraz's net debt was reduced to $5.3bn, from $5.8bn, and the group made cost savings of $374m due to ongoing productivity improvements and cost-cutting initiatives.

Basic earnings per share were 45 cents, against 78 cents in 2014.

Evraz reported consolidated EBITDA of $1.44bn, down 38.9% from $2.36bn a year earlier. The company blamed weaker commodity prices, partially offset by lower expenses in US dollar terms due to depreciation in the rouble.

Its EBITDA margin of 16.4% was 1.6 percentage points lower than 2014's 18% figure, as a result of the cost-efficiency programme and market initiatives.

Evraz saw its net loss shrink to $719m, from £1.28bn in 2014, with the board citing a $444m impairment of assets and a $367m foreign exchange loss for the plunge below the waterline.

"In 2015, Evraz maintained a strong focus on its competitive advantages to meet the challenges of the current market, extending its leadership in infrastructure steel products worldwide and in the Russian coking coal market," said chief executive officer Alexander Frolov.

He said that, in response to a challenging environment, the group introduced a programme of countermeasures delivering continuous revenue and cost improvements.

"In 2015 they contributed $374m to EBITDA, which - together with working capital release and investment discipline - resulted in a strong year-end free cash flow of $799m allowing Evraz to reduce debt by $465m," Frolov concluded.