(EVR) Evraz revealed a full year loss that was worse than the market had expected which resulted in shares falling about 11% 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 it’s main markets at the half-year stage. After all, global steel prices softened throughout much of 2012 and the group suffered an 8% drop in it’s all important steel revenues. Annual steel production fell 5% 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% year on year. A lower margin product mix is another worry and group cash profit fell 31% to $2.01 billion. The headline loss reflects a $413 million goodwill impairment linked to iron ore business Evrazruda, together with a $41 million foreign exchange loss – compared with a gain of $262 million in 2011. Still, management did at least keep a lid on cash and a hefty debt burden fell 4% in a year.
Prior to these figures, Moscow based investment house Sovlink estimated fair value at 58.2 cents a share on a discounted cash flow. ( www.investorschronicle.co.uk)