Russia's Evraz sees net profit slump on rouble strength (updated)

Evraz

04/08/2022 08:53

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coverage of Russian military operations in Ukraine

 (Adds detail, quotes, context)
    MOSCOW, Aug 4 (Reuters) - Russian steel producer Evraz
 EVRE.L  saw net profit almost wiped out in the first half as
the strong rouble and a mix of other headwinds hit the company's
operations, the group said on Thursday. 
    Britain sanctioned Evraz in May in response to Russia's
decision to send thousands of its troops to Ukraine, but
provided a licence which allows continued business with Evraz's
North American subsidiaries.  urn:newsml:reuters.com:*:nL5N2WX8BM
    "Recent geopolitical tensions have given rise to significant
corporate governance and operating challenges for Evraz,"
Aleksey Ivanov, chief executive, said in a statement. "On top of
that, (the) strong rouble, declining demand for our products,
and increased competition on Evraz's traditional markets present
additional headwinds." 
    Net profit fell by 99.5% year-on-year to $6 million in
January through June, hurt by foreign exchange losses caused by
the stronger rouble.
    Core earnings or EBITDA rose by 19.4% to $2.5 billion due to
higher coal prices and the improved performance by its North
American assets, while the company also reported a negative free
cash flow of $59 million compared with positive $836 million in
the same period a year ago. 
    Geopolitical tensions, economic pressure and sanctions
continue to shape Evraz's operating environment in the second
half of 2022, Ivanov said, adding that the company would delay
some development projects amid hindered access to foreign
equipment.
    Evraz does not disclose its current shareholder structure.
Previously its major shareholder included Russian businessman
Roman Abramovich, who has also been hit by the sanctions.
    Trading in Evraz's London-listed shares has been suspended
since March 10.

 (Reporting by Reuters; Editing by Jason Neely and David Holmes)