Evraz in the first half of the year increases profits amid cost cuts

London: Evraz reported a 21% jump in pre-tax interim profit despite falling revenues as steel costs were cut and benefits from the devaluation of the Russian ruble. Income before tax was $ 120 million, up from $ 99 million in the same period last year, despite a decline in revenues to $ 4.79 billion from $ 6.63 billion.

The company said it cut costs by $ 149 million in the first half and cut capital expenditures by nearly a third to $ 251 million in response to falling steel product prices. Aleksandr Frolov, Chairman of the Board of Directors of Evraz, said: “In the first half of 2015, sales volumes in our main Russian and North American markets declined markedly, exacerbated by continued pressure on global steel prices. On the positive side, we managed to maintain our market share and transferred part of our Russian sales to export markets in response to changes in demand for metal products. "

He said the company continues to pursue its strategy of delivering low cost manufacturing, superior customer service, cost and target cost savings, while improving capital expenditures. Evraz anticipates that the results will continue to suffer from low steel prices and falling commodity markets, predicting a moderate decline in demand for its steel products due to instability in the Russian market, which is due to a decrease in investment activity, which will constrain efficiency in priority market segments ...

“If current market conditions persist in the second half of 2015, steel prices will continue to decline and key currencies will continue to decline against the US dollar. In this case, the devaluation of the Russian ruble will have a positive impact on operating expenses, helping Evraz maintain healthy margins, ”he said.