Russian steelmaker Severstal has announced its financial and operational results for the fourth quarter and full year of 2024.
According to the information released by Severstal, the company has posted sales revenues of RUB 829.78 million ($8.36 million) for 2024, with a 14.0 percent increase year on year, primarily due to an increase in the share of finished steel products in sales and an increase in average selling prices. The sales revenues in the last quarter increased by three percent year on year to RUB 201.50 million ($2.02 million), thanks to the increase in sales volume.
Severstal’s EBITDA decreased by nine percent year on year to RUB 237.88 million ($2.39 million) in 2024, while its EBITDA margin decreased by seven percentage points to 29.0 percent due to an increase in the cost of production. EBITDA in the fourth quarter was down by 35.0 percent year on year to RUB 46.47 million ($467,815), while the EBITDA margin declined by 14 percentage points year on year to 23.0 percent.
In the fourth quarter, the company’s crude steel output totaled 2.69 million mt, down by eight percent year on year, while its pig iron production in the given period totaled 2.86 million mt, falling by three percent compared to the same quarter of 2023, due to lower converter steel output following lower pig iron production, as well as higher sales of commercial pig iron amid higher sales margins. In the given quarter, Severstal’s steel sales totaled 2.92 million mt, up by 14.0 percent year on year, mainly due to an increase in sales of pig iron and slabs by almost 2.7 times to 364,000 mt, while its iron ore sales increased by 20.0 percent to 280,000 mt. In particular, the company’s sales of finished steel products increased by four percent year on year to 1.13 million mt, including hot rolled product sales, down eight percent to 860,000 mt due to lower demand in Russia, and long product sales, which rose by 71.0 percent year on year to 270,000 mt. Sales of high value-added steel on the other hand rose by six percent year on year to 1.43 million mt, due to increased sales of metal structures, construction pipes, and galvanized and polymer-coated products.
In the meantime, in 2024 crude steel and pig iron outputs amounted to 10.38 million mt and 10.03 million mt, respectively, down by eight percent and 11.0 percent year on year, while iron ore sales increased by 51.0 percent to 2.23 million mt, due to reduced demand for iron ore at CherMK during the repair of blast furnace No. 5. In addition, in 2024 the company’s steel sales amounted to 10.85 million mt, increasing by one percent year on year, while sales of semi-finished products were down by 51.0 percent compared to 2023 to 465,000 mt. Sales of finished products increased by five percent to 4.76 million mt, while high-value added steel sales went up seven percent to 5.62 million mt, year on year.
“Overall metal consumption in the Russian market for the 12 months of 2024, according to our estimates, decreased by approximately 5.7 percent, primarily due to a slowdown in purchasing and investment activity in the construction industry in the second half of the year. Despite the challenging external environment, the company demonstrated sustainable results. Our sales of metal products in the fourth quarter of 2024 increased due to the recovery of semi-finished product sales following the completion of the first stage repair program and consolidation of GRUPP A results. 2025 poses new challenges for the company. Tight monetary policy and difficult access to credit will continue to have an adverse effect on business activity in Russia. If high rates remain for a long time, steel consumption in Russia in 2025 may continue to decline,” Alexander Shevelev, CEO of Severstal, stated.
On the other hand, Severstal plans a RUB 169 billion ($1.72 billion) investment for 2025. Of this amount, RUB 81 billion will be allocated to maintain existing capacities, and the company will invest another RUB 70 billion in development projects. The rest will be shared between IT and digital projects and safety systems. Commenting on the future investments, Shevelev stated, “The ambitious investment program for 2025 is a logical step in the implementation of our updated strategy until 2028. These investments will allow the company not only to meet market challenges, but also to create a sustainable competitive advantage in any conditions. A significant part of the investments will be directed to the modernization of the first stages of the Cherepovets plant. In addition, we are implementing a whole range of smaller but significant projects aimed at expanding the range and improving the quality of products. We are currently at the peak of investment activity, which is fully consistent with the plans laid out in the strategy. I am confident that our stable financial position allows us to make this leap without risks to the sustainability of the business.”