In its full-year financial results for 2018, EVRAZ reported an increase of 18.6 percent year-on-year in consolidated revenues, which were USD12,836 million compared to USD10,827 million in 2017. This performance was driven mostly by an upswing in prices for vanadium and steel products amid more favorable market trends.

EVRAZ’s consolidated EBITDA amounted to USD3,777 million in the reporting period, compared to USD2,624 million in 2017, boosting the EBITDA margin from 24.2 percent to 29.4 percent and free cash flow to USD1,940 million. The improvement is primarily attributable to higher vanadium and steel product prices, lower expenses in U.S. dollar terms because of the effect that ruble weakening had on costs in 2018 versus 2017, as well as the impact of cost-cutting initiatives on efficiency. This was partly offset by an increase in prices for raw and auxiliary materials, including scrap, electrodes, and ferroalloys.

The steel segment’s revenues (including inter-segment) climbed 14.7 percent year-on-year to USD8,879 million, or 62.2 percent of the group’s total. The growth was mainly attributable to higher revenues from sales of vanadium products, which rose by 111.4 percent year-on-year. A 124.6-percent increase was attributed to surges in average sales prices. Ongoing vanadium production restrictions together with China’s new high-strength rebar standard and strong global demand from steelmakers have severely affected stockpiles and pushed up price indices. Sales of steel products also increased by 5.8 percent due to higher sales prices, primarily for finished products.

The North American steel segment’s revenues increased by 38.6 percent year-on-year. Prices and volume went up by 22.6 percent and 14.4 percent, respectively. The key drivers of this growth were improved demand across product segments, particularly for tubular products driven by recovery in oil prices and drilling activity and the start of new major pipelines construction in Canada and the U.S.

The coal segment’s revenues grew by 5.6 percent year-on-year, supported largely by higher sales volumes, which were up 4.8 percent due to stable demand and improved productivity at the Raspadskaya-Koksovaya mine.

In 2018, the steel segment’s EBITDA rose due to an increase in steel and vanadium prices; lower expenses in U.S. dollar terms due to the effect that ruble weakening had on costs; and the impact of cost-cutting initiatives. This was partly offset by an increase in prices for raw and auxiliary materials, including scrap, electrodes, and ferroalloys.

The increase in volume and metal spreads of the North American steel segment was more than offset by the effect of tariffs and duties on Canadian large-diameter and line pipe sales into the U.S., as well as by operational challenges at EVRAZ’s Regina facility that resulted in a lower EBITDA.

The coal segment’s EBITDA declined slightly year-on-year, mainly due to higher cost per ton amid more complex geological conditions, the rise in auxiliary materials prices, and a higher contractor count. This was partly offset by sales prices rising in line with global benchmarks; the impact of cost-cutting initiatives; and lower expenses in U.S. dollar terms as a result of the ruble’s weakening.