Evraz pledges share buyback plan despite reporting $1.28bn in net loss

Russian focused steelmaker Evraz on Wednesday pledged to buy-back its shares despite reporting a net loss of $1.28bn last year.

The FTSE 250 listed group’s 2014 net loss was more than double its $504m loss in 2013. Group revenues decreased by 9.4% in 2014 year to $13.1bn, in line with estimates at $13.2bn, mostly as a result of a decline in the Steel segment revenues, which account for 72.9% of the total Group revenue.

“Evraz's steel sales volumes (including those from the Steel North America segment) declined by 1.9% to 15.2 million tonnes in 2014. The decline in the revenue of the Steel segment was largely caused by lower prices of steel products, in line with the general negative trend in steel pricing,” said the group.

It added that the timing of adjustments to domestic steel prices in Russia and Ukraine lagged behind the timing of the devaluation of local currencies against the US dollar that occurred in 2014.

“The selling prices of steel products decreased by 7.3% year on year accompanied by a fall in revenues from sales of steel segment non-core products, including iron ore, vanadium, coke, chemicals and scrap,” the group added.

But the company viewed the results as positive, describing the "fundamental strength" of its business model being the driver of underlying robustness.

“Due to our low cost operations we were able to achieve healthy margins in the key markets where we operate. Importantly, a strong operational performance and solid free cash flow led to a reduction in financial leverage,” said group chief executive Alexander Frolov.

As such, the group said it will buyback as much as 8% of its own shares in a tender offer, at a 10% premium to its last closing price.