MOSCOW, October 12 (RIA Novosti) - Evraz Group [LSE: EVR], Russia's top steel producer, is seeking to buy assets outside the country, the company's chief financial officer said Thursday.
"As for our international operations, there are several interesting units we are looking [to buy]," Pavel Tatyanin told RIA Novosti in an interview. "These are units that fit into our general down-stream acquisition logic, units complementary to our export of slabs from Russian subsidiaries."
"We will also try to continue consolidating our positions in steel roll sales on mature European and U.S. markets," he said.
Commenting on recurrent reports about Evraz being in merger talks with Russian and foreign groups, Tatyanin said: "The company is not holding talks on a merger with anyone at this point. We are not looking at Russian assets as we are busy completing our investment program at Russian metals units, and there is enough to do here in terms of further cost-cutting."
Tatyanin said he expected Evraz' 2006 profits to exceed figures for the two previous years.
"The second half of 2006 will look much better than the first one in terms of EBITDA and net profits," he said. "Profits will be higher because the prices, especially on export markets, will be much better. We therefore expect year-end EBITDA and net profits [in 2006] to top not just last year's figures, but also the record-highs we posted in 2004."
The company reported its net profits, calculated according to international accounting standards, at $905 million in 2005, and $1.3 billion in 2004; its EBITDA (earnings before interest, depreciation, tax and amortization divided by total revenue) was at $1.86 billion and $2.1 billion, respectively.
In the first half of 2006, net profits fell 6.7%, year-on-year, to $571 million, and EBITDA decreased 2%, to $1.096 billion
Incomes from the consolidation of U.S. vanadium producer Stratcor, in which Evraz bought a 73% stake in August, and from the acquisition of 25% in South Africa's Highveld, will also contribute to larger overall profits, Tatyanin said.
Evraz has a vertically integrated industrial chain, with its coking coal and iron ore facilities providing the raw materials needed to smelt steel. Forty-one percent of its stock belongs to U.K.-based Millhouse Capital, which manages Russian billionaire Roman Abramovich's assets.
