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. Last Updated: 07/27/2016

Purchases Help Evraz Double Profits

Evraz Group, the country's largest steelmaker by domestic volume, said Friday that net profit rose 98.2 percent to $1.13 billion in the first half of 2007 due to high steel prices, acquisitions and cost controls.

Evraz said in a statement that first-half 2007 revenues rose 57.5 percent to $6.02 billion and earnings before interest, taxation, depreciation and amortization grew 87 percent to $2.05 billion.

The company said it expected to boost consolidated revenues for the full year by 45 percent to 55 percent from $8.29 billion and EBITDA by 55 percent to 60 percent from $2.65 billion.

Evraz said new acquisitions in the United States and South Africa contributed $1.12 billion, or 50.8 percent of the increase in revenues year on year.

The company acquired Oregon Steel Mills in the United States to become the world's largest producer of rails, as well as U.S. vanadium producer Stratcor and Highveld Steel and Vanadium Corporation in South Africa.

Evraz, in which the investment vehicle of Roman Abramovich has a 41 percent stake, increased steel sales volumes 1.5 percent year on year to 8.5 million tons.

Evraz chairman and chief executive Alexander Frolov said the company expected to produce 7.6 million to 7.8 million tons of crude steel output in the second half of 2007. Added to first-half production of 8.4 million tons, this would give full-year output of 16 million to 16.2 million tons of crude steel -- in line with 2006 output of 16.1 million tons. Frolov said rolled steel output in the second half would be 7.4 million to 7.6 million tons, including 1 million tons in the United States and 370,000 tons in South Africa.

"The revised 2007 [capital expenditure] program of approximately $690 million will mainly be for the ongoing projects and maintenance at Highveld and production safety at Yuzhkuzbassugol," Frolov said.

Evraz in June acquired the 50 percent in coal miner Yuzhkuzbassugol that it did not already own following two fatal disasters at the company's mines. It intends to merge the firm with Raspadskaya, in which it shares ownership with the management, to create the country's top coking coal producer.