Public Stock Company VSMPO - AVISMA Corporation, the world's largest manufacturer of titanium and titanium alloys products, and its subsidiary companies (hereinafter referred to as 'Group') has published the consolidated financial statements for the year ended 31 December 2020 prepared in accordance with International Financial Reporting Standards (IFRS), audited by KPMG JSC.

MARKET OVERVIEW

A sharp fall of the air travel due to the outbreak of coronavirus pandemic resulted in a temporary reduction in demand in the aerospace and engine construction sectors in 2020.

The reduction in titanium consumption in the industrial market was not so significant, the demand for titanium products remained comparable to the pre-crisis levels.

The coronavirus pandemic did not have a substantial impact on the titanium consumption in the Russian Federation and the demand remains at a high and stable level .

KEY OPERATIONAL INDICATORS OF YE2020:

as compared to the same period of YE2019

  • Sales volume of titanium products reduced by 21% to 25.5 thousand tons
  • Sales volume of ferrotitanium reduced by 39% to 5.7 thousand tons
  • Sales volume of aluminum reduced by 25% to 2.9 thousand tons

tons, unless otherwise stated

2020

2019

Sales volume of titanium products

- TOTAL

25 537

32 474

- titanium products ( export )

16 701

24 152

- titanium products ( Russia + CIS )

8 836

8 322

Sales volume of ferrotitanium

5 670

9 327

Sales volume of aluminum

2 951

3 940

KEY FINANCIAL INDICATORS OF Y2020:

as compared to the same period of Y2019

  • Revenue decreased by 23% to US$ 1,251.1 million
  • EBITDA decreased by 18% to US$ 461.8 million
  • EBITDA margin increased to 37%
  • Net profit reduced by 71% to US$ 91.7 million
  • Net debt reduced by 54% to US$ 459.8 million
  • Net debt/EBITDA ratio decreased to 1,00 х
  • Capital costs volume reduced by 24% to US$ 119,6 million

US$ million, unless stated otherwise

2020

2019

Revenue

1,251.1

1,628.6

Operational profit

235.0

337.4

EBITDA

461.8

562.8

Net profit / ( loss )

91.7

321.0

EBITDA margin , %

37%

35%

Operating cash flow

594.3

225.5

CAPEX

119.6

156.4

Free cash flow (FCF)*

474.7

69.1

Net debt

459.8

998.3

Net debt / EBITDA ratio

1.00х

1.77х

Interest costs

43.0

59.3

Working capital **

1,167.8

1,283.7

*Free cash flow (FCF) = Net cash flow from operating activities - CAPEX

**Working capital = Current assets - Current liabilities

CAPITAL COSTS

The Group continues implementing its CAPEX program aimed at expansion and reconstruction of production capacities, including the following major projects:

  • Expansion of machining capacities in Disc and Ring Machining Shop
  • Purchasing and installation of plasma melting furnace
  • Purchasing and installation of 4 000 ton forging press complex

FINANCIAL STANDING

Despite the performance decline, the Group maintains stable financial position in 2020. The Group continues to maintain liquidity and financial stability. In 2020, the Group used its cash for debt repayments which resulted in the Group's gross debt in US dollars declining by 19% at the end of the year.

KEY EVENTS IN Y2020:

Russian Rating Agency Expert (Expert RA) assigned credit rating of ' ruAA ' with a stable outlook to VSMPO-AVISMA Corporation in September.

  • In September, the Annual General Meeting of Shareholders of VSMPO-AVISMA Corporation decided not to pay dividends on ordinary shares based on the results of Y2019
  • In September, the Company Board of Directors approved Russian bond program and the prospectus relating thereto for the maximum nominal amount of RUB 40 billion
  • In November, VSMPO-AVISMA Corporation Board of Directors approved a program of VSMPO-AVISMA Corporation ordinary shares buy back at the open market
  • In December, VSMPO-AVISMA Corporation Board of Directors appointed Dmitry Osipov as General Director of VSMPO-AVISMA Corporation

MATERIAL EVENTS AFTER THE REPORTING PERIOD:

  • In January, VSMPO-AVISMA Corporation announced the extension of long-term agreements with its major customers Boeing and TITAL (Howmet)

ABOUT VSMPO-AVISMA CORPORATION

Public Stock Company VSMPO-AVISMA Corporation is the world's largest vertically integrated manufacturer of titanium and titanium alloy products. The Corporation also produces aluminum alloy extrusions, steel alloy and nickel-based heat-resistant alloy semi-finished products. VSMPO-AVISMA Corporation is a leader in the global market for high-tech titanium products , is deeply integrated into the global aerospace industry and is a major strategic supplier of titanium products for many companies. Products manufactured by VSMPO-AVISMA Corporation are widely used in power engineering, petrochemical industry, shipbuilding, medicine and civil engineering. The Corporation enjoys business relationships with more than 45 0 companies, including the world's leading aircraft manufacturers, in 50 countries worldwide.

VSMPO-AVISMA Corporation is a public stock company incorporated in the Russian Federation. VSMPO-AVISMA Corporation is listed on the Moscow Exchange, Russia.

VSMPO-AVISMA Corporation

Press Center contacts:
Tel.: +7 (34345)6-00-98

pressa@vsmpo-avisma.ru

VSMPO-AVISMA Corporation

Corporate Finance and Investor Relations:

Tel.: +7 (34345)6-21-51
d.muz@vsmpo-avisma.ru

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OAO Korporatsiya VSMPO-AVISMA published this content on 15 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2021 03:13:09 UTC.