Evraz Announces Audited Financial Results for 1H 2011

EVRAZ Group S.A. announced its audited interim results for the six months until 30 June 2011.

1H 2011 Highlights:

Financial:

- Consolidated revenue US$8,380 million (+31% vs. 1H 2010)

- Consolidated adjusted EBITDA US$1,629 million (+41%)

- Net profit of US$263 million (+49%). Without the effects of one-off transactions net profit would have been US$494 million (One-off losses of US$231 million in 1H 2011 were caused by the conversion and early repurchase of debts)

- Operating cash flow US$1,594 million (+114%)

- Net debt US$6,042 million (-15% vs. 31 December 2010)

- Short-term debt US$604 million (-15% vs. 31 December 2010)

- Interim dividend of US$89 million and special dividend of US$402 million announced

Giacomo Baizini, Evraz Group’s Chief Financial Officer, commented:

“Our financial performance, benefiting from the market recovery and growth of raw material prices, showed a significant improvement during the first half of 2011. This was reflected in a 31% increase in revenue, 41% increase in EBITDA and 49% increase in net income compared to the first half of 2010”.

“Net profit in 1H2011 was negatively affected by one-off items. Without one-off losses of US$231 million relating to the conversion and early repurchase of debts our 1H 2011 net profit would have been US $494 million”.

Steel segment: - Crude steel production 8.6 million tons (+4%); - Total external steel sales volumes 7.9 million tons (+3%); - Steel segment revenue US$7,492 million (+29%)

Mining segment: - Iron ore production 10.4 million tons (+8%); - Mining segment revenue US$2,040 million (+82%)

Financial management: - Issuance of US$850 million Eurobonds at a coupon rate of 6.75% due 2018; - Early redemption of US$622 million of 2013 Eurobonds; - Issuance of RUB20 billion (approx. US$710 million) 5-year Ruble bonds; - Conversion of US$650 million convertible bonds originally due in 2014; - Rating upgrades by Standard & Poor’s and Fitch to “B+” and “BB-“ respectively

Dividends:

- Dividend policy amended to pay not less than 25% of the adjusted consolidated net income

- EVRAZ declares for the first time since 2008 an interim dividend of US$0.60 per share/US$0.20 per GDR (a total of US$89 million) and a special dividend of US$2.70 per share/US$0.90 per GDR (a total of US$402 million)

- Dividends record date – 28 October 2011; payment – no later than 30 days after the record date

Alexander Frolov, Chief Executive of Evraz Group, commented on financial results for 1H 2011: “Evraz has delivered a strong performance in the first half of 2011 on the back of the continuation of a measured recovery in the global steel markets. The prices for steelmaking raw materials grew faster than the steel prices, allowing Evraz to benefit from its high-level of vertical integration. We maintained full utilization of our steelmaking capacity in Russia and high levels of utilization of our major international plants in North America, Europe and South Africa”.