EVRAZ Announces Unaudited Interim Results for H1 2012

HIGHLIGHTS

Mining:

- Production of saleable iron ore products 10.5 million tonnes (+1% vs. H1 2011)

- Raw coking coal production 4.0 million tonnes (+11%)

- Raw steam coal production 0.7 million tonnes (-49%)

- Mining segment revenue (Including intersegment revenues) US$1,383 million (-32%)

Steel:

- Crude steel production 8.4 million tonnes (-2%)

- Total external steel sales volumes 7.7 million tonnes (-3%)

- Steel segment revenue (Including intersegment revenues) US$7,019 million (-6%)

Vanadium:

- Primary vanadium production (vanadium in slag) 11,369 tonnes (+12%)

- External vanadium product sales volumes 9,665 tonnes (-13%)

- Vanadium segment revenue (Including intersegment revenues) US$263 million (-18%)

Corporate developments:

- Railway products division was established to further enhance customer relationships

- Five-year contract signed with Russian Railways

- New labour agreement in place in South Africa

- EVRAZ plc shares included in MSCI UK Index series from 1 June 2012

Investments:

- Capital expenditure of US$565 million (vs. US$462 million in H1 2011)

- Rail mill modernisation at ZSMK well advanced to increase volumes and quality of rails from Q1 2013

- Implementation of pulverised coal injection projects to reduce consumption of coking coal and natural gas in blast furnace production from early 2013

- Capacity and product mix expansion in the North American tubular and rail sectors

- Development of Yerunakovskaya VIII mine, production to commence in H2 2013

Financial:

- US$600 million 5-year notes issued in April 2012 at 7.4% rate

- Amendments to financial covenants in syndicated loan facilities that provide greater financial flexibility (net leverage ratio increased to 3.5, interest coverage ratio decreased to 3.0).

Dividends:

- EVRAZ declares an interim dividend of US$0.11/ordinary share of EVRAZ plc

- Ex-dividend date – 5 September 2012, record date – 7 September 2012; deadline for currency election – 10 September 2012; fixing of FX rate date – 20 September 2012; payment date – 5 October 2012.

Alexander Frolov, EVRAZ plc Chief Executive Officer commented:

“EVRAZ achieved a creditable performance in the first half of 2012 despite the volatile macroeconomic environment and negative trends in the markets for global steel and global steelmaking raw materials.

“The steel sector in Russia has been resilient during the Period with demand driven by private sector construction activity as well as by Russian Government-financed infrastructure projects. A seasonal improvement in the Russian construction market, which has led to 9.5% higher demand levels than H1 2011, has caused supply constraints and allowed us to slightly increase prices for construction steel in the Russian market from May 2012.

“We have been successful in implementing our strategy of expanding into high value added steel products (such as head hardened rails, premium connection OCTG tubes and heat treated seamless pipe) and we were able to successfully increase internal supply of our steel slabs out of Russia to serve our operations in Europe and North America.

“Growth over the next five years will be largely driven by the expansion in mining which aims to produce 22 million tonnes of iron ore products and 15 million tonnes of coking coal per annum by 2016, thereby increasing our self-coverage in iron ore to 120% and to more than 130% in coking coal. We believe these iron ore and coking coal investments continue to offer an attractive rate of return in spite of the uncertain outlook for commodity prices.

“Another important source of growth is through an improvement to the product mix as a result of significantly increasing the share of high value added products in our steel business’ portfolio. Investments in this area include the rail mill reconstruction at EVRAZ ZSMK, the building of two new construction steel mills in the south of Russia and Kazakhstan, an upgrade of the wheel shop at EVRAZ NTMK and modernisation of rail and tubular mills in North America. Each of these projects has made demonstrable progress during the Period.

“The pulverised coal injection projects, scheduled for completion at the end of 2012 at EVRAZ NTMK and early 2013 at EVRAZ ZSMK, will increase our energy efficiency substantially, thereby reducing the need for natural gas and reduce our coking coal consumption by 20%. The positive impact of these projects will be significant to the Company in most market scenarios because the main driver for profitability from these investments is a sustained reduction in the consumption of natural gas usage by our operations.

“Since our admission to the FTSE 100 in December 2011, we have undertaken a number of initiatives to further strengthen our corporate governance. These include the adoption of a new Code of Business Conduct which we are currently rolling out across the Group and initiatives to ensure compliance with the UK Bribery Act, such as training, more detailed policies and internal procedures for employees. Furthermore, we strengthened our Board with the appointment of Alexander Izosimov as an independent non-executive director in February 2012.

“The global economy and, in turn, the steel industry, remain very volatile and we continue to be cautious on the outlook for the remainder of 2012. Due to our low position on the global cost curve, our steelmaking capacity continues to operate at high utilisation rates and we expect our steel production volumes in Q3 2012 to be broadly in line with Q2 2012. Export prices continue to decline, while we have slightly increased prices for construction steel products in the Russian market in June-September 2012.

“Whilst we expect that 2012 will continue to provide challenging short-term headwinds for our business, we are committed to investing in our future growth through increasing mining volumes, improving product mix and reducing costs. Although the full benefit of these investments is expected to be realised in the medium to long term, we anticipate some positive impact in H2 2012.”

Giacomo Baizini, EVRAZ plc Chief Financial Officer, said:

“The Board has declared an ordinary interim dividend of 11 cents per share, compared to 6.7 cents per share equivalent ordinary interim dividend as paid on Evraz Group S.A. shares and GDRs for the same period last year.

“This dividend reflects cash flow generation in H1 2012 and confidence in the longer-term outlook for the Company, in spite of the current challenging operating environment.”