August 18, 2016 / 8:12 AM / in 2 years

UPDATE 1-Russian steel firm Evraz's core profits drop 38 pct

* Evraz says H1 EBITDA fell 38 pct y/y to $577 mln

* Sees 2016 capex in a range of $375-400 mln

* Expects gradual increase in Russian domestic prices

* Shares down 4 pct in London, top UK midcap loser (Adds details, context)

MOSCOW, Aug 18 (Reuters) - Evraz, one of Russia’s largest steel producers, reported a 38 percent fall in first-half core earnings on Thursday, hit by weaker steel prices and missing market forecasts.

The London-listed shares were down nearly 4 percent at 166.6 pence by 0800 GMT, making them the top midcap loser in the FTSE 250 Index , which was up 0.5 percent.

Along with its Russian rivals the company, part-owned by Chelsea soccer club owner Roman Abramovich, has been hit by low steel prices and depressed demand which outweighed the benefits of a weaker rouble.

Evraz said its earnings before interest, taxation, depreciation and amortisation (EBITDA) in the first six months of the year fell to $577 million from $932 million in the same period of 2015. Analysts polled by Reuters had on average expected a result of $593 million.

Net profit fell to $7 million from $19 million in the same period last year, while revenue fell 28 percent to $3.5 billion.

Evraz also said in a presentation it expected its capital spending this year would be in a range of $375-400 million, having previously said they would be less than $400 million.

The company did not provide its financial results for the second quarter but said they were stronger than in the first quarter due to higher steel prices, the trend it expects to continue in the rest of 2016.

“Global steel producers experienced a positive trend in pricing in the second quarter of 2016 driven by a combination of Chinese government investment stimulus, low inventory levels and speculative activity on futures markets,” it said.

In the second half of the year, Evraz expects steel prices in the Russian domestic market to gradually increase to the average level of 2015 without, however, any significant improvements in domestic demand.

In North America, where the Russian company has its own production, it said the market might be negatively affected by delays in approvals of large pipeline projects in the United States and Canada and by weak demand for rail track.

EVRAZ North America’s EBITDA fell by $10 million to $27 million in the first half. (Reporting by Polina Devitt; editing by Maria Kiselyova and Greg Mahlich)

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