The Russian firm, whose biggest shareholder is Chelsea FC owner Roman Abramovich, blamed currency issues in part for the hit on profits, which was more than double than the $551m loss posted in 2013.
Revenue also tumbled, down nine per cent from $14.4m to $13.1m, which the company attributed to a decline in revenue within its steel segment. This accounts for 72.9 per cent of total group revenue.
The group reduced its net debt by 11 per cent, to $5.8bn. It also brought capital expenditure down from $902m in 2013 to $654m, most of which the firm said was spent on sustaining current capacity with $221m used for projects aimed at either increasing production or decreasing costs.
Evraz said it expects global steel demand to continue to grow but cautioned that its pricing will remain volatile “largely driven by existing underutilisation of production capacity in selected markets”.
It warned that competition from Chinese producers in the international steel markets will grow as the country’s economic growth slowdown persists. The company said downward price pressure caused by increased Chinese steel exports and growing competition between major steel exporters would “offset some of the efficiency and cost reduction gains achieved by Evraz in 2014”.
Despite the declines shown in its results, Evraz’s shares were up by 5.22 per cent yesterday after the buyback was announced.
The company will offer 120,967,742 ordinary shares at a tender price of $3.10 per share, which represents a 10 per cent premium to the closing price on 31 March. According to Evraz, the board believes “the return of cash by means of the tender offer is in the best interests of the company’s shareholders as a whole”.