The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results under the Russian Accounting Standards (RAS).
Accordingly, in Q1 2009 MMK's revenue increased by 2.2 percent to Ruble 28.3 billion (approx. $828 million), while its operating income went up by almost 50 percent to Ruble 6.6 billion (approx. $193.15 million), both compared to the company's Q4 2008 RAS results.
Meanwhile, the company's net income increased to Ruble 3.9 billion (approx. $114.13 million). MMK attributes the growth in its income to the operating income increase caused by the nine percent rise of sales volume in cash terms and by the 18 percent decrease in production cost per one mt of steel products. The increased results of financial investment revaluation, due to the market price growth of Russian and foreign securities in possession of MMK, against such revaluation for Q4 2008 which resulted in losses, and the price markdown for raw material stock in Q4 2008, also contributed to the increase in the company's net income.
According to the company's release, the growth in MMK's Q1 2009 financial results was due to increased capacity utilization rates and output volumes. These were spurred by stronger demand for steel products, especially in the domestic market. External factors were also significantly supported by a strict financial policy based on the company's crisis management program, which allowed it to reduce costs, cut down payables and receivables, as well as to increase its available cash.
In the first quarter of 2009, MMK registered a 25.6 percent increase in its crude steel production to 2.1 million mt, and a 24.3 percent rise in its finished steel output to 1.9 million mt, both compared to Q4 2008.