The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the first quarter of 2010 under Russian Accounting Standards (RAS). The results reflect MMK (parent company) operations only and may vary significantly from the consolidated financial results under International Accounting Standards (IAS).
Accordingly, in Q1 2010, due to the growth of sale volumes and average steel prices, MMK's revenue increased by six percent to Ruble 42.143 billion (about $1.44 billion). Meanwhile, MMK's operating income went down by 27 percent to Ruble 5.946 billion (about $203 million), due to the increases in natural monopoly tariffs, coal prices and base wage rate indexation at the beginning of the year, while its net profit decreased by 15 percent to Ruble 6.31 billion (about $215 million), all compared to Q4 2009.
In Q1, the share of MMK shipments directed to the domestic market rose from 57 percent to 64 percent quarter on quarter, accounting for 71 percent of MMK's total revenues from its steel product sales. The company's average steel price (in ruble) grew by three percent in Q1 2010 compared to Q4 2009.
As SteelOrbis previously reported, in the first quarter of 2010 MMK produced 2.732 million mt of crude steel - up seven percent quarter on quarter, while its finished steel product output amounted to 2.453 million mt - up five percent quarter on quarter. The output growth was due to the increased production of thick plate at MMK's plate mill 5000 and to the increased production of downstream products.
$1 = Ruble 29.3