The Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the second quarter of 2009 under Russian Accounting Standards (RAS).
Accordingly, in Q2 2009 MMK's revenue remained at the Q1 level amounting to Ruble 28 billion (approx. $890.6 million), its operating income went up by Ruble 333 million ($10.6 million) to Ruble 4.7 billion (approx. $149.5 million), while its net income increased by Ruble 4.9 billion ($155.85 million), i.e. 127 percent, to Ruble 8.8 billion (approx. $279.9 million), all compared to Q1 2009.
MMK attributes the growth in its Q2 net income to the operating income increase caused by a 3.2 percent decrease of production costs per one metric ton of steel products, and to the increased results of financial investment revaluation compared to Q1 2009 caused by the growth of market prices for securities of Russian and foreign entities in possession of MMK.
As of June 30, 2009, MMK's cash amounted to Ruble 8.7 billion (approx. $267.7 million), its long-term liabilities increased by 81 percent compared to the figure at the start of this year to Ruble 34.6 billion (approx. $1.1 billion), as the result of the company's implementation of its long-term investment program. Meanwhile, the company's short-term liabilities went down by 51 percent to Ruble 21.7 billion (approx. $690.2 million) due to decrease of payables and repayment of credits.
"The company's actions were aimed at supporting the low level of cash cost and at optimizing the structure of the production portfolio. As a result, neither commercial billets nor slabs were produced," stated MMK in its report. The share of MMK's downstream products in Q2 2009 grew by four percent to Q1 2009 and amounted to15 percent of its overall product output.
MMK's share of domestic sales in Q2 stood at 55 percent, with its domestic sales accounting for 67 percent of its total sales of steel products.
As SteelOrbis previously reported, in Q2 2009 MMK increased its crude steel output by four percent quarter on quarter to 2.2 million mt, and its finished steel products output by 2,000 mt to 1.9 million mt.
$1= Ruble 31.44