Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the fourth quarter and the full year of 2015 according to International Financial Reporting Standards (IFRS).
In the fourth quarter, MMK registered a net loss of $125 million, compared to a net profit of $78 million in the third quarter of the year, while the company's revenues decreased by 21.4 percent quarter on quarter to $1.18 billion, primarily due to the seasonal decline in domestic sales and a decrease in the average steel price during the quarter. In the fourth quarter, MMK's EBITDA decreased by 36 percent to $275 million, with the EBITDA margin declining from 28.6 percent in the third quarter to 23.3 percent.
Meanwhile, in 2015 the company recorded a net profit of $421 million compared to a net loss of $44 million in 2014, while its revenues decreased by 26.6 percent year on to $5.8 billion. The decline in revenue was primarily driven by lower sales volumes (down eight percent year on year) due to a decline in domestic demand for steel (down 12 percent year on year) and an increase in intra-group turnover. In the same year, MMK’s EBITDA increased by 3.8 percent year on year to $1.66 billion, with the EBITDA margin rising from 20.2 percent in 2014 to 28.6 percent.
According to MMK, in 2016 the Russian metals industry will remain under pressure from low capacity utilization globally, an increase in exports from China, growing protectionism in export markets and weak domestic demand.