Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the second quarter and the first half of 2012 according to International Financial Reporting Standards (IFRS).
In the second quarter, MMK reported a net loss of $49 million, compared to a net profit of $13 million in the corresponding quarter of 2011. In the given quarter, MMK's sales revenues increased by 4.1 percent to $2.5 billion, while its operating profit amounted to $95 million, down 41.7 percent, both year on year. Meanwhile, MMK's Turkish subsidiary MMK Metalurji posted a sales revenue of $235 million in the given quarter.
In the first six months of the current year, MMK registered a net loss of $35 million, compared to a net profit of $147 million in the first half of 2011. In the first half of the year, MMK's sales revenues amounted to $4.9 billion, up seven percent, while its operating profit decreased by 63 percent to $128 million, both year on year.
In the second quarter, MMK Group's crude steel production increased by 18 percent year on year to 3.3 million mt. During the second quarter, MMK Russia produced 2.77 million mt of finished steel, up 9.9 percent year on year, while the finished steel output of MMK's Turkish subsidiary MMK Metalurji amounted to 284,000 mt, up from 84,000 mt in the second quarter of 2011.
In the first half, the crude steel production of the group amounted to 6.71 million mt, up 14 percent year on year. During the same period, MMK Russia produced 5.54 million mt of finished steel, up six percent, while the finished steel output of MMK Metalurji increased by five times to 538,000 mt, both year on year.
According to the company statement, MMK Group expects output of finished steel products in the third quarter to remain at a similar level to the second quarter. Steel prices are forecast to increase slightly in the beginning of the fourth quarter, if the macroeconomic situation improves. Given higher demand for steel in Russia and globally as well as increased production volumes at MMK Metalurji, MMK Group expects to see a yearly growth in sales volumes of finished steel products in 2012.