Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the second quarter and first half of the current year according to International Financial Reporting Standards (IFRS).
In the second quarter, MMK registered a net profit of $272 million, up 38.8 percent compared to the first quarter of the year, while the company's revenues increased by 8.9 percent quarter-on-quarter to $1.64 billion, due to the strengthening of the Russian ruble and the increase in the average steel prices during the quarter, which compensated for the decreasing sales volume. In the second quarter, MMK's EBITDA increased by 4.9 percent to $493 million, with the EBITDA margin declining by 1.1 percentage points to 30 percent, compared to the first quarter.
In the first half of this year, the company’s net profit increased by 485 percent to $468 million, while its revenues decreased by 22.8 percent to $3.15 billion, primarily due to the decrease in the average steel price in US dollars, both year on year basis. In the same period, MMK’s EBITDA increased by 39 percent to $963 million, with the EBITDA margin rising by 13.6 percentage points to 30.5 percent, compared to the first half of 2014.
At the beginning of the third quarter, the company sees growth in demand for its products due to a delayed seasonal growth in demand for construction products, which indicates a potential increase in the third quarter sales. MMK said that its financial results in the third quarter will come under pressure from the loss of strength of the ruble versus the US dollar.