The Russian
steelmaking group Magnitogorsk Iron and Steel Works (
MMK) has announced that in 2010 it registered a six percent rise in its profit to $232 million under the International Financial Reporting Standards (IFRS).
Accordingly, in 2010,
MMK's EBITDA went up by 23 percent year on year to $1.606 billion, while its EBITDA margin was 21 percent (in 2009 it stood at 26 percent).
MMK said that in 2010 it managed to increase its sales by 52 percent year on year to $7.719 billion, driven by an 18 percent increase in steel production to 10.4 million mt , as well as by mastering new product types and due to increased demand from
MMK's clients in the domestic market.
MMK's average steel product price for 2010 stood at $627/mt, which is 32 percent higher year on year due to the increased share of higher value-added (HVA) steel products, which reached 38 percent in 2010, up from 31 percent in 2009.
The major clients of
MMK in the domestic market remain pipe-makers, machinery building and car-making companies, which altogether accounted for 53 percent of domestic shipments in 2010. High demand coming from these industries enabled
MMK to boost sales in
Russia in 2010.
MMK's total capital expenditure in 2010 reached a record $2.209 billion, up 37 percent compared to the 2009 capital expenditure of $1.613 billion. The
investments targeted completion of the construction of the
MMK plant in Turkey and the mill 2000 in Magnitogorsk, aimed at production of high quality automotive cold rolled steel. The projects are intended to contribute to the strategy of
MMK to increase production of HVA products and substitute imports in the markets of
Russia and Turkey. The abovementioned projects are in their completion phase, so capital expenditure is expected to decrease to $1.2 billion in 2011.
As of the end of 2010,
MMK's total debt amounted to $3.548 billion.