Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the third quarter and first nine months of the current year according to International Financial Reporting Standards (IFRS).
In the third quarter, MMK registered a net profit of $78 million, down 71.3 percent compared to the second quarter of the year, while the company's revenues decreased by 8.7 percent quarter on quarter to $1.5 billion, primarily due to the weakening of the rouble and the decrease in the average steel price during the quarter. In the third quarter, MMK's EBITDA decreased by 12.8 percent to $430 million, with the EBITDA margin declining from 30 percent in the second quarter to 28.6 percent.
Meanwhile, in the January-September period, the company’s net profit increased by 415.1 percent to $546 million, while its revenues decreased by 25.2 percent to $4.65 billion, both on year-on-year basis. The decline in revenue was primarily driven by lower sales volumes and the decrease in the average steel price in US dollars during the year. In the same period, MMK’s EBITDA increased by 14.7 percent to $1.39 billion, with the EBITDA margin rising from 19.5 percent in the first nine months of the previous year to 29.9 percent.
According to MMK, at the beginning of the fourth quarter the company has seen a seasonal weakening in demand for its products, which could affect sales volumes during the quarter. The company’s financial results in the fourth quarter will come under pressure from the continued decline in global steel prices.