Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the fourth quarter and the full year of 2021.
In the fourth quarter, MMK registered a net profit of $794 million, down by 3.1 percent compared to the third quarter. The company’s revenue increased by 12.1 percent quarter on quarter to $3.39 billion, reflecting an increase in sales volumes partially offset by a correction in global steel prices.
In the given quarter, MMK’s EBITDA fell by 15.9 percent quarter on quarter to $972 million, while its EBITDA margin decreased to 28.6 percent, from 38.2 percent in the third quarter last year.
In 2021, MMK’s net profit increased to $3.12 billion, compared to $604 million in the previous year, reflecting increased production volumes and sales efficiency. The company’s revenue increased by 85.6 percent year on year to $11.87 billion, reflecting higher sales due to the completion of hot rolling mill 2500’s modernization. MMK’s EBITDA in 2021 was at $4.29 billion, more than double year on year, due to stronger revenue, while its EBITDA margin increased to 36.1 percent, from 23.3 percent in 2020.
The revenue of the company’s Turkey-based subsidiary MMK Metalurji in the fourth quarter increased by 36.9 percent year on year to $452 million, reflecting higher sales amid the restart of hot rolled coil production. The subsidiary’s revenue in the full year increased to $1.18 billion, more than double year on year, due to stronger sales and a favorable global pricing environment.
According to MMK, higher steel output at the Turkish asset in the first quarter this year will have a positive impact on the company’s sales volumes, offsetting the costs of overhauling blast furnace and converter facilities in Magnitogorsk. Operational excellence measures implemented under MMK’s updated strategic initiatives will further boost the company’s profitability in the first quarter of 2022.