On June 24, Russia's third largest steelmaker Magnitogorsk Iron and Steel Works (MMK) announced its consolidated financial results for the first quarter of 2011 according to International Financial Reporting Standards (IFRS).
Net profit of the company increased to $134 million, representing a 42.5 percent increase as compared to the previous quarter thanks to higher output and prices. While the first quarter sales amounted to $ 2.216 million, up 14 percent as compared to the previous quarter, sales growth was driven by an eight percent rise in production volumes, as well as by increased selling prices.
MMK's primary investment projects due for completion are the MMK plant in Turkey and its mill 2000 in Magnitogorsk, which is designed to produce high-quality automotive cold rolled steel. Total capital expenditures for 2011 are expected to decrease to $1.2 billion.
Apart from production, MMK's export shipments increased 40 percent in the first quarter to 809,000 mt. The Middle East and Europe continue to be the largest export markets for MMK.
MMK also announced its expectations for the Russian steel market and the company itself. It expects Russian steel consumption to grow by 10 percent year on year in the current year, mostly driven by pipe-makers and machinery builders. While MMK Group's steel product output is predicted to increase by 10-15 percent in 2011, MMK's production growth will primarily come from the improvements in its Turkey operations and increased capacity utilization in Russia.