Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the third quarter and the first nine months of 2012 according to International Financial Reporting Standards (IFRS).
In the third quarter, MMK reported a net profit of $82 million, compared to a net loss of $49 million in Q2 2012. In the given quarter, MMK's sales revenues decreased by 7.8 percent to $2.319 billion due to lower prices for products sold as a result of unfavourable conditions in world steel markets, while its operating profit amounted to $147 million, up 54.7 percent, both quarter on quarter. EBITDA in Q3 of the current year was $398 million, up 7.9 percent quarter on quarter. This was due mainly to EBITDA growth of seven percent in the Russian steel segment and growth in excess of five times in the coal segment.
In the first nine months of the current year, MMK registered a net profit of $47 million, compared to a net loss of $58 million in the January-September period of 2011. In the first nine months of the year, MMK's sales revenues amounted to $7.26 billion, up 2.8 percent, while its operating profit decreased by 33.3 percent to $275 million, both year on year.
In the third quarter, MMK Group's crude steel production increased by two percent quarter on quarter to 3.4 million mt. During the third quarter, MMK Russia produced 2.858 million mt of finished steel, up three percent quarter on quarter driven by higher production volumes of long products, flat cold rolled products and galvanized steel, while the finished steel output of MMK's Turkish subsidiary MMK Metalurji amounted to 211,000 mt, down from 284,000 mt in the second quarter of 2012.
In the January-September period, the crude steel production of the group amounted to 10.068 million mt, up 11 percent year on year. During the same period, MMK Russia produced 8.4 million mt of finished steel, up five percent, while the finished steel output of MMK Metalurji increased by 2.7 times to 748,000 mt, both year on year.
According to the company statement, MMK Group expects volumes of finished steel products in the fourth quarter of this year to be affected by the seasonal slowdown in business activity in the domestic market. The company does not expect a recovery in prices sooner than early 2013 with the beginning of the construction season and inventory restocking.