Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the fourth quarter and the full year of 2018.
In the fourth quarter, MMK registered a net profit of $245 million, down 38.9 percent compared to the third quarter of the year, while the company's revenues decreased by 6.2 percent quarter on quarter to $2 billion, due to the fall in the average sale price of finished products against a backdrop of a seasonal decrease in sales of steel products. In the fourth quarter, MMK's EBITDA decreased by 20 percent to $537 million, with the EBITDA margin falling to 27.4 percent from the EBITDA margin of 32.1 percent in the previous quarter.
Meanwhile, in 2018, the company’s net profit increased by 10.8 percent to $1.3 billion, while its revenues rose by 8.9 percent to $8.2 billion, due to higher sales volumes on the back of increased average sales prices. In the same year, MMK’s EBITDA went up by 19 percent to $2.42 billion, with an EBITDA margin of 29.4 percent compared to the 26.9 percent recorded in 2017.
MMK stated that, at the moment, despite the seasonal decline in business activity in the domestic market, the company sees sufficient demand to maintain high capacity utilization at its production facilities. In general, the company expects that in 2019 its high capacity utilization will be supported by a high global steel consumption. Furthmore, MMK expects its financial results for the first quarter of 2019 to be affected by high iron ore prices. This negative factor should be offset by the start of the seasonal recovery in steel prices, as well as high capacity utilization at the facilities producing high-margin products.