Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the third quarter and the first nine months of this year.
In the third quarter, MMK registered a net profit of $819 million, down by 20.6 percent compared to the second quarter, amid lower margins. The company’s revenue decreased by 6.9 percent quarter on quarter to $3.03 billion, reflecting a decline in sales volumes partially offset by higher global steel prices.
In the given quarter, MMK’s EBITDA fell by 19.4 percent quarter on quarter to $1.15 billion, amid lower revenue and the impact of export duties, while its EBITDA margin decreased to 38.2 percent, from 44.1 percent in the second quarter this year.
In the first nine months of the current year MMK’s net profit increased to $2.32 billion, compared to $291 million in the same period last year. The company’s revenue increased by 86.5 percent year on year to $8.47 billion, reflecting higher sales due to the completion of hot rolling mill 2500’s modernization. MMK’s EBITDA in the January-September period of the current year was at $3.31 billion, more than triple year on year, due to revenue growth, while its EBITDA margin increased to 39.2 percent, from 22.4 percent in the first nine months last year.
The revenue of the company’s Turkey-based subsidiary MMK Metalurji in the third quarter increased by 39.8 percent year on year to $330 million, reflecting higher steel prices. The subsidiary’s revenue in the first nine months increased to $732 million, more than double year on year, due to higher sales volumes and a favorable market environment.
According to MMK, a contraction in the global market coupled with the seasonal business slowdown in Russia will exert pressure on the company’s sales in the fourth quarter. However, the increase in output by the Turkish asset will support sales. Operational excellence measures implemented under MMK’s updated strategic initiatives will further boost the company’s profitability in the fourth quarter this year.
