MMK’s revenues go up 25%

16 September 2010 (10:33)

Magnitogorsk Iron & Steel Works (ММК) carried a financial report for the second quarter of 2010; the report was drawn up in compliance with the International Accounting Standards.

MMK Group’s revenue in the second quarter of 2010 rose by 25%, or up to $2,068m against the first quarter of the year. The consolidated EBITDA went up by 17% and reached $437m.

‘Despite the dramatic increase in the raw materials prices in the second quarter and less favorable market opportunities, our EBITDA margin still looked good at 21.1% starting June 2010,’ the report states. As for the profits, they amounted to $122m without considering some one-off factors and $53 with these factors considered.

‘Thanks to our presence in the growing market segments and to the increased share of goods with high added value, the average price of MMK’s metal produce jumped by 15% in the second quarter of 2010 compared with the first quarter. At the same time, the prime cost of one ton of produce went up only slightly over the same period; what is more, the increase in prime cost occasioned by the raw materials price changes was compensated by the measures we took to reduce our outgoings,’ MMK reports.

The company’s debts are still among the smallest in the metallurgical field. MMK owed its creditors $2,880m at the end of the second quarter, whereas its cash assets and their equivalents totaled to $953m given the near-money investments.

What is more, the company’s metal goods output rose by 7% in the second quarter of 2010 against the first quarter of the year. MMK reports this output increase only has to do with the growing amount of high-value-added goods they make, which became possible due to the launch of some new facilities for manufacturing highly profitable products popular with the domestic buyers. In fact, the share of goods with high added value in the company’s total output went up from 30% in the first quarter of 2010 and 27% in the year 2009 to 35% in the second quarter of 2010.

Apart from this, MMK kept delivering increasingly more goods on the home market. The enterprise exported 2% more products in April-June 20101 compared with January-March 2010, while its share of domestic market shipments went up by as many as 9%.

OAO Belon, a member of MMK Group, brought the enterprise $140m in revenues and $70m in EBITDA in the second quarter of 2010, which means the company could boast a 50% margin.

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