Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the third quarter and first nine months of the current year according to International Financial Reporting Standards (IFRS).
In the third quarter, MMK registered a net profit of $276 million, down 7.1 percent compared to the second quarter of the year, while the company's revenues increased by 4.5 percent quarter on quarter to $2.01 billion, due to an overall increase in sales volumes (amid stable US dollar prices for steel) and the recovery in domestic sales as a share of total sales. In the third quarter, MMK's EBITDA increased by 17.1 percent quarter on quarter to $533 million, with the EBITDA margin increasing from 23.6 percent in the second quarter to 26.5 percent.
Meanwhile, in the January-September period, the company’s net profit declined by 9.9 percent to $814 million, while its revenues rose by 37.2 percent to $5.59 billion, both on year-on-year basis. The increase in revenue was due to the increase in average sales prices and a stronger ruble rate. In the same period, MMK’s EBITDA decreased by four percent to $1.44 billion, with the EBITDA margin falling from 29 percent in the first nine months of the previous year to 25.7 percent.
MMK stated that currently it sees a seasonal weakening in domestic demand for steel, which should result in lower sales volumes in the fourth quarter of this year. With regard to financial performance, MMK expects higher average sales prices to partially compensate for lower sales volumes.