Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the first quarter of 2019.
In the first quarter, MMK registered a net profit of $225 million, down 19.4 percent compared to the same quarter of the previous year, while the company's revenues decreased by 10.7 percent year on year to $1.84 billion, due to the decline in sales of finished products against the backdrop of a correction in average sales prices. In the first quarter, MMK's EBITDA decreased by 21.4 percent to $440 million, with the EBITDA margin falling to 24 percent from the EBITDA margin of 27.3 percent in the first quarter of 2018.
At the moment, MMK sees that seasonal demand for metal in the domestic market is starting to recover. This should positively influence capacity utilization rates of key production units and the sales volumes for finished products, as well as help to decrease the impact of productivity restrictions linked to the reconstruction of hot rolling Mill 2500.
According to the company, the recovery in steel prices from the minimum levels at the beginning of the year, sales of warehouse stocks of long-term storage products, and a maximum capacity utilization rate for high-margin production units (including thick plate Mill 5000) should support the financial performance in the second quarter.