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 $417 million, up 26.7 percent compared to the second quarter of the year, while the company's revenues decreased by 4.8 percent quarter on quarter to $1.47 billion, due to lower sales and changes in sales structure. In the third quarter, MMK's EBITDA increased by 16.6 percent quarter on quarter to $653 million, with the EBITDA margin increasing from 36.1 percent in the second quarter to 44.2 percent.
Meanwhile, in the January-September period, the company’s net profit increased by 65.4 percent to $903 million, while its revenues decreased by 12.4 percent to $4.08 billion, both on year-on-year basis. The decline in revenue was due to lower sales prices. In the same period, MMK’s EBITDA increased by 7.7 percent to $1.5 billion, with the EBITDA margin rising from 29.9 percent in the first nine months of the previous year to 36.8 percent.
MMK stated that it sees good demand from the domestic market (taking seasonality into account) in October and November this year and therefore it does not expect a significant decline in sales volumes. The financial performance of the company in the fourth quarter this year is expected to come under pressure from speculative growth in prices for coking coal and seasonal growth in prices for scrap. However, the company’s management believes that high prices for raw materials will support global steel prices in the fourth quarter.