Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the fourth quarter and the full year of 2017 according to International Financial Reporting Standards (IFRS).
In the fourth quarter, MMK registered a net profit of $375 million, rising by 35.9 percent from the third quarter of the year, mainly due to a significant growth in metal prices in both the company’s domestic and export markets. In the given quarter, the company's revenues decreased by 3.2 percent quarter on quarter to $1.94 billion, due to a seasonal decrease in domestic sales volumes. In the fourth quarter, MMK's EBITDA increased by 11.1 percent to $592 million, with the EBITDA margin rising from 26.5 percent in the third quarter to 30.4 percent.
Meanwhile, in 2017 the company recorded a net profit of $1.189 billion compared to a net profit of $1.11 billion in 2016, while its revenues moved up by 34 percent year on year to $7.54 billion, due to the increase in average sales prices (up $143/mt or 33.1 percent), recovery of the share of domestic sales, and a stronger ruble rate. In the same year, MMK’s EBITDA increased by 3.9 percent year on year to $2.03 billion, with the EBITDA margin decreasing from 29.1 percent in 2016 to 26.9 percent.
According to MMK, seasonality and scheduled equipment maintenance will affect sales volumes in the first quarter of the current year. At the same time, this should be balanced by higher prices in export and domestic markets.