Russian steel producer Magnitogorsk Iron and Steel Works (MMK) has announced its financial results for the fourth quarter and the full year of 2020.
In the fourth quarter, MMK registered a net profit of $313 million, up 206.9 percent compared to the previous quarter, mainly due to higher margins and foreign exchange gains. Besides, the company’s revenue increased by 18.3 percent quarter on quarter to $1.85 billion due to growth in sales volumes and the rise in steel prices in Russia and globally.
In the given quarter, MMK’s EBITDA rose by 35.4 percent quarter on quarter to $474 million, driven by higher margins resulting from stronger sales and steel prices trending upwards in key sales markets. In the meantime, the EBITDA margin increased to 25.6 percent, from 22.4 percent in the previous quarter.
In 2020, MMK’s net profit declined by 29.4 percent year on year to $604 million, mainly due to worsening market conditions amid the coronavirus. MMK’s EBITDA in 2020 decreased by 17.0 percent year on year to $1.49 billion, with the EBITDA margin falling to 23.3 percent. In the given year, the company’s revenue declined by 15.5 percent year on year to $6.39 billion, due to the scheduled reconstruction of hot rolling mill 2500.
The company’s Turkey-based subsidiary MMK Metalurji’s revenue in the fourth quarter increased by 20.4 percent compared to the previous quarter to $165 million, reflecting stronger demand from Turkish and European consumers amid a rise in global steel prices. Its revenue in 2020 declined by 0.4 percent year on year to $518 million.
As for the future outlook, MMK expects that the stable demand in the domestic and international markets will support sales. The major increase in metallurgical raw material prices and positive dynamics of global prices for steel products will support the growth of prices for MMK Group’s steel products in the first quarter of 2021. Operational excellence initiatives under the updated strategic initiatives will further boost the group’s profitability in the first quarter of 2021.