The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksMMK.L Regulatory News (MMK)

  • There is currently no data for MMK

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

MMK Q1 2009 IAS Results

11 Jun 2009 07:00

RNS Number : 7270T
OJSC Magnitogorsk Iron &Steel Works
11 June 2009
 



June 11, 2009

OJSC «Magnitogorsk Iron and Steel works» (OJSC «ММК») 

announces its consolidated financial results according to IAS for Q1 2009 ending March 31, 2009

SUBSTANTIAL GROWTH OF PROFITABILITY oN THE BACKGROUND OF Production increase

Production of crude steel and commercial products in Q1 2009 grew by 26% and 24% accordingly

The Company achieved positive EBITDA in the beginning of 2009

EBITDA margin of the parent company (OJSC "MMK") equaled to 19.4% in Q1 2009

MMK steel segment is the most efficient in the Russian steel industry

MMK successfully implements cost-reduction programme - MMK enjoys the lowest cash-cost among Russian peers 

The Company focuses on high value added products output; slabs are not marketed

MMK has the largest share of revenue generated on the profitable domestic market among Russian peers

Key financial HIGHLIGHTS OF THE PARENT COMPANY - ojsc «ммк» (USD million) 

 

Q4  2008

Q1 2009

+/-

Sales of OJSC «ММК» 

1 041

824

-217

EBITDA of OJSC «ММК»

-429

160

589

EBITDA margin

-

19,4%

-

Profit for the period of OJSC «ММК»

-445

-55

390

Sales of the parent company in Q1 2009 went down by 21% due to change of USD exchange rate

EBITDA became positive and equaled to USD 160m which is USD 589m higher compared to Q4 2008

EBITDA margin equaled to 19.4%

Loss for the period amounted to USD 55m which is USD 390m less compared to Q4 2008

impact of the Group 

Consolidated financial results for Q1 2009 were affected by factual and expected losses of other companies of the group.

key consolidated income statement highlights of MMK group (USD million) 

 

Q4 2008

Q1 2009

+/-

Sales of MMK Group

1 368

965

- 403

EBITDA *

-469

99

568

EBITDA margin of MMK Group

-34,3%

10,3%

-

Profit for the period of ММК Group

-402

-110

292

* EBITDA calculationsoperating income share in results of associates depreciation - impairment of investments in associates Loss on disposal of fixed assets

Sales reduction for Q1 2009 was caused by the fluctuation of USD exchange rate

EBITDA became positive and equaled to USD 99m which is USD 568m higher compared to Q4 2008

MMK Group EBITDA margin equaled to 10.3%

Loss for the period was USD 110m which is USD 292m less compared to Q4 2008

key Q1 2009 production highlights (thousand tonnes)

 

Q4 2008

Q1 2009

+/-

Crude steel 

1 648

2 070

26%

Commercial products

1 542

1 917

24%

Crude steel production in Q1 2009 grew by 26% in comparison with Q4 2008 figure

Production of commercial products in Q1 2009 increased by 24% compared to Q4 2008

Production capacity in Q1 2009 (compared to the average capacity during the first 9 months of 2008) grew from 49% in Q4 2008 to 61%

OVERVIEW OF THE Q1 2009 OPERATING RESULTS: MANAGEMENT COMMENTS 

High revenue and cash flow levels

The Company managed to achieve high sales amount for Q1 2009. This was possible due to production volumes growth in the reporting period. Reduction of sales in comparison with Q4 2008 figure was caused by the change of USD exchange rate. 

The company continues to generate a positive cash-flow.

MMK retains leadership in Russia 

The domestic market remains the priority for ММК. It provides an acceptable level of profitabilityGlobally, MMK focuses on meeting the demand of fast growing markets, including the South East Asia and Middle East markets

The volume of domestic sales amounted to 1.1m tonsor 58% of the total sales in Q1 2009. In money terms shipments to Russia and CIS accounted for 65% of Group revenue which is the highest level in the Russian steel sector.

Conservative financial policy keeps on yielding good results 

The Company's balance sheet is one of the strongest in the sector. The debt level of MMK Group is the lowest among the largest Russian peers: total debt stands at USD 1.694bnnet debt at USD 775m. The Debt/Equity ratio as of March 31, 2009 was x0.2.

Revolving credit facilities of traders affiliated with MMK for financing steel shipments account for about 25of the short-term debt.

The amount of cash and cash equivalents iUSD 907m. The decrease from the Q4 2008 level is caused by growth of USD exchange rate.

It is worth mentioning that the strengthening of USD exchange rate throughout the first quarter of 2009 has significantly influenced all balance sheet items (for the purpose of IAS reporting functional currency (RUR) is converted to reporting currency (USD)).

Change of assets value in Q1 2009 also occurred due to change of USD exchange rate. At the same time, the Company acquired fixed assets (including objects of financial leasing) for the sum of USD 401m in the reporting period.

Dividend payments 

Annual General Shareholders' Meeting took place on May 22, 2009. The shareholders took the decision not to pay out final dividends for 2008. Interim dividends for 2008 were set at the rate of 0,382 RUR per ordinary share. MMK obligations to pay dividends to the minority shareholders were fulfilled. 

The Company keeps on implementing its crisis management programme aimed at increasing liquidity and maintaining profitability. The positive effect of the actions taken in Q1 2009 allows us to expect stable operations in 2009.

* * *

Financial statement for Q1 2009 results under IAS is to be found at: http://www.mmk.ru/eng/invrelations/b_reports/index.wbp

The presentation of the Q1 2009 results under IAS is to be found at: http://www.mmk.ru/eng/invrelations/presentations/index.wbp

Information on MMK:

The Magnitogorsk Iron and Steel Works OJSC (MMK) is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The Company is a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of value added goods. In 2008 the Company produced 12m tonnes of crude steel and 11m tonnes of commercial products. MMK Group sales stood at USD 10.550bln.

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
QRFFBMITMMIBMRL
Date   Source Headline
13th Mar 20087:00 amRNSAcquisition
11th Mar 20089:13 amRNSNotice of Results
27th Feb 200810:12 amRNSDividend payout 1H2007
15th Feb 20088:29 amRNSresults of board meeting
5th Feb 20088:49 amRNSAcquisition
23rd Jan 200810:35 amRNSResult of EGM
17th Jan 200811:32 amRNSQ4 & Y2007 operational result
9th Jan 200812:32 pmRNSDividend payment
27th Dec 20077:00 amRNSAmendment to Assn
18th Dec 20079:59 amRNSResults of the Board Meeting
5th Dec 200710:32 amRNSCancels Treasury Shares
4th Dec 20077:51 amRNS3rd Quarter Results
28th Nov 200712:13 pmRNSNotice of Results
17th Oct 200710:32 amRNS3rd Qtr Production Results
4th Oct 200710:11 amRNSAcquisition
3rd Sep 20079:53 amRNSInterim Results
31st Aug 20078:34 amRNSResult of EGM
28th Aug 20077:00 amRNSNotice of Results
15th Aug 200711:14 amRNSAcquisition - Replacement
15th Aug 200710:41 amRNSAcquisition
10th Aug 200710:43 amRNSAcquisition
3rd Aug 20078:11 amRNSAcquisition
31st Jul 20078:09 amRNSNotice of EGM
16th Jul 20071:29 pmRNSStatement re conference call
13th Jul 20079:36 amRNSNotice of EGM
12th Jul 20071:14 pmRNSTrading update for H1 2007
20th Jun 20077:00 amRNS1st Quarter Results
11th Jun 20077:00 amRNSHolding(s) in Company
31st May 20075:09 pmRNSStabilisation Notice
29th May 20079:49 amRNSReorganization of CJSC RFZ
29th May 20077:00 amRNSDividend payment
25th May 200711:39 amRNSOver-allotment option
23rd May 200712:22 pmRNSRe Agreement

Due to London Stock Exchange licensing terms, we stipulate that you must be a private investor. We apologise for the inconvenience.

To access our Live RNS you must confirm you are a private investor by using the button below.

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.