MMK.L Regulatory News (MMK)

15 Apr 2008 09:47

OJSC Magnitogorsk Iron &Steel Works15 April 2008 15 April 2008 MMK Announces Operational Trading Update Q1 2008 Results under Russian Accounting Standards Key Financial Highlights • Revenue increased by 21% to RUR 52,3 bln (RUR 43,1 bln in 1Q2007) • Operating income on the level of RUR 11,6 bln (RUR 11,7 bln in 1Q2007) • Net income (net of the effect of financial investments revaluation) grew by 2% to RUR 8,5 bln (RUR 8,4 bln in 1Q2007) Key Operational Highlights • Crude steel production up 8% to 3.6m tons compared to 4Q07 • Commercial steel products output increased 6% to 3.3 m tons (1Q2008 to 4Q2007) • A rise in product prices across the board compared to the end of 2007, including 6% for flat rolled products and 4% for long products • Domestic demand and global industry dynamics to drive further price increases in Q2 Commenting on the first quarter results, Victor Rashnikov, Chairman of MMK'sBoard of Directors said: "In the first quarter of 2008 we have shown strong positive financial andoperational results. These achievements were a result of the company's focus onhigh value added products, our strong position in the growing domestic marketand continuing significant investments in advanced technology and equipment. Already this year we have made further significant steps toward resourceself-sufficiency through our strategic partnership with coal producer Belon andthe development of Prioskolsky iron ore deposit. Against a background of recordsteel prices and with a strong outlook for the demand for our products indomestic and export markets, we look forward with confidence to the year ahead." The 1 quarter 2008 results under Russian Accounting Standards (in Russian) areavailable at: http://www.mmk.ru/rus/shareholders/b_reports/r_reports/index.wbp.Presentation of the results (in Russian) is available here: http://www.mmk.ru/rus/shareholders/presentations/index.wbp APPENDIX 1. Production Major products output 1Q2008 4Q2007 change 1Q2008 1Q2007 change '000 tons '000 tons % '000 tons '000 tons %Cast iron 2 613 2 285 14,4% 2 613 2 298 13,7%Crude steel 3 598 3 327 8,1% 3 598 3 145 14,4%Commercial productsoutput 3 287 3 106 5,8% 3 287 2 930 12,2% 1Q2008 4Q2007 change 1Q2008 1Q2007 change '000 tons '000 tons '000 tons '000 tons '000 tons '000 tonsFinishedproductsoutput,including: 3 287 3 106 180 3 287 2 930 357Slabs andbillets 431 388 42 431 135 296Long products 485 404 81 485 456 29Flathot-rolledproducts 1 612 1 548 65 1 612 1 649 -37Flatcold-rolledproducts 411 409 2 411 330 80Downstream productsTin plate 62 52 9 62 55 6Galvanizedsteel 106 109 -3 106 106 0Galvanizedcolour-coatedsteel 42 42 0 42 45 -3Band 82 83 -1 82 82 0Formed section 39 54 -15 39 52 -13Pipes 18 18 1 18 19 -1 In 1Q2008 MMK produced 3,598 thousand tons of steel and 3,287 thousand tons ofcommercial steel products. Company continued increasing production volumes,having grown 8,1% in steel and 5,8% in commercial products compared to 4Q2007. Enhanced output of billets by 42 thousand tons is due to increases steel makingcapacities. Long products output also grew by 81 thousand tons on the backgroundof increased demand in 1Q2008 compared to the end of the previous year.Scheduled revamping of production facilities in the end of 2007 boostedhot-rolling and cold-rolling capacities. Production of tin plate and galvanizedsteel followed the demand curve for these product types. 2. Average prices (FCA) The prices are indicative and do not consider either steel grade and qualitycharacteristics or sales markets. Average prices calculation is based ondivision of revenue by volume. 1Q2008 4Q2007 change 1Q2008 1Q2007 change '000 tons '000 tons % '000 tons '000 tons %Slabs and billets 529 441 20,1% 529 349 51,6%Long products 627 603 3,9% 627 511 22,7%Flat hot-rolledproducts 603 570 5,8% 603 494 22,1%Flat cold-rolledproducts 626 612 2,3% 626 560 11,6%Downstream productsTin plate 906 857 5,6% 906 812 11,5%Galvanized steel 894 896 -0,3% 894 909 -1,7%Galvanizedcolour-coated steel 1 218 1 194 2,0% 1 218 1 167 4,3%Band 715 683 4,8% 715 614 16,5%Formed section 823 813 1,2% 823 706 16,6%Pipes 735 695 5,7% 735 687 7,0% Steel markets entered new growth phase in 2008. Increase of average prices inthe beginning of 2008 is conditioned mostly be strengthening selling prices inall the markets of MMK. It is also because of geographical sales shift with biastowards domestic market which historically enjoys higher prices. Slight decrease of galvanized steel average price in 1Q2008 compared to 4Q2007is due to seasonal slow down in construction during this period. About MMK The Magnitogorsk Iron and Steel Works OJSC (MMK) ranks 20th among the world'slargest steel producers (according to IISI) and is one of the leaders of Russia's steel industry (according to Chermet data). The Company is a large steelproducing complex encompassing the entire production chain, from preparation ofiron ore to downstream processing of rolled steel. MMK turns out a broad rangeof steel products with a predominant share of value added goods. In 2007 theCompany produced 13.3 m tonnes of crude steel, and 12.2 m tonnes of commercialproducts. US GAAP sales stood at USD 8.2 bn, with net income at USD 1.8 bn. Contacts MMK: Elena Azovsteva+7 3519 24 90 82 e-mail: azovtseva@mmk.ru Evgeny Kovtunov+7 3519 25 46 31 e-mail: kovtunov@mmk.ru Finsbury; Brian CattellPeter RussellSophia Matveeva+44 207 251 3801 This information is provided by RNS The company news service from the London Stock Exchange