15 Jul 2008 09:34
July 15, 2008
MMK Announces Operational Trading Update
and H1 2008 Results under Russian Accounting Standards
Key Financial Highlights
Key Operational Highlights
Commenting on the results, Victor Rashnikov, Chairman of MMK's Board of Directors said:
"We are satisfied with our achievements for the first half of 2008. We continue to consistently strengthen our presence in the Russian market. It is the markets of Russia and CIS with which we connect our ambitious plans, reflected in our large-scale investment programme.
The current level of steel prices within Russia and globally confirms optimistic expectations for the year.
We are continuing to follow our strategy of securing raw material supplies through new and ongoing projects, including the development of our own iron ore base and the Prioskol iron ore deposit and expansion of our partnership with Belon."
Consolidated accounts for the first 6 months of 2008 under US GAAP will be published on the week of 18 August 2008.
¹ Net of long-term investments revaluation.
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 Cattell, Peter Russell, Sophia Matveeva +44 207 251 3801
APPENDIX
1. Production
Major products output
| Q2 2008 | Q1 2008 | change | H1 2008 | H1 2007 | change | |
| '000 tons | '000 tons | % | '000 tons | '000 tons | % | |
| Cast iron | 2 448 | 2 613 | -6,3% | 5 060 | 4 652 | 8,8% |
| Crude steel | 3 418 | 3 598 | -5,0% | 7 015 | 6 476 | 8,3% |
| Commercial products output | 3 147 | 3 287 | -4,2% | 6 434 | 5 951 | 8,1% |
| Q2 2008 | Q1 2008 | change | H1 2008 | H1 2007 | change | |
| '000 tons | '000 tons | % | '000 tons | '000 tons | % | |
| Finished products output, including: | 3 147 | 3 287 | -140 | 6 434 | 5 951 | 483 |
| Slabs and billets | 248 | 431 | -183 | 679 | 266 | 412 |
| Long products | 451 | 485 | -34 | 936 | 935 | 1 |
| Flat hot-rolled products | 1 651 | 1 598 | 53 | 3 250 | 3 259 | -9 |
| Flat cold-rolled products | 436 | 424 | 12 | 861 | 758 | 103 |
| Downstream products |
|
|
|
|
| |
| Tin plate | 58 | 62 | -4 | 119 | 125 | -6 |
| Galvanized steel | 107 | 106 | 1 | 213 | 208 | 5 |
| Galvanized colour-coated steel | 44 | 42 | 3 | 86 | 91 | -5 |
| Band | 84 | 82 | 2 | 166 | 168 | -2 |
| Formed section | 51 | 39 | 12 | 90 | 102 | -13 |
| Pipes | 17 | 18 | -1 | 35 | 38 | -3 |
In 2Q2008 MMK produced 3,418 thousand tons of steel and 3,147 thousand tons of metal products. Minor changes to volume output are accounted for by the commencement/completion of planned repairs and maintenance works in these periods.
Domestic sales share (in tonnage) grew to 69% in 2Q2008.
Crude steel and metal products output in 1H2008 grew by 8% against 1H2007 and amounted to 7,015 and 6,434 thousand tons correspondingly. The increment totaled 483 thousand tons with domestic sales growing by 429 thousand tons, driving the domestic sales share to 66%.
2. Average prices
The prices are indicative and do not consider either steel grade and quality characteristics or sales markets. Average prices calculation is based on division of revenue by volume.
| Q2 2008 | Q1 2008 | change | H1 2008 | H1 2007 | change | |
| '000 tons | '000 tons | % | '000 tons | '000 tons | % | |
| Slabs and billets | 779 | 529 | 47,2% | 621 | 390 | 59,1% |
| Long products | 911 | 627 | 45,3% | 762 | 563 | 35,4% |
| Flat hot-rolled products | 876 | 599 | 46,3% | 738 | 535 | 37,9% |
| Flat cold-rolled products | 903 | 642 | 40,7% | 773 | 590 | 31,0% |
| Downstream products |
|
|
|
|
|
|
| Tin plate | 1 171 | 906 | 29,3% | 1 033 | 837 | 23,3% |
| Galvanized steel | 1 108 | 894 | 23,9% | 1 000 | 935 | 7,0% |
| Galvanized colour-coated steel | 1 451 | 1 218 | 19,1% | 1 335 | 1 210 | 10,3% |
| Band | 976 | 715 | 36,4% | 845 | 656 | 28,8% |
| Formed section | 1 038 | 823 | 26,1% | 942 | 735 | 28,2% |
| Pipes | 1 010 | 735 | 37,4% | 868 | 739 | 17,6% |
In H1 2008 international markets saw significant price increases for metal products across the globe which lead to setting new steel price levels. Following the global steel price increases we saw rising prices for products intended for the domestic market.
Increase of MMK average price levels in 2008 compared to 2007 is conditioned by this global trend and price increases in all the sales markets of the company. The average price increase for major MMK products varied from 20% to 40% in 2Q2008 and amounted to at least USD 250 per ton increase.