MMK | 16 April 2008 г. | 16:33

MMK Announces Operational Trading Update Q1 2008 Results under Russian Accounting Standards

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 14% to 3.6m tons compared to 1Q07
· Commercial steel products output increased 12% to 3.3 m tons (1Q2008 to 1Q2007)
· A rise in product prices across the board compared to the end of 2007, including 22% for flat rolled products and 23% 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’s Board of Directors said:
“In the first quarter of 2008 we have shown strong positive financial and operational results. These achievements were a result of the company’s focus on high value added products, our strong position in the growing domestic market and continuing significant investments in advanced technology and equipment.
Already this year we have made further significant steps toward resource self-sufficiency through our strategic partnership with coal producer Belon and the development of Prioskolsky iron ore deposit. Against a background of record steel prices and with a strong outlook for the demand for our products in domestic and export markets, we look forward with confidence to the year ahead."
 
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 products output
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 tons
Finished products output, including:
3 287
3 106
180
3 287
2 930
357
Slabs and billets
431
388
42
431
135
296
Long products
485
404
81
485
456
29
Flat hot-rolled products
1 612
1 548
65
1 612
1 649
-37
Flat cold-rolled products
411
409
2
411
330
80
Downstream products
 
 
 
 
 
 
Tin plate
62
52
9
62
55
6
Galvanized steel
106
109
-3
106
106
0
Galvanizedcolour-coatedsteel
42
42
0
42
45
-3
Band
82
83
-1
82
82
0
Formed section
39
54
-15
39
52
-13
Pipes
18
18
1
18
19
-1
  In 1Q2008 MMK produced 3,598 thousand tons of steel and 3,287 thousand tons of commercial 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 making capacities. Long products output also grew by 81 thousand tons on the background of increased demand in 1Q2008 compared to the end of the previous year. Scheduled revamping of production facilities in the end of 2007 boosted hot-rolling and cold-rolling capacities. Production of tin plate and galvanized steel followed the demand curve for these product types.
  2. Average prices (FCA)
  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.
 
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-rolled products
603
570
5,8%
603
494
22,1%
Flat cold-rolled products
626
612
2,3%
626
560
11,6%
Downstream products
 
 
 
 
 
 
Tin plate
906
857
5,6%
906
812
11,5%
Galvanized steel
894
896
-0,3%
894
909
-1,7%
Galvanizedcolour-coatedsteel
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 in the beginning of 2008 is conditioned mostly be strengthening selling prices in all the markets of MMK. It is also because of geographical sales shift with bias towards domestic market which historically enjoys higher prices.
Slight decrease of galvanized steel average price in 1Q2008 compared to 4Q2007 is due to seasonal slow down in construction during this period.
 
Source: Metal Supply and Sales
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