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August 13, 2010

OJSC “Magnitogorsk Iron and Steel Works” (MMK) announces financial results under Russian Accounting Standards (RAS) for Q2 2010

The results reflect MMK (parent company) operations only and may vary significantly from the consolidated financial results under IAS.

- MMK RAS sales rose by 26% in Q2 2010 q-o-q and amounted to RUR53.117 bn.

- MMK net profit under RAS net revaluation of investment in securities increased by 24% in Q2 2010 to RUR4.678 bn.

- Share of HVA products grew in Q2 2010 from 30% to 35% q-o-q.

Key Q2 2010 operational highlights:

- Crude steel output amounted to 2.984 mln tons in Q2 2010 which is 252 th. tons or 9% higher compared to Q1 2010.

- Finished steel products output increased by 170 th. tons or 7% in Q2 2010 q-o-q and amounted to 2.623 mln tons.

- Steel output growth is driven by increasing output of HVA products - mainly owing to the increasing thick plate production at Plate Mill 5000 (production grew by 52 th. tons or 29% in Q2 2010 q-o-q).

- High value-added products output increased by 174 th. tons (or 24%) in Q2 2010, its share in finished products output grew from 30% to 35%.

- MMK average steel price grew by 15.1% in Q2 2010 q-o-q and amounted to USD647 per ton.

- Domestic shipments in Q2 2010 equaled to 1.712 mln tons to account for 71% of revenue.

- Share of MMK domestic shipments in volume terms grew from 64% in Q1 2010 to 65% in Q2 2010.

Key Q2 2010 financial highlights:

Key Profit & Loss statement figures for Q2 2010

RUR mln

Q2 2010

Q1 2010

+/-, %


53 117

42 143


Operating income

9 109

5 946


Net profit excluding revaluation of investment in securities

4 678

3 783


Revaluation of investment in securities

- 4 001

2 527


Net profit adjusted for revaluation of investment in securities


6 310


- Q2 2010 sales amounted to RUR53.117 bn which is 26% higher q-on-q. The increase is driven by growth of steel output and average steel price.

- Operating income amounted to RUR9.109 bn. Growth of 53% q-on-q is driven by   increased output and finished steel products sales in Q2 2010 and also by growth of average steel price for 1 ton exceeding costs inflation.

- MMK net profit was influenced significantly by the effect of revaluation of securities on company’s balance sheet. Net profit grew by RUR2.527 bn due to revaluation in Q1 2010, while in Q2 2010 revaluation of investment in securities led to net profit decrease of RUR4.001 bn. 

- Net profit excluding revaluation of investment in securities increased by 24% in Q2 2010 q-on-q.

Balance sheet as of July 1, 2010 (compared to balance sheet as of January 01, 2010)

Total assets amounted to RUR272.588 bn, which is 12% higher compared to Jan 1, 2010. The increase of assets value in the amount of RUR29.219 bn took place mainly in non-current assets in terms of investment program realization (construction and acquisitions of fixed assets).




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