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MarketScreener Homepage  >  Equities  >  Moscow Micex - RTS  >  Magnitogorsk Iron & Steel Works    MAGN   RU0009084396

MAGNITOGORSK IRON & STEEL WORKS

(MAGN)
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Magnitogorsk Iron & Steel Works : MMK Group financial results for Q1 2020

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04/30/2020 | 09:58am EDT

PJSC Magnitogorsk Iron & Steel Works' ('MMK', or 'the Group') (MICEX-RTS: MAGN; LSE: MMK), one of the world's largest steel producers, announces its financial results for Q1 2020.

GROUP KEY FINANCIAL INDICATORS FOR Q1 2020 IN COMPARISON TO Q4 2019

MMK Group's revenue slightly declined by 0.7% quarter-on-quarter (q-o-q) and amounted to $1,710 mln due to a decline in sales volumes amid the scheduled reconstruction of hot-rolling Mill 2500.

EBITDA increased 31.9% q-o-q and amounted to $442 mln, mainly due to higher prices for metal products. EBITDA margin increased by 6.3 p.p. to 25.8%.

Net profit for Q1 2020 amounted to $131 mln, up 48.6% q-o-q amid rouble devaluation at the end of Q1 2020.

Free cash flow (FCF) amounted to $110 mln, down 59.6% q-o-q, due to working capital build up as a result of low base effect at the end of 2019.

GROUP KEY FINANCIAL INDICATORS FOR Q1 2020 IN COMPARISON Q1 2019

MMK Group's revenue declined by 6.9% year-on-year (y-o-y) due to a decline in sales volumes amid correction in global steel prices.

EBITDA increased 0.5% y-o-y. Lower cost of sales compared to Q1 2019 offset lower steel prices. EBITDA margin increased by 1.8 p.p. to 25.8%.

Net profit declined by 41.8% year-on-year (y-o-y) due to foreign exchange differences of USD 77 million amid the rouble devaluation at the end of Q1 2020.

Free cash flow (FCF) amounted to $110 mln, down 57.7% y-o-y.

MMK GROUP HIGHLIGHTS BY SEGMENTS

Steel segment (Russia)

Revenue of the Russian steel segment for Q1 2020 amounted to $1,602 mln, down 3.5% q-o-q as a result of a decrease in sales volumes amid the scheduled repairs of rolling equipment. Revenue declined 10.2% y-o-y due to a decrease in sales volumes amid low global steel prices.

The segment's EBITDA for Q1 2020 amounted to $421 mln, up 28.7% q-o-q, mainly due to stronger domestic sales amid higher steel prices. EBITDA grew 0.7% y-o-y due to the correction in market prices for key raw materials amid lower steel prices.

The Group's profitability over Q1 2020 saw a positive effect from the operational efficiency and cost optimisation programme which amounted to $23 mln in the reporting quarter.

The slab cash-cost in Q1 2020 amounted to $267, down 5.7% q-o-q. This decline was mainly due to higher share of sinter in the blast furnace charge as a result of commissioning of sinter plant No. 5 in mid-2019. Another positive factor was the correction in prices for iron ore and coal concentrate. The slab cash-cost declined 12.2% y-o-y, reflecting significant decline in prices for key raw materials and improved structure of the blast furnace charge.

Steel segment (Turkey)

The segment's revenue for Q1 2020 amounted to $113 mln, up 2.7% q-o-q. This growth reflected expansion of the product portfolio and partial recovery in prices for metal products in Turkey. Revenue declined 13.1% y-o-y, mainly due to lower sales volumes for polymer-coated steel due to the early termination of EU imports quotas amid correction in global steel prices.

The segment's EBITDA grew in Q1 2020 and amounted to $3 mln due to higher prices for coated rolled steel on the domestic market amid lower prices for procured hot-rolled steel. The segment showed profitability growth compared to Q1 2019, as prices for hot-rolled metal declined faster than prices for the company's products amid significant correction in global steel prices.

Coal segment

Revenue of the segment in Q1 2020 declined 8.5% q-o-q and amounted to $54 mln, mainly due to the continued correction in coal concentrate prices. Revenue declined 32.5% y-o-y.

The segment's EBITDA for Q1 2020 grew 60.0% y-o-y to $16 mln due to higher sales volumes of coal concentrate and lower costs for current repairs. EBITDA declined 50.0% y-o-y due to the significant correction in prices for coal concentrate.

About MMK

MMK is one of the world's largest steel producers and a leading Russian metals company. The Group's operations in Russia include a large steel-producing unit encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2019, MMK produced 12.5 mln tonnes of crude steel and 11.3 mln tonnes of commercial steel products.

MMK's ordinary shares are traded on Moscow Exchange, while its depositary receipts are traded on the London Stock Exchange. Free float amounts to 15.7%.

Contact:

Veronika Kryachko

Tel: +7 (3519) 25-75-01

Email: kryachko.vs@mmk.ru

(C) 2020 Electronic News Publishing, source ENP Newswire

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Financials (USD)
Sales 2020 6 580 M - -
Net income 2020 718 M - -
Net Debt 2020 40,3 M - -
P/E ratio 2020 490x
Yield 2020 0,17%
Capitalization 421 B 5 964 M -
EV / Sales 2019
EV / Sales 2020 64,0x
Nbr of Employees 17 887
Free-Float 15,7%
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Mean consensus OUTPERFORM
Number of Analysts 2
Average target price 0,65 $
Last Close Price 37,67 $
Spread / Highest target -97,8%
Spread / Average Target -98,3%
Spread / Lowest Target -98,6%
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Managers
NameTitle
Pavel Vladimirovich Shilyaev Chief Executive Officer & Director
Victor Filippovich Rashnikov Chairman
Maria V. Nikulina Head-Finance Resources
Vadim N. Feoktistov Chief Information Technology Specialist
Zumrud Khandadashevna Rustamova Non-Executive Director
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