OJSC Magnitogorsk MMK MMK Group Trading Update for Q3 and First 9M 2012
OJSC Magnitogorsk (MMK) - MMK Group Trading Update for Q3 and First 9M 2012
RNS Number : 0753P
OJSC Magnitogorsk Iron &Steel Works
19 October 2012
Magnitogorsk Iron & Steel Works
19 October 2012
MMK Group Trading Update for Q3 and First 9 Months of 2012
MMK Group operational highlights
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
MMK Group crude steel 3,357 3,294 2% 10,068 9,087 11%
MMK crude steel 3,187 3,012 6% 9,316 8,899 5%
MMK Metalurji crude steel 170 282 -40% 752 188 4x
MMK Group steel products 3,072 3,062 0.3% 9,154 8,299 10%
MMK steel products 2,858 2,776 3% 8,400 8,023 5%
MMK-Metiz steel products 129 142 -9% 380 362 5%
MMK Metalurji steel products 211 284 -26% 748 272 2.7x
MMK Group HVA products 1,276 1,209 6% 3,668 3,035 21%
MMK Group HVA products share 40% 39% 39% 37%
Belon coal concentrate 985 761 29% 2,521 2,334 8%
Iron ore 1,021 1,107 -8% 3,176 3,680 -14%
§ MMK Group crude steel output in 9M 2012 amounted to 10,068 thousand tonnes
(11% higher y-o-y).
§ MMK Group finished steel products output in 9M 2012 amounted to 9,154
thousand tonnes (10% higher y-o-y).
§ MMK Group finished steel products output in Q3 2012 totalled 3,072 thousand
tonnes (0.3% higher q-on-q).
§ MMK finished steel products output in Q3 2012 totalled 2,858 thousand tonnes
(3% higher q-on-q).
§ MMK-Metiz finished steel products output in Q3 2012 totalled 129 thousand
tonnes.
§ MMK-Metalurji finished steel products output in Q3 2012 totalled 211
thousand tonnes.
§ MMK Group High-Value-Added (HVA) steel products in 9M 2012 increased 21%
y-o-y and reached 3,668 thousand tonnes. HVA production in Q3 2012 amounted to
1,276 thousand tonnes, up 6% q-o-q.
§ Coking coal concentrate output in 9M 2012 amounted to 2,521 thousand tonnes
(8% higher y-o-y). In Q3 2012 coking coal concentrate output totalled 985
thousand tonnes, up 29% q-o-q.
§ In-house consumption of iron ore in 9M 2012 amounted to 3,176 thousand
tonnes (down 14% y-o-y).
[1] MMK Group is understood as OJSC MMK together with subsidiaries; OJSC MMK
is referred to as MMK
[2]MMK-Metiz products manufactured from products supplied by MMK are not
included in the finished products of MMK Group
Steel segment
ММК
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
Cast iron 2,571 2,557 1% 7,607 7,219 5%
Crude steel 3,187 3,012 6% 9,316 8,899 5%
Finished products output, incl.: 2,858 2,776 3% 8,400 8,023 5%
Slabs and billets 1 1 - 47 56 -15%
Long products 484 451 7% 1,336 1,127 19%
Flat hot-rolled products 1,388 1,416 -2% 4,185 4,364 -4%
High value-added (HVA) products, incl.: 985 908 8% 2,832 2,476 14%
Thick plate (mill 5000) 179 195 -8% 623 728 -14%
Flat cold-rolled products 379 304 25% 1,000 725 38%
Downstream products, incl.: 426 409 4% 1,209 1,022 18%
Tin plate 40 33 21% 110 105 5%
Galvanized steel 177 144 23% 480 364 32%
Colour-coated steel 94 94 0% 253 196 29%
Band 37 37 -1% 104 70 48%
Formed section 53 77 -31% 191 203 -6%
Pipes 25 24 4% 72 39 83%
Shipments by market:
Domestic market* 2,237 2,162 3% 6,433 5,507 17%
Export 621 614 1% 1,967 2,515 -22%
Average prices, USD
Q3 '12 Q2 '12 % 9M '12 9M '11 %
Average price per tonne:
Slabs and billets - - - 505 555 -9%
Long products 626 626 0% 633 699 -9%
Flat hot-rolled products 545 590 -8% 578 668 -14%
High value-added (HVA) products, incl.: 848 896 -5% 879 1 008 -13%
Thick plate (mill 5000) 900 916 -2% 917 1 112 -17%
Flat cold-rolled products 650 712 -9% 694 795 -13%
Downstream products, incl.: 1,003 1,023 -2% 1,012 1,086 -7%
Tin plate 1,120 1,120 0% 1,112 1,154 -4%
Galvanized steel 972 1,018 -4% 991 1,026 -3%
Colour-coated steel 1,224 1,253 -2% 1,239 1,287 -4%
Band 747 790 -6% 797 1 038 -23%
Formed section 922 905 2% 922 984 -6%
Pipes 742 764 -3% 753 865 -13%
Average price per tonne, incl.: 663 696 -5% 688 777 -11%
Domestic sales* 712 744 -4% 742 855 -13%
Export sales 486 528 -8% 510 605 -16%
* includes CIS sales
§ Finished steel products output in Q3 2012 amounted to 2,858 thousand tonnes,
which is 3% more that in Q2 2012. Sales to the high-priority domestic market
increased by 3% in volume, accounting for more than 78% of all shipments in
Q3.
§ In 9M 2012 production of high-value-added (HVA) products increased by 14%
from 9M 2011. This growth was largely driven by an increase in output of
cold-rolled, galvanized and colour-coated steel products.
§ The volume of HVA sales in Q3 2012 amounted to 985 thousand tonnes, up 8%
from Q2.
§ In Q3 2012 there were no sales of slabs to third parties.
§ Shipments of long steel products in 9M 2012 amounted to 1,336 thousand
tonnes, which represents a 19% increase y-o-y. This growth was driven by the
recovery in demand for steel from the construction industry. Furthermore, in
9M 2012 growth in long product sales was also generated by a 5% increase in
sales at the Metiz division of MMK Group - MMK-Metiz, which processes long
steel products produced by MMK.
§ In Q3 2012 shipments of long steel products were up 7% q-o-q.
§ The volume of finished products from Mill 5000 in Q3 2012 decreased by 8%
compared to Q2 2012 and amounted to 179 thousand tonnes. The lower volume of
shipments of flat hot-rolled products was a result of lower volumes of orders
from pipe makers due to the postponement of oil and gas projects.
§ The production and shipment volume of cold-rolled products in Q3 2012
increased by 25% compared to Q2 2012 due to the launch of the Mill 2000 and
also thanks to growth (more than 30%) of shipments of metal products to
customers in the automotive sector.
§ The increase in shipments of galvanized steel and colour-coated products in
9M 2012 by 32% and 29% y-o-y, respectively, is related to the recovery of the
construction industry in Russia.
§ Thanks to the improvement in product mix in Q3 2012 and the growth in
shipment volumes and share of sales to the domestic market, the company
succeeded in minimizing the effect of price deflation in export markets.
MMK-Metiz
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
Finished steel products, incl.: 129 142 -9% 380 362 5%
Products from MMK steel 126 140 -10% 374 358 4%
§ Production of finished steel products at MMK-Metiz in 9M 2012 grew by 5%
y-o-y to reach 380 thousand tonnes. This growth is attributable to the general
recovery in sectors of the economy like construction and metallurgy, which
contain main consumers of MMK-Metiz's.
§ Production of finished steel products at MMK-Metiz in Q3 2012 amounted to
129 thousand tonnes.
ММК Metalurji
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
Crude steel 170 282 -40% 752 188 4x
Finished products of ММК Metalurji, -26% 272
incl.: 211 284 748 2.7x
Flat cold-roll products 49 125 -61% 293 72 4x
HVA products, incl.: 161 159 1% 456 197 2.3x
Galvanized steel 60 81 -26% 217 115 89%
Colour-coated steel 101 79 28% 238 82 2.9x
§ Steel smelting in Q3 2012 totalled 170 thousand tonnes, which is 40% less
than in Q2 2012.
§ The sale of finished products from MMK's operations in Turkey in Q3 2012
amounted to 211 thousand tonnes, which is 26% lower than in Q2 2012.
§ This decrease largely stemmed from the lower output of commercial hot-rolled
products, the production of which is not economically sustainable in current
market conditions.
§ The 26% q-o-q decrease in galvanized steel production in Q3 2012 was a
result of an increase in the production of higher margin colour-coated steel.
§ Colour-coated steel production increased by 28% from Q2 2012 to Q3 2012 as a
result of the seasonal resurgence of the construction sector as well as the
implementation of a program to bring the Turkish asset to a profitable level
through the production of HVA products.
Mining segment
COAL
Belon
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
Coking coal 1,610 1,226 31% 4,128 3,656 13%
Mined 1,258 753 67% 3,011 2,897 4%
Purchased 352 473 -26% 1,117 759 47%
Coking coal concentrate 985 761 29% 2,521 2,334 8%
§ The higher volume of coking coal mined by MMK (up 67%) in Q3 2012 in
comparison to Q2 2012 was related to the conclusion of scheduled mine
maintenance at the end of Q2 2012.
§ Production of coking coal concentrate in Q3 2012 amounted to 985 thousand
tonnes. This increase in production by 29% in comparison to Q2 2012 was a
result of the higher volume of MMK-mined coal in Q3 2012.
§ On the whole in 2012, despite the maintenance work, production of coking
coal concentrate should remain at the same level seen in 2011.
Iron Ore
Production, thousand tonnes
Products Q3 '12 Q2 '12 % 9M '12 9M '11 %
Iron ore (consumed at MMK), incl.: 1,021 1,107 -8% 3,176 3,680 -14%
MMK iron ore base at Bakal* 91 139 -35% 335 369 -9%
MMK iron ore base in 378 458 -17% 1,303 1,589 -18%
Magnitogorsk
Slag processing 553 511 8% 1,519 1,722 -12%
* since the end of Q2 2011 shipments from Sosnovsky iron ore field are
included in shipments from MMK iron ore base in Magnitogorsk
§ Captive iron ore consumption in Q3 2012 decreased 8% q-o-q and amounted to
1,021 thousand tonnes
§ Consumption of iron ore coming from Bakal in Q3 2012 amounted to 91 thousand
tonnes, which is a 35% decrease from Q2 2012. This was a result of the sale of
the Bakal mine in August 2012, and the subsequent exclusion of this supplier
from the tally of captive iron ore consumption.
§ Output from slag processing rose 8% q-o-q in Q3 2012 and amounted to 553
thousand tonnes. The 12% y-o-y decrease in the use of iron from slag
processing in 9M 2012 largely stemmed from a number of improvements made to
reduce waste of primary resources and improve the quality of the agglomerate.
Key investment projects of MMK Group
Mill 2000
The launch of the second stage of MMK's new cold rolling complex, which
includes a continuous hot-galvanizing unit, a combined
annealing/hot-galvanizing unit, and a coil inspection and slitting line, in
July 2012 marked the conclusion of construction of the Mill 2000 complex.
At present the mill is beginning to produce new types of products (cold-roll
and galvanized), which is already having an impact in terms of larger
production volume and higher share of HVA products in MMK's portfolio.
At the same time, negotiations are underway on product certification and
contract terms with enterprises from automotive industry.
Outlook
In Q4 2012 sales volumes for finished products can be influenced by a seasonal
decline in business activity on the domestic market.
The growth in demand for steel in Russia and the world in general along with
the increasing production capacity of MMK Group in Turkey make it reasonable
to expect higher sales volumes for MMK Group in 2012 in comparison to 2011.
The publication of consolidated results under IFRS for MMK Group for Q3 and 9M
2012 is scheduled for late November 2012.
* * *
About MMK
Open Joint Stock Company MMK is among the world's largest steel producers and
is one of the leaders of Russia's steel industry. The company's operations in
Russia include a large steel producing complex encompassing the entire
production chain, from preparation of iron ore to downstream processing of
rolled steel. MMK turns out a broad range of steel products with a predominant
share of higher value added products. In 2011 the MMK Group produced 12.2 mln
tonnes of crude steel and 11.2 mln tons of commercial steel products. MMK
Group revenue in 2011 stood at USD 9.306 bn and EBITDA at USD 1.336 bn.
Contacts:
Investor Relations Department:
Andrey Serov, Head of IR
tel.: +7 (3519) 24-52-97
E-mail: serov.ae@mmk.ru
Communications Department:
Kirill Golubkov Polina Rudyaeva Alexander Proskurov
tel.: +7 (916) 675 3081 tel.: +7 (916) 675 3081 tel.: +7 (3519) 24-63-03
E-mail: E-mail: E-mail:
golubkov.kv@mmk.ru rudyaeva.pi@mmk.ru proskurov.as@mmk.ru
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTGLBDGXUBBGDC -0- Oct/19/2012 06:58 GMT
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