Magnitogorsk Has Fourth-Quarter $412 Million Loss on Demand

OAO Magnitogorsk Iron & Steel, Russia’s third-largest steelmaker, had a fourth-quarter loss as demand for the metal dropped.

The net loss was $412 million, compared with a $263 million profit a year earlier, calculated by subtracting the company’s nine-month figures from the full-year results posted on its Web site today. Sales fell 33 percent to $1.37 billion.

The Ural Mountains-based company didn’t break out fourth quarter figures. Yevgeny Kovtunov, head of investor relations, said he agreed with the Bloomberg calculations. Sales were $9.18 billion in the first nine months of 2008, the company said.

For 2008, net income attributable to the parent company fell to $1.08 billion, or 9.7 cents a share, from $1.31 billion, or 12.1 cents, a year earlier, Magnitogorsk said. Sales climbed 29 percent to $10.6 billion.

Russian demand for steel weakened from October, forcing producers to cut capacity utilization and chase delayed payments from clients. Magnitogorsk’s production fell by half in the fourth quarter to 1.65 million metric tons, from the previous three months, the company said in February.

Magnitogorsk, which owns more than 5 percent of Perth, Australia-based iron-ore miner Fortescue Metals Group Ltd., had total debt of $1.73 billion at the end of 2008 and $1.12 billion in cash and cash equivalents, it said today in a statement.

The company scrapped plans to create a joint venture with Italy’s Magnetto Automotive SpA to produce auto parts in St. Petersburg on a lack of orders, Vedomosti reported in February.

To contact the reporters on this story: Yuriy Humber at yhumber@bloomberg.net Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net.

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

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