OJSC Magnitogorsk - MMK announces 2007 results

Mon Mar 17, 2008 7:40am EDT

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RNS Number:2507Q
OJSC Magnitogorsk Iron &Steel Works
17 March 2008

                                 Press Release

       March 17, 2008                                      Magnitogorsk

Open Joint Stock Company Magnitogorsk Iron and Steel Work, one of the leading
integrated steel making companies, announces the results of its consolidated
financial statements for the 12 months 2007 according to US GAAP.

  • The revenue of MMK Group of Companies in the 12 months of 2007 increased
    by 27.6% compared to the 12 months of 2006 and amounted to USD
    8 197 million.
  • The operating income reached USD 2,079 million or 25.4% of the revenue.
    The growth compared to the 12 months 2006 amounted to 17.8%.
  • The consolidated net income of the Company in the 12 months 2007
    increased by 24.3% against the same period of last year and amounted to USD
    1,772 million, i.e. USD 0.164 per share. The net income accounted for 21.6%
    of the revenue.
  • EBITDA for the 12 months 2007 reached USD 2,342 million or 28.6 % of the
    revenue. Compared to the 12 months of 2006 EBITDA of the Company increased
    by USD 337 million or 16.8%.

Growth of crude steel production at OJSC MMK by 6.5 % secured by increasing
production at the new electric arc furnaces, allowed to raise the output and
sales of steel products by 6.8% (in tons) against the previous year.

Costs increase in 2007 mainly related to raw material price rise was compensated
by the growth of average prices for steel products. Thus the average price of
shipped steel products, produced by OJSC MMK, increased by USD 92 or 18.6% and
reached USD 589 per ton. The average price growth is due to the world steel
markets conditions and increasing sales in the domestic market where the average
price of shipped steel products in 2007 was USD 154 per ton higher than in the
export market.

A certain decline of relative profitability in 2007 against the previous year
was made up by the absolute growth of revenue and income as well as increased
earnings and income per ton of produced steel. Thus EBITDA per tone of steel
produced increased by USD 16 or 9.7 %.

Growth of net earnings per share amounted to USD 0.024 or 17.1%.

The MMK Group financial performance is characterized by high liquidity and low
dependency on external sources of financing.

Cash expenditures for investments in fixed and intangible assets and
acquisitions of subsidiary companies in the 12 months 2007 amounted to USD 1,317

Dividend payments under OJSC MMK's shares for 12 months 2007 amounted to USD 547
million (excluding dividends under treasury shares).

About MMK

The Magnitogorsk Iron and Steel Works OJSC (MMK) ranks 20th among the world's
largest steel producers (according to IISI) and is one of the leaders of Russia
's steel industry (according to Chermet data). The Company is 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 value added goods. In 2007 the
Company produced 13.2 m tons of crude steel, and 12.2 m tons of commercial

Head of Investor Relations

Evgeny Kovtunov
email: kovtunov@mmk.ru
tel: +7 3519 24 9355
fax: +7 3519 24 9360

Press Secretary
Elena Azovtseva
email: azovtseva@mmk.ru
tel: +7 3519 24 9082

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