UPDATE 1-Russia's MMK net profit down y-o-y, beats fcast
* MMK net profit $14 mln, down from $134 a year ago
* Profits affected by underperforming Turkish segment, forex losses
* Co total debt down y-o-y (Updates with context, quotes)
MOSCOW, June 15 (Reuters) - Magnitogorsk Iron & Steel Works (MMK), Russia's third largest steelmaker, on Friday posted a sharp drop in profits as its results were affected by its Turkish steel unit and foreign exchange losses.
The first quarter net profit of $14 million beat analyst expectations. Analysts had forecast the company to report a net loss of $1 million, down from a year-earlier net profit of $134 million on the back of lower steel prices and foreign exchange losses.
The company, controlled by billionaire Viktor Rashnikov, said its Turkish asset MMK Metallurji, which posted an $18 million EBITDA loss in the first quarter, dented overall profits along with currency exchange losses.
"The loss at MMK Metalurji continued to have a negative effect on net profit for the period," the company said in a statement. "One-off factors affecting net profit for the period included a foreign exchange loss of $89 million".
The company said its revenue rose to $2.43 billion from $2.22 billion a year ago.
Earnings before interest, tax, depreciation and amortisation dropped to $293 million from $403 million a year ago.
MMK's total debt stood at $4.25 billion in the first quarter, down by $170 million from the end of last year.
The company provided a mixed outlook for the second quarter saying steel prices would likely continue to fall.
"Average prices since the beginning of 2012 rose by 6-7 percent. At present prices are experiencing a correction, which is expected to continue into the middle of Q3 2012," MMK said.
At the same time MMK expects its 2012 finished steel products output to grow year-on-year driven by increased domestic demand and the launch of new products.
"An expected increase in demand for steel in Russia in 2012, the introduction of new products at Magnitogorsk and MMK Metalurji reaching full production capacity will allow MMK Group to increase output of finished steel products compared with 2011," the company said.
MMK shares were up 1.53 pct at 0711 GMT outperforming the broader MICEX index which was up 0.52 pct. (Reporting By Alexei Anishchuk, editing by Maria Kiselyova and Megan Davies)
- Tweet this
- Share this
- Digg this