UPDATE 1-Russia's MMK misses earnings forecast, sees improvement in Q2

Fri Jun 20, 2014 2:42am EDT

Related Topics

* First-quarter results hit by $118 mln exchange loss

* Expects increased production, sales in second quarter

* Higher domestic prices for steel, lower input costs to help (Adds details, outlook)

MOSCOW, June 20 (Reuters) - Russian steelmaker MMK reported on Friday a $79 million net loss for the first quarter, missing by a wide margin analysts' expectations for a $10.3 million loss, but said it expected an improvement in the second quarter.

MMK said its bottom line was hit by an exchange loss of $118 million on the back of a weaker rouble, adding that excluding this factor, it would have posted a $39 million net profit. In the first quarter of 2013 MMK made a net profit of $19 million.

Its revenue fell 18 percent year-on-year to $1.9 billion and earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased 23 percent to $294 million, slightly higher than forecast.

The decrease was because of a decline in steel prices in dollar terms on the domestic market as the rouble weakened, the company said in statement.

However, domestic prices have been recovering since March which the company, controlled by businessman Viktor Rashnikov, expects will translate into improved results for the second quarter.

"In Q2 2014, the Group expects increased production and sales volumes as compared to the previous quarter amid growth of domestic steel prices. In addition, declining global iron ore prices will support MMK Group's financial results for Q2," the company said. (Reporting by Maria Kiselyova, editing by Elizabeth Piper)

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