Russia’s MMK Group expects stable demand in international and domestic markets to support sales in Q1 2021.
Capital expenditures through 2021 are being invested to improve maintenance, responsiveness to consumer needs, and reduce operational costs, it said while reporting the earnings for 2020 and the fourth quarter.
The group’s revenues decreased by 15.5pc to $6.4bn in 2020 from $7.6bn 2019. The Russian steel segment made up 92.2pc of MMK’s revenue at $6bn in 2020 against $7.2bn the previous year, a decline of 17.4pc. EBITDA in this segment also fell by 17.4pc in 2020 from the previous year. The company’s Turkish segment encountered limited revenue losses of 0.4pc, falling to $518mn in 2020 compared to 2019. The company benefited from a rise in prices and stronger demand in H1 2020 in Turkey and the EU.
Coal mining revenue declined by 27.2pc to $179mn in 2020 against $246mn in 2019. EBITDA was hit hardest in the division with a loss of 80.1pc to $13mn in 2020 from $68mn the prior year.
MMK produced 11.6mn mt of crude steel in 2020 as it sold 93pc of that volume or 10.8mn mt in finished steel products.
In Q4 2020, MMK’s revenue climbed by 18.3pc to $1.9bn compared to $1.6bn in the immediately preceding quarter. EBITDA followed with a hefty increase of 35.4pc to $474mn in Q4 2020 against $350mn in Q3. Profit for the period tripled from $102mn in Q3 2020 to $313mn in the fourth quarter.
The group’s EBITDA fell by 17pc to $1.5bn in 2020 from $1.8bn in 2019. The EBITDA margin though remained almost flat with only a marginal drop of 0.5pc points at 23.3pc in 2020 from 23.8pc last year. Profits stepped down by 29.4pc to $604mn in 2020 from $856mn the prior year.