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MMK announces its consolidat​ed financial statement under IFRS for 12M and Q4 2010

Magnitogorsk Iron And Steel Works (MMK) : 10 April, 2011  (Company News)
Insignificant costs increase (mainly due to wages growth and raw materials prices increase) was offset by increased consumption of raw materials from captive sources.
The company has been efficient in controlling its costs, setting off input costs increase by growing self-sufficiency in iron ore, coal and electricity, as well as by decreasing consumption ratios.
Investments targeted completion of construction of MMK plant in Turkey and Mill 2000 in Magnitogorsk to produce high quality automotive cold rolled steel. The projects are intended to contribute to the strategy of MMK to increase production of HVA products and substitute imports in the markets of Russia and Turkey. The above-mentioned projects are in their completion phase, so 2011 is expected to see CAPEX decrease to USD 1.2 bln.

Highlights are as follows:

Russian steel consumption to grow by 10% in 2011, mostly driven by pipe-makers and machinery builders.
Somewhat stronger demand from the construction sector as the construction season begins.
Steel products output for MMK Group to grow by 20% in 2011, including growth of output in Russia at 15%. Such growth is driven by ramp up of MMK operations in Turkey and increased capacity utilisation in Russia.
Continue increasing HVA steel products output due to maximum production volumes at Mill 5000 and commissioning of the first phase of Mill 2000 in July this year, which will focus on production of high quality cold rolled automotive steel.
Close to completion of construction of steel making facilities in Turkey. In late 2010 cold rolling facility started its operation, and in March 2011 an electric arc furnace facility at the industrial complex in Iskenderun was commissioned.
Complete acquisition of 50% minus one share of MMK-Atakas from the Atakas Family, financial results of the company to be fully consolidated.

“The results reached in 2010 highlight the efficiency of the company’s strategy to increase its domestic sales by means of introducing new products and replacing imports. We observe growing demand for MMK products from our key clients and from traditional regions of our presence in Russia. This makes us certain of the steel products output growth outperforming average consumption growth rate. We passed over the peak of investments under our intensive CAPEX programme in 2010. Thus the 45% production growth by 2012 has been almost fully paid for, noted MMK CFO Oleg Fedonin.
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