MMK Reports Dramatic Profit Decline AmidChallenging Market Conditions
Russian steel giant Magnitogorsk Iron and Steel Works hasreported a dramatic deterioration in its financial performance for the firstquarter of 2025. The company's net profit has collapsed by 96.2% year-on-year,falling to just RUB 1.5 billion ($16.3 million) from significantly higherlevels in the same period last year.
The financial downturn extends beyond bottom-line profits,with revenue declining 17.3% year-on-year to RUB 163.5 billion ($1.78 billion).The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, andAmortization) also suffered a substantial contraction, dropping 60.8% to RUB20.1 billion ($218.5 million) compared to the first quarter of 2024.
Market Headwinds Drive Performance Decline
MMK has attributed the sharp deterioration in financialresults to a combination of challenging market factors that have created adifficult operating environment for steel producers. These factors include:
1. Declining steel prices: Global and domestic steel priceshave been under pressure, reducing the value of MMK's output despite relativelystable production volumes.
2. Reduced demand: Weakening consumption in key end-usesectors has limited sales opportunities and put downward pressure on prices.
3. Rising production costs: Increases in raw material,energy, and other input costs have squeezed margins, contributing to the profitdecline.
Key Takeaways:
• Magnitogorsk Iron and Steel Works has reported a 96.2%year-on-year decrease in net profit for Q1 2025, falling to just RUB 1.5billion ($16.3 million).
• Revenue declined 17.3% year-on-year to RUB 163.5 billion($1.78 billion).
• EBITDA dropped 60.8% to RUB 20.1 billion ($218.5 million)compared to Q1 2024.
• The company attributes the poor financial performance tounfavorable market conditions, including declining steel prices, reduceddemand, and rising production costs
