Fitch Ratings Upgrades MMK to 'BBB'; Outlook Stable
In its press release Fitch Ratings notes that the rating upgrade reflects MMK's ability to maintain a conservative financial profile during market turbulence due to the company's low cost of operations, focus on high-value added (HVA) products, leading positions on the Russian steel market and high profit margins through the cycle.
Fitch also admits that MMK has one of the lowest leverages among steel companies globally. After MMK repaid most of its debt in 2015-2016, the company has had almost zero net debt and is committed to keeping low debt levels.
MMK is rated above the 'BBB-' Country Ceiling for Russia (BBB-/Positive). This is in line with Fitch’s Rating Non-Financial Corporates Above the Country Ceiling Rating Criteria and takes into account the company's strong hard-currency external debt service ratio, which is supported by sufficient cash flows from exports and foreign assets and by an overall low leverage.
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain, from the preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of high-value-added products. In 2018, the company produced 12.7 million tonnes of crude steel and 11.7 million tonnes of commercial steel products. MMK Group had sales in 2018 of USD 8,214 million and EBITDA of USD 2,418 million.
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