Standard&Poor’s assigns MMK “BBB-“ rating, Outlook Stable
In a press release S&P notes that its assessment of PJSC Magnitogorsk Iron and Steel Works' (MMK's) creditworthiness incorporates MMK’s low-cost production profile, strong operating efficiency, significant share of high value-added products in sales, minimal leverage, and strong liquidity.
According to S&P only high country risk in Russia and the inherent cyclicality and capital intensity of the steel industry are the main constraining factors for the rating.
The stable outlook reflects S&P’s view that MMK will have strong positive free operating cash flow generation of about $1 billion in each of the next two years, underpinning strong credit metrics of debt to EBITDA below 1.5x and funds from operations to debt over 60%.
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 2017, the company produced 12.9 million tonnes of crude steel and 11.6 million tonnes of commercial steel products. MMK Group had sales in 2017 of USD 7,546 million and EBITDA of USD 2,032 million.
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