Standard & Poor’s Global Ratings revises MMK outlook to positive
The outlook revision reflects robust performance of Russian steel producers at the environment of global steel industry downturn. The solid performance is backed by low production cost and stable demand for steel in the country.
The S&P outlook upgrade reflects MMK’s ability to maintain a prudent financial policy by having the lowest leverage among Russian steel producers, keeping CAPEX discipline and sticking to conservative dividend policy.
S&P commented in a press release:
"The positive outlook on MMK reflects the possibility that we could raise the ratings in the next 24 months if the company maintains solid credit metrics, with FFO to debt above 60%, even if industry conditions are more challenging than our current base-case scenario, while maintaining its conservative financial policy".
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia span the entire value chain from iron ore processing to downstream production of rolled steel. MMK produces an extensive 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 is one of the cost leaders in the industry with leading positions in profitability. In 12M 2018, the Company generated USD 8,214 million in revenue and USD 2,418 million in EBITDA. MMK Net Debt/EBITDA ratio is the lowest in the industry – (0.08x) as of 2018. The Company has investment grade ratings from Fitch, Moody’s, S&P.
MMK is listed on Moscow Stock Exchange and the Company’s GDRs are traded on the London Stock Exchange. The Company’s free-float is 15.7%.
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