Impact of COVID-19 on MMK Group's performance and measures taken by the Company in response to its spread
During the current adverse conditions, the Company has suspended foreign business trips for employees and restricted business trips within Russia. The Company recommends that employees who visited territories with active cases of coronavirus conduct a mandatory 14-day home quarantine, with the option of working remotely.
MMK Group has also introduced a restriction on business partner delegations visiting the Company. Meetings, negotiations and work trips have been replaced by remote means of communication whenever possible.
MMK Group has the technological and organisational capacity to transfer its office functions to remote work.
The coronavirus infection affects the entire global economy. In this regard, the Company's management has assessed the potential impact of the outbreak on MMK's performance based on currently available information about the macroeconomic situation in Russia and the world.
At the current peak of the spread of the coronavirus and the decline in business activity, MMK Group is carrying out equipment repairs alongside a planned decrease in production volumes. At the moment, there is no critical impact on sales in the Company's main markets. However, the further development of the pandemic may negatively affect both global business activity and business activity within Russia.
Prices for steel products on the domestic market over the next 2-3 months will strive towards export parity, normalizing the premium of the domestic market. It should be noted that the Company, if necessary, has the ability to re-allocate a portion of its metal products sales to export markets.
To date, MMK Group has not experienced any difficulties with the supply of basic raw materials, as well as supplies of equipment and spare parts. All raw materials are taken under special control and tracked in terms of both their consumption in production and inventory.
MMK Group continues to implement its investment programme in accordance with its development strategy. Company management currently estimates that the impact of the adverse epidemiological situation on investment projects implemented in 2020 will be minimal.
The Company is closely monitoring the situation and is fully prepared to take measures to minimize risks for its staff and business. However, the negative impact of the pandemic on economic activity, commodity prices and steel products in a number of regions of the world cannot be excluded.