24 May ‘16

Fitch Revises MMK's Outlook to Positive; Affirms at 'BB+'

In its press-release Fitch notes that the Positive outlook reflects MMK's strong financial performance which allowed MMK in 2015 to reduce FFO adjusted gross leverage to around 1.3x, mainly through debt repayments. In addition to a strong financial profile, MMK’s ratings also reflect its strong position on the Russian market as a supplier of a wide range of high value-added steel products.

Fitch also expects MMK to further decrease debt in 2016 which will off-set the lower FFO, due to lower steel prices and challenging operating environment in Russia. In 2015, the company was able to reduce leverage to 1.3x from 1.8x in 2014 mainly due to a decrease in financial debt by USD0.7bn to USD1.8bn by end-2015 from USD2.6bn at end-2014. In 2015 MMK group also improved its cash position resulting in FFO adjusted net leverage decreasing by 0.6x.

Fitch sees the company's capex to be between USD400m to USD550m per annum for the next 3 years as the company does not have any material investment needs. Fitch expects the average dividend pay-out for the next three years to be around 2x higher than the last three years as the improved financial profile of the company allows it to support a higher dividend pay-out.

Fitch assessed MMK's liquidity position as adequate with USD244m of cash in hand, USD433m of short-term investments and USD1.2bn of committed unutilised credit lines compared with USD0.8bn of short-term borrowings at 31 March 2016.

About MMK

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 2015, the company produced 12.2 million tonnes of crude steel and 11.2 million tonnes of commercial steel products. MMK Group had sales in 2015 of USD 5,839 million and EBITDA of USD 1,668 million.

Investor Relations Department:

Andrey Serov, Head of IR

tel.: +7 (3519) 24-52-97

E-mail: serov.ae@mmk.ru

MMK Communications Department

Dmitry Kuchumov Sergei Vykhukholev

Tel: +7 (499) 238-26-13 Tel: +7 (499) 238-26-13

E-mail: kuchumov.do@mmk.ru E-mail: vykhukholev.sv@mmk.ru

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