The profit of one of the largest steel producers in Russia has collapsed 9 times
The net profit of Magnitogorsk Iron and Steel Works Group (MMK) in January-June 2025 decreased to 5.6 billion rubles, which is almost nine times less than in the same period of 2024.
The company attributes the sharp drop in performance to a slowdown in business activity and a high key interest rate in Russia, which is holding back domestic demand for steel products, The Moscow Times reports.
At the same time, in the second quarter of 2025, the company's profit fell to 2.5 billion rubles, which is 21.1% less than in the first quarter, and indicates an acceleration in the rate of decline. At the same time, the company's outflow decreased by 2.1% to 155.1 billion rubles. MMK explains this by changing the sales structure-demand shifted towards less marginal grades, and part of the exports had to be redirected to the domestic market.
In the first half of the year, the group's revenues dropped by a quarter to 313.5 billion rubles. Revenue was negatively affected by the simultaneous decrease in sales volumes and average selling prices. The Russian Union of Metal Manufacturers has already recorded more than a 10% drop in steel demand in the country, while 2024 ended with a 6% decline.
In its forecast, the company notes that demand pressure will continue in the third quarter of 2025, as the high key interest rate will continue to cool investment activity in construction and mechanical engineering.
Magnitogorsk Iron and Steel Works (MMK) is one of the largest metallurgical plants in the CIS and Russia. The actual control over the company belongs to the Russian billionaire Viktor Rashnikov (79.76% of MMK shares), the company's share in free float is 20.24%.
Magnitogorsk Iron and Steel Works is under sanctions from all EU countries, the United States, Great Britain and Ukraine, which significantly reduced the company's ability to export its products.