In an unprecedented situation involving a pandemic coronavirus COVID-19 swept the whole world, MMK intends to maintain the established standards of corporate governance. It refers to the transparency of our activities, to ensure timely notification of events within the MMK Group and its markets.
Pandemic CОVID-19 has had and continues to have an extremely negative impact on all spheres of life on a global scale, including in the area of industrial production. In recent years we have seen a decline in demand in key industrial markets that consume steel, including MMK products. This decline is demonstrated by enterprises of construction industry, the automotive sector and pipe industry.
against this background, the Group should make every effort, including financial, for the health and well-being of our employees, their families and, more broadly, of the entire community in which we live and work, including our customers and suppliers.
at the same time we are taking some other strong measures to protect the interests of the Group in the long term, and in order to provide additional strength in case of possible disruptions in production. These measures include: the reduction scheduled for 2020, spending on CAPEX by about 20%; active cash flow management to ensure guaranteed payment obligations of MMK Group to suppliers and contractors; cost savings.
In the current situation think it is reasonable to defer a decision on payment of interim dividends for the year 2020 until the autumn of this year (depending on the actual impact of the pandemic COVID-19) to strengthen balance sheet and liquidity of the Group.
At the end of the crisis phase and the recovery of activity in the key markets of MMK Group, the Board of Directors will return to the question of the payment of interim dividends. As indicators normalcy and reconstruction of basic parameters of the economy we consider the following indicators: normalization of the epidemiological situation; the return of Russian business to the normal operating mode; the level of capacity utilization at MMK not less than 70%; MMK's profitability by EBITDA not less than 20%.
thank you for your understanding and support.
Chairman of the Board of Directors
of PJSC "MMK"
V. F. Rashnikov
