MOSCOW, December 18. /TASS/. Moody's Investors Service ("Moody's") upgraded Magnitogorsk Iron & Steel Works' (MMK) corporate family rating (CFR) to "Ba2" from "Ba3", the agency reported on Friday. The outlook on the rating is positive, the report said.
"The upgrade of MMK's ratings primarily reflects the significant improvement in the company's financial metrics over the past two years," Moody's said.
"Despite the forecast weakening in domestic demand for steel and prices for steel globally and domestically in 2016, we nevertheless expect that MMK's metrics will remain solid, owing to its strong business profile, robust cash flow generation and conservative financial policy," Moody's Vice President and Senior Analyst Artem Frolov was quoted as saying.
MMK is one of the world's largest steel producers and a leading Russian metals company. Its operations in Russia include a large steel-producing complex encompassing the entire production chain. Chairman of the Board of Directors Victor Rashnikov holds around 87% of the company’s shares.
In 2014, MMK produced 13 mln tonnes of crude steel and 12.2 mln tonnes of commercial steel products. MMK Group had sales in 2014 of $7,952 mln and EBITDA of $1,607 mln. Over the first nine months of 2015, the company reduced its debt to below $2.1 bln from nearly $2.6 bln at year-end 2014, owing to continuing positive free cash flow generation. MMK intends to repay rather than refinance the bulk of its 2016 debt maturities, aiming to further reduce its debt to around $1 bln by the end of 2016. Net revenue of MMK Group under International Financial Reporting Standards (IFRS) increased five-fold over the first nine months of 2015 to $546 mln year-on-year.