Page 124 - RusRPTNov18

be above, the high-end of the guided range, given that 78-85% of it was already achieved in 9mo18.
Magnitogorsk Iron and Steel Works (MMK) published its the third quarter of 2018 trading update on October 16. In the third quarter of 2018, sales of finished products totalled 3,052 kt, up 7.2% q/q. Sales of HVA products slid 2.1% q/q to 1,351 kt and accounted for 44.3% of total sales. Sales from MMK's main site grew 8.9% q/q to 3,007 kt. MMK reached full capacity utilization and kept steel inventories at a minimum thanks to high demand. Sales in the domestic market were up 2.7% q/q, while export sales jumped 38% q/q (export sales accounted for 22% of sales in the third quarter of 2018, versus 17.5% in the second quarter of 2018). Shipments of HVA products in the third quarter of 2018 increased 2.5% q/q to 1,104 kt. The average sales price in the third quarter of 2018 decreased 6.7% q/q, slightly underperforming global benchmarks due to a deterioration in the sales mix. Coking coal production in the third quarter of 2018 increased by 14.3% q/q to 1,512 kt on the back of the completion of operations in a high ground pressure area at the Chertinskaya-Koksovaya mine.
Novolipetsk Metallurgical Kombinat (NLMK) reported its the third quarter of 2018 operating results on October 16 . Steel output grew 1% q/q to 4.38mn tonnes, while capacity utilization remained flat q/q at 99%. Total sales increased by 1% q/q to 4.42mn tonnes on the back of higher long steel sales. The share of sales in home markets (i.e. products sold in the region in, which they were produced) totalled 63%. Long product sales from the Russian division increased 46% q/q to 0.93mn tonnes on the back of sales of previously accumulated stocks in response to an uptick in demand after the World Cup. Sales of flat products from the Russian division decreased 7% q/q to 3.19mn tonnes, largely due to the decrease in exports of finished flat products, while the US division's sales were down 8% q/q to 0.59mn tonnes, as consumers held off on purchases in expectation that the downward price trend that started in July would continue. In Russia, average prices for uncoated flat steel slid 5-7% q/q in dollar terms following the decrease of global benchmark prices and the depreciation of the ruble.Despite the decline in steel prices in the third quarter of 2018, bankers see NLMK's EBITDA margin expanding q/q to circa 30% on the back of the weaker ruble, with EBITDA for the quarter coming in at around $890-930mn.
9.2.12 Transport corporate news
Russia's oil pipeline monopoly Transneft acquired 25% in Russia's largest port and stevedore group Novorossiysk Commercial Sea Port ( NCSP ) for $750mn from Summa Group , Kommersant d aily reported on October 9 citing the companies. Previously in 2018 the shares of NSCP were arrested and blocked as part of an ongoing criminal investigation into its shareholder Summa Group and jailed Kremlin-connected oligarch Ziyavudin Magomedov, disturbing the port's operations. Ziyavudin Magomedov is Russia's 76th richest man with a fortune of $1.3bn according to Forbes. He and his brother and ex-senator of North Caucasus Republic of Dagestan Magomed Magomedov were arrested on March 31 accused of large-scale embezzlement and running an economic crime ring. Magomedov's Summa group is a large investor in transportation assets that include the NSCP, Fesco ports and Transcontainer, as well as construction, oil and gas, agriculture, and telecom assets. NCSP for a long time remained one of the main assets of
124 RUSSIA Country Report November 2018 www.intellinews.com