OREANDA-NEWS. MMK (LSE: MMK) announces its consolidated financial statements under IFRS for Q2 and H1 2013.

HIGHLIGHTS

> MMK Group sales for Q2 2013 were USD 2,161 million, down 5.3% q-o-q.

> Cost of sales in Q2 2013 was USD 1,834 million, down 6.8% q-o-q.

> MMK Group operating profit for Q2 2013 was USD 25 million, up 25x q-o-q.

> EBITDA for Q2 2013 was USD 291 million, up 13.7% q-o-q.

> The net loss for Q2 2013 was USD 155 million, compared with a profit of USD 19 million for Q1 2013.

MMK GROUP CONSOLIDATED INCOME STATEMENT HIGHLIGHTS (USD MLN)

Q2 2013

Q12013

%

H1 2013

H12012

%

Sales

2,161

2,283

-5.3%

4,444

4,941

-10.1%

Cost of sales

-1,834

-1,968

-6.8%

-3,802

-4,219

-9.9%

Operating profit

25

1

25x

26

128

-79.7%

EBITDA*, of which

291

256

13.7%

547

662

-17.4%

Steel segment (Russia)

261

247

5.7%

508

640

-20.6%

Steel segment (Turkey)

4

2

2x

6

-26

-

Coal segment

27

6

4.5x

33

47

-29.8%

Consolidation effect

-1

1

-

-

1

-

EBITDA margin

13.5%

11.2%

2.3 pp

12.3%

13.4%

-1.1 pp

Net profit

-155

19

-

-136

-35

-

* EBITDA calculation is presented in the Notes to MMK's Consolidated Financial Statements

> Sales declined by 5.3% in Q2 2013 q-o-q driven by a reduction in the average sales price for products from Magnitogorsk while production remained steady at the level of the previous quarter. The drop in sales was also due to a reduction in sales volumes at MMK Metalurji.

> The cost of sales in Q2 2013 declined more quickly than sales q-o-q, to USD 1,834 million. This was due to lower prices for major raw material inputs during Q2 2013 and management efforts to reduce costs.

> The cash cost of slab in Q2 2013 fell by more than 3.5% q-o-q to USD 385.

> Operating profit for Q2 2013 was USD 25 million, significantly higher than in Q1 2013. This was due to the cost of sales declining faster than sales.

> MMK Group EBITDA for Q2 2013 was USD 291 million. The EBITDA margin was 13.5%, 2.3 pp higher q-o-q.

> MMK Group EBITDA for Q2 2013 increased by 14% q-o-q, due to:

o growth of profitability in the Russian steel segment of 5.7%, thanks to a substantial reduction in price for raw materials and management efforts to reduce costs and increase the efficiency of production;

o growth of EBITDA by 4.5x at Belon driven by a 24% increase in production volumes in Q2 2013 q-o-q and a stable pricing environment;

o 2x growth of EBITDA at MMK Metalurji driven by a favourable pricing environment on the Turkish market for rolled products.