Annual report 2007 - Magnitogorsk Iron & Steel Works ...

Financial Results
The net income of MMK in 2007 increased 24.3% against 2006 and reached USD 1.772 billion. The net earnings
per share amounted to USD 0.164. The net income margin on revenue amounted to 22%.
The net income growth in 2007 was primarily influenced by the operating income growth.
The operating income of MMK in 2007 increased by 18% against 2006 and amounted to USD 2.079 billion.
MMK has a low dependency on external sources of financing. The total Debt to Equity ratio as of 31.12.2007
stood at 21%. The net cash position of MMK amounted to USD 81 million.
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Description 200 200 200 2007
EBIT, USD million 1, 538 1, 323 1, 765 2, 079
Adjusted EBITDA, USD million 1, 735 1, 511 2, 005 2, 342
EBITDA margin 35.93% 28.09% 31.21% 28.57%
Net income margin 25.51% 17.60% 22.20% 21.62%
ROCE,% 30.92% 30.58% 34.99% 24.88%
Net Debt, USD million -858 -499 440 -81
Net debt/EBITDA - - 0.22 -
Debt/Equity, % 33.03% 17.33% 24.91% 21.04%
The Company’s Borrowing Policy
The main guidelines of the MMK’s borrowing policy in 2007 were as follows:
use of short-term bank loans for financing short-term liquidity gaps;
use of long-term loans for financing the contracts signed as part of the investment program;
use of project financing as one of the tools of financing long-term projects aimed at the expansion of MMK’s
business;
mandatory compliance with concluded financial transactions. including monitoring of and compliance with
financial covenants;
timely fulfillment of payment obligations for servicing external debt;
optimization of MMK’s borrowings for the purpose of reducing servicing costs.
Raising debt capital based on the above guidelines, together its information transparency, positions MMK as a
company attractive for investors and financial institutions.