Annual Report 2011 - Magnitogorsk Iron & Steel Works ...

2011 /
as of
31.12.2010
as of
31.12.2011
ANNUAL REPORT
About Us Sales Markets
Finances
Risks
Social Sphere
Management
Information
Analysis of y-o-y Change in MMK Group Cash Flow, USD million
1,600
1,400
1,200
1,000
800
600
400
200
0
515
Cash and Cash
Equivalents
(01.01.2011)
0 1,000 2,000 3,000 4,000 5,000
Long-term Short-term
578
Operating
activities
426
Financial
activities
-1,128
as of
31.12.2010
as of
31.12.2011
33
Investments Exchange
rate
difference
424
Cash and Cash
Equivalents
(01.01.2012)
In 2011, cash flow from operating activities was USD 578 million, lower than in 2010 due to a reduction
in operating profit and to the growth in working capital.
In 2011, cash outflow due to investment activities was USD 1,128 million (44 % down on 2010). Most of
the cash outflow (USD 1,154 million) was attributable to capital expenditure.
In 2011, USD 426 million was raised from financial activities (63 % down on 2010). Financial activities
comprise raising and repayment of loans (USD 3,358 million and USD 2,350 million, respectively),
acquisition of 50 % of the shares of MMK-Metalurji (USD 475 million) and payment of dividends (USD 122
million).
Debt Structure
0 1,000 2,000 3,000 4,000 5,000
Rubles US dollars Euro
In 2011, the Company’s total debt, including leasing debt, increased by USD 868 million. This was largely
due to an increase of USD 629 million in long-term debt. Short-term debt increased only insignificantly,
and the Company has been able to maintain a high level of financial stability.
As of 1 January 2011, dollar-denominated borrowings accounted for the largest part of the debt structure
by currency, at 45 %. However, this share declined during the year as the share of rouble-denominated
debt increased to 34 % from 28 % as a result of MMK’s policy to mitigate the effect of exchange rate
fluctuations on the Company’s financial position.
Credit ratings
In May 2011, Fitch raised MMK’s credit rating from BB to ВВ+ (stable outlook).
In December 2011, Moody`s changed the Company’s rating outlook to stable from positive, returning it to
the same level as the beginning of 2010.
Prudent financial management helps the Company to secure credit ratings from leading ratings agencies,
and thus to finance the Company’s development using appropriate funding on acceptable terms.
42 43
Agency
Moody`s
Fitch
Rating
Ba3
ВВ+
ВВ
Outlook
P
S
N
P
S
N
P
S
N
Jan
Feb
Mar
Аpr
May
June
2010 2011
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