MMK - 2Q19 IFRS Results In Line on EBITDA and Dividend
MMK has reported 2Q19 IFRS results, which came in line with our and the consensus estimates on EBITDA. While leveraged FCF generation surprised us to the downside, the proposed dividend payment ($120 mln) was in line with our expectations, as MMK is paying out 200% of its FCF this quarter (versus 100% in the previous five quarters). At spot steel and bulk prices and at the current USD/RUB rate, MMK is trading at around an 8.5% 2020E dividend yield. We reiterate our HOLD recommendation.
Magnitogorskiy Metallurgicheskiy Kombinat PAO, formerly Magnitogorskiy metallurgicheskiy kombinat OAO, is a Russia-based company, active in the steel industry. Its main products are sinter, coke, iron, crude steel, rolled products and ore materials. The Company offers a wide range of products such as wire rod, rebars, square bars, strips, round bars, among others. It is also involved in the coal ore mining, processing of ore materials, sale of ferrous metal products and others. Magnitogorskiy metallurgicheskiy kombinat OAO operates as a supplier for such industries as: pipelines, vehicles, railway, construction and shipbuilding, among others. Its subsidiaries include Lys'venskaya Metallurgicheskaya Kompaniya OOO, among others. The Company operates domestically, as well as exports its products to the Commonwealth of Independent States (CIS) countries, Asia, the Middle East and Europe.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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