BMZ improved economic performance considerably in Q2, 2016
Based on performance of Q2, 2016 the profit of OJSC "BSW - management company of "BMC" holding" on sales is 240,4 bln. of non-denominated rubles, while Q1 of the current year was at a loss for the company, i.e. 362,4 bln. Increased output, more shipped finished products as well as improved situation in metal markets of the world contributed to better performance of the company.
In the beginning of 2016 due to unfavorable foreign economic circumstances BMZ had to reduce the output, then in April growth trend was clearly seen, in May and June capacities were fully utilized. As a result, steel production growth rate of Q2 to Q1 amounted to 129,1%, rolled products 124,3%, pipes 145,7%, steel cord & wire products 121,6%. Production output as per Volume Indexover April-June reached 3,46 trillion of non-denominated rublesor 120% to the level of Q1. Export growth rate in relation to January-March amounts to 122,8% in physical terms and 128,9% in terms of money.
As mentioned above, more favorable situation was in the market of metal products in Q2 2016. Q1 showed reduction of quotations for all kinds of metal products and, according to many analysts, the market reached the bottom, then price trends changed and started growing in Q2. For example, the price for a ton of concast billet was on average approx. $270 USD in Q1, rebar $380 USD. Based on Q2 their price on average amounted to $300 and $420 USD, correspondingly.
It should also be noted that the company worked a lot with customers. 17 successful audits at BMZ only in Q2 2016, among them 10 are the audits made by customers, 7 are the audits made by certification bodies (Belarus, Austria, Germany, Norway, Poland, UAE). Homologation of products by end users proves their interest in the long-term partnership with the company. High quality and competitive prices provide for full utilization of capacities and formation of stock of orders for the next few months. For example, there are contracts available for products produced by rolling shops for 3 months ahead.
In general, efficient work in Q2 2016 made it possible for BMZ to finish the first half of the year with slight profit. An important contribution to achieve the positive result was made by the activities of BMZ aimed to save costs. Their economic effect amounted to more than 50 mln. USD.
It is assumed that positive trend will be kept at BMZ in the second half of the year as well. The outlook for global market of metal products: according to experts price level in July-December will be higher than in January-June. Planned achievement of designed capacity in rolling shop-2 (wide range of products with high added value) will also serve to strengthen the company’s economy.