MMK Announces Operational Trading Update and H1 2008 Results under Russian Accounting Standards

Key Financial Highlights
- Sales  increased by 31% to RUR 121,730 billion (compared to RUR 93,220 billion in H1 2007)
- Operating income rose by 18% to RUR 32,003 billion (RUR 27,023 billion for H1 2007)
- Net income¹ grew by 18% to RUR 25,249 billion (opposed to RUR 21,353 billion H1 2007)
- Domestic sales share (in tonnage) grew to 69% in Q2 2008

Key Operational Highlights
- Steel output in H1 2008 increased by 8% to 7,015m tons (compared to H1 2007)
- Commercial steel products output increased by 8% to 6,434m tons
- Significant growth in prices for MMK’s entire product line
- International pricing environment and strong domestic demand lead us to expect same price levels for Q3 2008

Commenting on the results, Victor Rashnikov, Chairman of MMK’s Board of Directors said:
“We are satisfied with our achievements for the first half of 2008. We continue to consistently strengthen our presence in the Russian market. It is the markets of Russia and CIS with which we connect our ambitious plans, reflected in our large-scale investment programme.
The current level of steel prices within Russia and globally confirms  optimistic expectations for the year.
We are continuing to follow our strategy of securing raw material supplies through new and ongoing projects, including the development of our own iron ore base and the Prioskol iron ore deposit and expansion of our partnership with Belon.”
 
Net of long-term investments revaluation.