Magnitogorsk Iron and Steel Works (MMK) took fifth place in the global 2019 Value Creators rankings among metals companies with the highest return on investment, compiled by international consulting company Boston Consulting Group.
The rankings’ methodology is based on total shareholder return (TSR) generated in the past five years. Five-year TSR for MMK shareholders from 2014-2018 amounted to 30.3%, according to BCG experts. Shareholder return calculations take into account changes in the share prices and dividend payouts.
“The strong position of MMK in Boston Consulting Group’s rankings is a natural result of the successful execution of our efficient strategy and reflects consistent efforts of the company focused on increasing its investment appeal. While maintaining a conservative financial profile, MMK provides a high return on investment and is one of the leading Russian companies in terms of the dividends paid,” says Director for Economics at MMK Andrey Eremin.
For more than two years, MMK has been successfully adhering to its dividend policy under which the company aims to pay at least 50% of free cash flow (FCF) when net debt/EBITDA ratio is below 1.0х. In particular, the company paid dividends amounting to 100% FCF for 2018. MMK’s 2025 strategic goal is to become a leader among global metals companies with comparable production volumes in terms of total shareholder return.
Boston Consulting Group’s industry rankings, where MMK is recognized in the Top 5 this year, is part of wider research covering 33 industries of the global economy. The underlying TSR indicator is a long-term metric that reflects the true bottom line for a company’s shareholders, the rankings authors note. (MMK/Ukrainian metal)