Short explanatory note to the Joint Stock Company Uzbek Metallurgical Plant (‘JSC UZMK’) 3Q23 and 9 months 2023 Financial Results


   Joint Stock Company Uzbek Metallurgical Plant (RSE: UZMK), a leading manufacturer of iron and steel products in Uzbekistan, announces the publication of interim financial statements for the period July 1 to September 30, 2023, under the national accounting standards.
   The report on the results of 3Q 2023 is available for review here, as well as on the company site:


Key highlights of the 3 Quarter of 2023:

  • The company's production facilities were utilized at full capacity in the 3Q 2023. Sales volumes in 3Q were comparable to the level of previous years, albeit slightly lower than in the second quarter, as sales deferred from the 1Q of the current year were realized during 2Q;
  • The company's revenue for 3Q 2023 came 1% lower compared to revenue for the same period last year, due to a slight year-on-year decline in prices;
  • Cost of sales in 3Q 2023 increased by 14% year-on-year, mainly due to higher energy costs for large Uzbekistan producers. At the same time, the cost of sales fell slightly quarter-on-quarter, further highlighting that the main change in energy prices occurred already in the middle of 2Q this year; the increase in cost of sales was also impacted by the Company's use of a different type of raw material for part of its production in 3Q3; the depreciation of UZS versus a basket of foreign currencies also impacted the cost of the imported materials;
  • Administrative expenses in the third quarter of 2023 remained approximately unchanged from the level at the same period in 2022. As a result, it was due to the increase in cost of sales that the year-on-year operating profit declined;
  • For the nine months and third quarter of 2023, the company's foreign exchange losses decreased significantly compared to the same periods in 2022 as a result of a change in the currency mix of its liabilities;
  • As a result of the above factors, the company's net income increased 43% year-over-year in 3Q 2023. Despite this, net income for 9M 2023 decreased by 22% year-on-year and net profit margin for 9M 2023 fell by 2.5 percentage points year-on-year versus 2022 level;
  • Uzmetkombinat JSC continues to pursue large-scale investment program, in particular, focusing on the construction of a casting and rolling complex. Its partial launch is planned for the 4Q 2024. The company expects to reach full capacity in 2025, which will double the company's production capacity compared to 2022-23.
  •  The increase in debt at the end of 3Q 2023 versus 2Q 2023 was mainly due to the attraction of loans from the UFRD and international financial institutions to support the investment program and replenish working capital;
  • The company's management expects to implement a number of measures aimed at addressing the negative effects of the growth in cost of sales in order to maintain company margins at a higher level.
  JSC Uzmetkombinat (JSC UZMK) is the leader of ferrous metallurgy in Uzbekistan, counting its history from 1944. Its manufacturing plant has an installed annual capacity of more than 1 million tons of rolled products and is implementing a large-scale investment program to increase capacity to 2.5 million tons per year during 2021-2025. The enterprise employs more than 12,000 people. Its products are sold in all regions of the country and are exported to various countries of the world, including Europe. More than 80% of the company's shares are owned by the Uzbekistan state. A significant portion of the company’s shares is traded on RSE "Toshkent". Common and preferred shares of the company have the status of highly liquid, and the market capitalization of the company is around UZS 4 trillion (approx. USD 350 million).
  Additional inquiries should be addressed to:
  Timur Sharifullin –

   This financial release contains forward-looking statements that reflect the current views of JSC Uzmetkombinat management regarding future events. They are generally denoted by the words "expect", "anticipate", "intend", "estimate", "aspire", "plan", "will", "forecast" and comparable expressions, and usually contain information that refers to expectations or goals regarding economic conditions, sales revenue, or other criteria for the success of an enterprise. Forward-looking statements are based on current plans, estimates and expectations within the current legal and regulatory environment and are therefore only valid as of the date indicated. Therefore, such statements should be considered with caution. Such statements are subject to numerous risks and uncertainties (such as those described in publications), most of which are difficult to estimate and are generally beyond the control of JSC Uzmetkombinat. Relevant factors include the consequences of prudent strategic and operational initiatives, including the acquisition or disposal of companies (interests in them) or other assets. If certain risks and uncertainties arise, or if the assumptions on which the statements are based prove incorrect, the actual results of JSC Uzmetkombinat may differ materially from those expressed or implied in these statements. Uzmetkombinat JSC cannot give any guarantee that expectations or goals will be achieved. Uzmetkombinat JSC, despite existing legal obligations, disclaims any responsibility for updating forward-looking statements to reflect new information or future events or other conditions or circumstances.
   In addition to key figures prepared in accordance with IFRS and NSBU, respectively, JSC Uzmetkombinat presents key non-GAAP measures such as EBITDA, EBIT, net debt and net financial liabilities that are not a component of accounting rules. These key figures should be considered as a supplement to, but not as a substitute for, data prepared in accordance with IFRS. Non-GAAP key figures are not subject to IFRS or any other generally applicable accounting rules. When evaluating the net assets, financial position and performance of JSC Uzmetkombinat, these additional indicators should not be used in isolation or as an alternative to key indicators presented in the consolidated financial statements and calculated in accordance with relevant accounting principles.
   Rounding differences can occur in relation to percentages and figures.