OJSC “Magnitogorsk Iron and Steel Works” (MMK) announces its Q1 2009 financial results under Russian Accounting Standards (RAS)

The results reflect MMK operations only and do not relate to subsidiaries or affiliated companies.

Key Q1 2009 operational highlights

· Crude steel output 2.1 mt (+25.6% to Q4 2008)

· Finished steel products output 1.9 mt (+24.3% to Q4 2008)

Key 2008 financial highlights

The growth in Q1 2009 financial results is driven by increased capacity utilization rates and output volumes. These were spurred with stronger demand for steel products, especially in the domestic market. External factors were also significantly supported by a strict financial policy based on the crisis management programme. Implementation of the programme allowed to reduce costs, cut down payables and receivables as well as to increase the amount of cash on the balance of MMK.

Q1 2009 profit & loss statement

· Q1 2009 revenues up to RUR 28.3 bn (RUR 27.7 bn in Q4 2008).

· Operating income up by RUR 6.6 bn to RUR 4.4 bn.

· Net income amounted to RUR 3.9 bn which is RUR 27.3 bn higher than Q4 2008 figure.

The growth of net income in Q1 2009 compared to Q4 2008 is attributed to the following factors:

· operating income increase due to 9% growth of sales volumes in cash terms and 18% decrease of production costs for 1 ton of metal products

· increased results of financial investments revaluation (due to market price growth of Russian and foreign entities’ securities in possession of MMK), against such revaluation for Q4 2008 which resulted in losses.

· prices markdown for the raw material stock in Q4 2008.

Balance sheet as ofMarch 31, 2009

Total assets amounted to RUR 231.9 bn.

The balance sheet value of non-current assets grew by 7% compared to Dec 31, 2008 in the result of:

· capital investments growth by RUR 9.2 bn.

· positive revaluation of long-term investments by RUR 2.9 bn.

Current assets value decreased by 13% due to the following:

· receivables decrease by RUR 4.2 bn.

· inventories decrease by RUR 6.0 bn.

Cash grew by RUR 3.1 bn. Long-term liabilities increased by 48% to RUR 28.3 bn as the result of the long-term investment programme implementation.

Short-term liabilities went down by 29% to RUR 31.2 bn due to payables decrease.