Mariupol Illicha Projects 2006 Net Income Down 43%.

The company (MMKI: BUY) announced projected 2006 results at its AGM on Saturday, including a 43% decline in net income to $142.6m. The company also approved CapEx of $79.2m, down from $148m in 2005, and decided not to pay dividends for 2005. Andriy Gostik: MMKI’s projections are in line with our own (net income of $150m, see our Metals & Mining report of Aug. 18). However, we maintain our BUY recommendation for the stock based on its strong expected fundamentals (1-1.5% expected output growth in 2006), as we believe the weak margins are due more to accounting tricks than to increased costs.