Alchevsk Iron & Steel Sales Up 28.9% yoy In 9M05, To USD 727.8 mln.

The company’s (ALMK: BUY) EBITDA margin for the period improved to 14.3% from 5.6% in 9M04. In addition, the company’s net margin in 9M05 was 8.5%, up from 1.2% in 9M04. Alchevsk Iron & Steel is controlled by the IUD group. Concorde Capital: Previously, we stressed that ALMK would continue practicing transfer pricing and that most of its profits would be absorbed by its parent company, IUD. However, this year the company appears to be showing higher sales and earnings than we initially expected. We ascribe the improvements in ALMK’s financials to cutting down on transfer pricing and the IUD’s moves to improve of the company’s efficiency. This gives our BUY grade additional justification.