Russia's largest iron ore producer, OAO Metalloinvest, posted a 17.1% rise in net profit to US$1.65 billion for 2018 as prices of its main products grew substantially, boosting revenue.

Revenue rose 15.3% year over year to US$7.19 billion as prices increased 12.1% for steel, 7.9% for pig iron and 2.9% for high-quality iron ore, which had increased 23.6% the previous year. Pricing for iron pellets surged 31%. Metalloinvest is the world's second-largest producer of iron pellets.

In terms of costs, price increases for raw materials and a change to the company's product mix resulted in the cost of sales increasing 6.5% to US$3.27 billion.

EBITDA jumped 38.4% to US$2.93 billion, from US$2.12 billion in 2017, as the EBITDA margin reached 40.8%, driven mainly by price growth but also by an increase of high value-added products in the company's product mix. Supplies of hot briquetted iron were up 18.1% and pellets were up 9.3%.

On an annual basis, iron ore output was flat at 40.36 million tonnes, with shipments down 27.1% to 7.57 Mt. Pellet production rose 10.2% to a record 27.66 Mt, with 14.01 Mt shipped.

Production of hot briquetted iron and direct reduced iron increased 12.1% to reach a record 7.83 Mt, and shipments rose 18.9% to 4.25 Mt, having grown by 42.1% in 2017.

Crude steel production hit 5.05 Mt, a 6.2% rise compared to 2017, while hot metal output grew 12.6% to 3.03 Mt.

The company also saw net debt fall 8.9% by the end of 2018 to US$4.05 billion. Long-term debt comprised a greater proportion of borrowing at 94.6% of the total.

Net debt-to-EBITDA fell to 1.1x, a level unseen since 2011, Financial Director Alexey Voronov said.

In a separate news release, Metalloinvest noted that Moody's Investors Services upgraded its corporate rating to just below investment-grade. The rating agency raised its assessment to Ba1 with a stable outlook from Ba2 with a positive outlook in light of progress with deleveraging, among other factors.