ArcelorMittal reports second quarter 2015 and half year 2015 results
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports second quarter 2015 and half year 2015 results
. Processed and transmitted by NASDAQ OMX Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, July 31, 2015 - ArcelorMittal (referred to as "ArcelorMittal" or the
"Company") (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the
world's leading integrated steel and mining company, today announced results[1]
for the three and six month periods ended June 30, 2015.
Highlights:
* Health and safety: LTIF rate of 0.68x in 2Q 2015, lower as compared to
0.88x in 1Q 2015 and 0.87x in 2Q 2014
* EBITDA of $1.4 billion in 2Q 2015, stable as compared to 1Q 2015[2]
* Net income of $0.2 billion in 2Q 2015 as compared to a net loss of $0.7
billion in 1Q 2015
* Steel shipments of 22.2Mt in 2Q 2015, an increase of 3.4% YoY
* 16.4Mt own iron ore production as compared to 16.6Mt in 2Q 2014; 10.8Mt
shipped and reported at market prices, an increase of 2.7% as compared to
10.5Mt in 2Q 2014
* Iron ore unit cash costs reduced by 14% YoY; FY 2015 cost reduction target
at 15%
* Net debt of $16.6 billion as of June 30, 2015, stable as compared to March
31, 2015 mainly due to positive free cash flow of $0.5 billion offset by
negative forex ($0.2 billion) and dividends ($0.3 billion); Net debt lower
by $0.9 billion YoY
Key developments:
* Record health and safety LTIF performance in 2Q 2015
* Record 7Mt iron ore shipped from flagship AMMC operations in Canada during
2Q 2015
* MOU signed with Sail for India automotive steel joint venture
* Investment approved to increase HRC and HDG capacity in Krakow, Poland
* Signed intention to construct Europe's first-ever commercial scale
production facility at Ghent, Belgium to create bioethanol from waste gases
produced during the steelmaking process
Outlook and guidance:
* The Company's guidance remains unchanged and continues to expect: 2015
EBITDA within the range of $6.0 - $7.0 billion; 2015 capital expenditures of
approximately $3.0 billion; and 2015 net interest expense of approximately
$1.4 billion
* The Company continues to expect positive free cash flow in 2015 and to
achieve progress toward the medium term net debt target of $15 billion
Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 16,890 17,118 20,704 34,008 40,492
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EBITDA 1,399 1,378 1,763 2,777 3,517
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Operating income 579 571 832 1,150 1,506
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Net income / (loss) attributable to equity 179 (728) 52 (549) (153)
holders of the parent
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Basic income / (loss) per share (US$) 0.10 (0.41) 0.03 (0.31) (0.09)
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Own iron ore production (Mt) 16.4 15.6 16.6 31.9 31.4
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Iron ore shipped at market price (Mt) 10.8 9.4 10.5 20.1 19.8
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Crude steel production (Mt) 24.0 23.7 23.1 47.8 46.1
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Steel shipments (Mt) 22.2 21.6 21.5 43.8 42.4
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EBITDA/tonne (US$/t) 63 64 82 63 83
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Steel-only EBITDA/tonne (US$/t) 58 59 64 58 64
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Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"Despite continued pressure on both steel and iron-ore prices, we have delivered
a consistent set of operating results compared with the first quarter. Europe
continues to be a bright spot, with EBITDA again improving by 10.5% compared
with the first quarter of 2015. Mining has also performed robustly against the
backdrop of a lower iron-ore price, with ArcelorMittal Mines Canada reporting
record shipment levels and improved costs. We remain concerned by the high level
of imports. Whilst we are somewhat encouraged by recent actions on potential
trade defence measures from both the US and Europe, we are also taking action to
adapt our own business. More positively, even against such a challenging
backdrop, we have delivered a small net income for the second quarter, reduced
net debt year on year and we still expect to be cash flow positive for the
year."
Second quarter 2015 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the
investment community to discuss the second quarter period ended June 30, 2015
on:
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Date US Eastern time London CET
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Friday July 31, 2015 9.30am 2.30pm 3.30pm
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The dial in numbers:
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Location Toll free dial in Local dial in numbers Participant
numbers
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UK local: 0800 051 5931 +44 (0)203 364 5807 18485400#
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USA local: 186 6719 2729 +1 24 06450345 18485400#
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France: 0800 9174780 +33 17071 2916 18485400#
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Germany: 0800 965 6288 +49 692 7134 0801 18485400#
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Spain: 90 099 4930 +34 911 143436 18485400#
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Luxembourg: 800 26908 +352 27 86 05 07 18485400#
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A replay of the conference call will be available for one week by
dialing:
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Number Language Access code
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+49 (0) English 467409#
1805 2047 088
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The conference call will include a brief question and answer session with senior
management. The presentation will be available via a live video webcast on
www.arcelormittal.com.
Forward-Looking Statements
This document may contain forward-looking information and statements about
ArcelorMittal and its subsidiaries. These statements include financial
projections and estimates and their underlying assumptions, statements regarding
plans, objectives and expectations with respect to future operations, products
and services, and statements regarding future performance. Forward-looking
statements may be identified by the words "believe," "expect," "anticipate,"
"target" or similar expressions. Although ArcelorMittal's management believes
that the expectations reflected in such forward-looking statements are
reasonable, investors and holders of ArcelorMittal's securities are cautioned
that forward-looking information and statements are subject to numerous risks
and uncertainties, many of which are difficult to predict and generally beyond
the control of ArcelorMittal, that could cause actual results and developments
to differ materially and adversely from those expressed in, or implied or
projected by, the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings with the
Luxembourg Stock Market Authority for the Financial Markets (Commission de
Surveillance du Secteur Financier) and the United States Securities and Exchange
Commission (the "SEC") made or to be made by ArcelorMittal, including
ArcelorMittal's Annual Report on Form 20-F for the year ended December 31, 2014
filed with the SEC. ArcelorMittal undertakes no obligation to publicly update
its forward-looking statements, whether as a result of new information, future
events, or otherwise.
About ArcelorMittal
ArcelorMittal is the world's leading steel and mining company, with a presence
in 60 countries and an industrial footprint in 19 countries. Guided by a
philosophy to produce safe, sustainable steel, we are the leading supplier of
quality steel in the major global steel markets including automotive,
construction, household appliances and packaging, with world-class research and
development and outstanding distribution networks.
Through our core values of sustainability, quality and leadership, we operate
responsibly with respect to the health, safety and wellbeing of our employees,
contractors and the communities in which we operate.
For us, steel is the fabric of life, as it is at the heart of the modern world
from railways to cars and washing machines. We are actively researching and
producing steel-based technologies and solutions that make many of the products
and components people use in their everyday lives more energy efficient.
We are one of the world's five largest producers of iron ore and metallurgical
coal and our mining business is an essential part of our growth strategy. With a
geographically diversified portfolio of iron ore and coal assets, we are
strategically positioned to serve our network of steel plants and the external
global market. While our steel operations are important customers, our supply to
the external market is increasing as we grow.
In 2014, ArcelorMittal had revenues of $79.3 billion and crude steel production
of 93.1 million tonnes, while own iron ore production reached 63.9 million
tonnes.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT),
Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona,
Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please visit:
http://corporate.arcelormittal.com/
Enquiries
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ArcelorMittal Investor Relations
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Europe Tel: +352 4792 2652
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Americas Tel: +1 312 899 3985
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Retail Tel: +352 4792 3198
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SRI Tel: +44 207 543 1128
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Bonds/Credit Tel: +33 1 71 92 10 26
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ArcelorMittal Corporate E-mail: press(at)arcelormittal.com
Communications Tel: +44 0207 629 7988
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Paul Weigh Tel: +44 203 214 2882
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Laura Nutt Tel: +44 207 543 1125
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Isabelle Cornelis Tel: +44 203 214 2453
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France Image 7 Tel: +33 153 70 94 17
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United Kingdom Maitland Consultancy Tel: +44 20 7379 5151
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Corporate responsibility and safety performance
Health and safety - Own personnel and contractors lost time injury frequency
rate
Health and safety performance, based on own personnel figures and contractors
lost time injury frequency (LTIF) rate, improved to 0.68x in the second quarter
of 2015 ("2Q 2015") as compared to 0.88x for the first quarter of 2015 ("1Q
2015") and improved as compared to 0.87x for the second quarter of 2014 ("2Q
2014"). Significant improvement in health and safety performance was made across
all segments during 2Q 2015.
Health and safety performance was improved at 0.79x in the first six months of
2015 ("1H 2015") as compared to 0.86x for the first six months of 2014 ("1H
2014"), with improvements within Brazil, Europe and ACIS, offset by
deterioration in the Mining and NAFTA segments.
The Company's effort to improve the Group's Health and Safety record continues
and remains focused on both further reducing the rate of severe injuries and
preventing fatalities.
Own personnel and contractors - Frequency rate
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Lost time injury frequency rate 2Q 15 1Q 15 2Q 14 1H 15 1H 14
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Mining 0.57 0.60 0.84 0.59 0.54
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NAFTA 0.71 1.13 0.88 0.97 0.95
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Brazil 0.42 0.71 0.47 0.59 0.72
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Europe 0.97 1.15 1.25 1.05 1.23
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ACIS 0.39 0.56 0.51 0.47 0.51
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Total Steel 0.69 0.93 0.87 0.82 0.92
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Total (Steel and Mining) 0.68 0.88 0.87 0.79 0.86
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Key corporate responsibility highlights for 2Q 2015:
* ArcelorMittal retained its listing in the FTSE4GOOD. ArcelorMittal is proud
to have been a member of the FTSE4Good Index since 2007 and continuously
uses the series as a reference standard.
* ArcelorMittal joined IDH multi-stakeholder working group on sustainable tin
production in Indonesia, demonstrating commitment to improving the economic,
social and environmental sustainability of tin in its supply chain.
* Local corporate responsibility reports published in Brazil, Belgium,
Luxembourg, Germany and the USA highlighting operations' sustainability
achievements.
Analysis of results for the six months ended June 30, 2015 versus results for
the six months ended June 30, 2014
Total steel shipments for 1H 2015 were 3.2% higher at 43.8 million metric tonnes
as compared with 42.4 million metric tonnes for 1H 2014.
Sales for 1H 2015 decreased by 16% to $34.0 billion as compared with $40.5
billion for 1H 2014, primarily due to lower average steel selling prices (-
18.1%) and lower seaborne iron ore prices (-46%), offset in part by higher steel
shipments (+3.2%) and marketable iron ore shipments (+1.5%).
Depreciation of $1.6 billion for 1H 2015 was lower as compared to $2.0 billion
for 1H 2014 primarily due to the impact of depreciation of all major currencies
(Brazilian real, Euro and Canadian dollar) against the US dollar. Full year
depreciation is expected to be approximately $3.5 billion as compared to $3.9
billion in 2014.
Impairment charges for 1H 2015 were $19 million relating to the closure of the
Georgetown facility in the US, compared to nil in 1H 2014.
Operating income for 1H 2015 was $1.2 billion as compared to $1.5 billion in
1H 2014. Operating results for 1H 2015 were negatively impacted by a $69 million
provision primarily related to onerous hot rolled and cold rolled contracts in
the US (NAFTA). Operating results for 1H 2014 were negatively impacted by a $90
million charge following the settlement of US antitrust litigation.
Income from investments in associates, joint ventures and other investments in
1H 2015 was $123 million as compared to income in 1H 2014 of $154 million.
Income from investments in associates, joint ventures and other investments in
1H 2015 and 1H 2014 includes the annual dividend received from Erdemir.
Net interest expense (including interest expense and interest income) was lower
at $648 million in 1H 2015, as compared to $809 million in 1H 2014. The
reduction is attributable to both lower gross debt outstanding and lower average
cost. The Company continues to expect full year 2015 net interest expense of
approximately $1.4 billion.
Foreign exchange and other net financing costs were $829 million for 1H 2015 as
compared to costs of $707 million for 1H 2014. Foreign exchange and other net
financing costs for 1H 2015 include foreign exchange loss of $423 million as
compared to a gain of $11 million for 1H 2014, mainly on account of USD
appreciation of 7.8% against the Euro (versus 1.0% appreciation in 1H 2014) and
14.4% appreciation against BRL (versus 6.4% depreciation in 1H 2014). This
foreign exchange loss is largely non-cash and primarily relates to the impact of
the USD appreciation on Euro denominated deferred tax assets partially offset by
foreign exchange gain on euro debt. In addition, foreign exchange and other net
financing costs for 1H 2014 include a payment following the termination of the
Senegal greenfield project[3] and non-cash gains and losses on convertible bonds
and hedging instruments which matured during 2Q 2014.
ArcelorMittal recorded an income tax expense of $334 million for 1H 2015 as
compared to an income tax expense of $217 million for 1H 2014.
Non-controlling interests for 1H 2015 were a charge of $11 million, as compared
to a charge of $80 million for 1H 2014. Non-controlling interests for 1H 2015
and 1H 2014 represent a charge primarily related to minority shareholders' share
of net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in
Brazil.
ArcelorMittal's net loss for 1H 2015 was $549 million, or $0.31 loss per share,
as compared to net loss for 1H 2014 of $153 million, or $0.09 loss per share.
Analysis of results for 2Q 2015 versus 1Q 2015 and 2Q 2014
Total steel shipments for 2Q 2015 were 2.7% higher at 22.2 million metric tonnes
as compared with 21.6 million metric tonnes for 1Q 2015, and 3.4% higher as
compared to 21.5 million metric tonnes for 2Q 2014.
Sales for 2Q 2015 were $16.9 billion as compared to $17.1 billion for 1Q 2015
and $20.7 billion for 2Q 2014. Sales in 2Q 2015, were 1.3% lower as compared to
1Q 2015 primarily due to lower average steel selling prices (-5%) and lower iron
ore reference prices (-6.4%), partially offset by higher steel shipments (+2.7%)
and seasonally higher market priced iron ore shipments (+15.3%). Sales in
2Q 2015 were 18.4% lower as compared to 2Q 2014 due to lower average steel
selling prices (-20.5%) and lower iron ore references prices (-43%), offset in
part by higher steel shipments (+3.4%) and higher market priced iron ore
shipments (+2.7%).
Depreciation remained stable at $801 million for 2Q 2015 as compared to $807
million in 1Q 2015, and was lower as compared to $931 million for 2Q 2014,
primarily on account of foreign exchange impact due to depreciation of all major
currencies (Brazilian real, Euro and Canadian dollar) against the US dollar.
Impairment charges for 2Q 2015 were $19 million relating to the closure of the
Georgetown facility in the US, compared to nil in both 1Q 2015 and 2Q 2014.
Operating income for 2Q 2015 was $579 million, as compared to $571 million in
1Q 2015 and $832 million in 2Q 2014. Operating results for 1Q 2015 were
negatively impacted by a $69 million provision primarily related to onerous hot
rolled and cold rolled contracts in the US (NAFTA). Operating results for
2Q 2014 included a $90 million charge following the settlement of US antitrust
litigation.
Income from investments in associates, joint ventures and other investments in
2Q 2015 was $125 million as compared to a loss in 1Q 2015 of $2 million.
2Q 2015 includes the annual dividend received from Erdemir and improved
performance by Spanish investees. 1Q 2015 was negatively impacted by foreign
exchange effects on various investees. Income from investments, associates,
joint ventures and other investments in 2Q 2014 of $118 million mainly included
the annual dividend received from Erdemir.
Net interest expense (including interest expense and interest income) in
2Q 2015 was stable at $325 million as compared to $323 million in 1Q 2015, and
lower as compared to $383 million in 2Q 2014.
Foreign exchange and other net financing costs were $73 million for 2Q 2015 as
compared to $756 million for 1Q 2015 and $327 million for 2Q 2014. Foreign
exchange and other net financing costs for 2Q 2015 include a foreign exchange
gain of $115 million as compared to a loss of $538 million for 1Q 2015 mainly on
account of USD depreciation of 4% against the Euro (versus 11.4% appreciation in
1Q 2015) and 3.4% depreciation against BRL (versus 17.2% appreciation in
1Q 2015). This foreign exchange gain is largely non-cash and primarily relates
to the gain from the impact of the USD depreciation on Euro denominated deferred
tax assets, partially offset by foreign exchange loss on euro debt. Foreign
exchange and other net financing costs for 2Q 2014 include non-cash gains and
losses on convertible bonds and hedging instruments which matured during the
quarter.
ArcelorMittal recorded income tax expense of $124 million for 2Q 2015, as
compared to an income tax expense of $210 million for 1Q 2015 and income tax
expense of $156 million for 2Q 2014.
Non-controlling interests for 2Q 2015 and 1Q 2015 represent a charge primarily
related to minority shareholders' share of net income recorded in ArcelorMittal
Mines Canada and Belgo Bekaert Arames in Brazil. Non-controlling interest
charges for 2Q 2014 primarily related to minority shareholders' share of net
income recorded in ArcelorMittal Mines Canada, partially offset by losses
generated in ArcelorMittal South Africa.
ArcelorMittal recorded net income for 2Q 2015 of $179 million, or $0.10 earnings
per share, as compared to a net loss of $728 million, or $0.41 loss per share
for 1Q 2015, and net income of $52 million, or $0.03 earnings per share for
2Q 2014.
Capital expenditure projects
The following tables summarize the Company's principal growth and optimization
projects involving significant capital expenditures.
Completed projects in most recent quarters
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Region / Site Project Capacity / Actual
segment particulars completion
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China Hunan Province VAMA auto steel Capacity of 1Q 2015
JV 1.5mt pickling
line, 1.0mt
continuous
annealing line
and 0.5mt of
hot dipped
galvanizing
auto steel
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USA AM/NS Calvert Continuous Increased 1Q 2015
coating line production of
upgrade to Usibor by
Aluminize line#4 0.1mt / year
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Brazil Juiz de Fora Rebar expansion Increase in 1Q 2015
(Brazil) rebar capacity
by 0.4mt / year
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NAFTA ArcelorMittal Phase 1: Optimize cost 2Q 2015
Dofasco (Canada) Construction of and increase
a heavy gauge shipment of
galvanizing galvanized
line#6 to products by
optimize 0.3mt / year
galvanizing
operations
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Ongoing projects
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Segment Site Project Capacity / Forecast
particulars completion
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NAFTA ArcelorMittal Phase 2: Convert Allow the 2016
Dofasco (Canada) the current galvaline #4 to
galvanizing line produce 160kt for
#4 to a galvalume and
Galvalume line 128kt for
galvanize
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Europe ArcelorMittal HRM extension Increase HRC 2016
Krakow (Poland) capacity by
0.9mt/ year
HDG increase Increasing HDG 2016
capacity by
0.4mt/ year
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Brazil Acindar New rolling mill Increase in 2016
(Argentina) rolling capacity
by 0.4mt / year
for bars for
civil
construction
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Mining Liberia Phase 2 Increase Initial forecast
expansion production of 2015 /
project capacity to Currently
15mt/ year (high delayed((a))
grade sinter
feed)
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Brazil ArcelorMittal Vega Expansion Increase hot On hold
Do Sul (Brazil) project dipped
galvanizing (HDG)
capacity by
0.6mt / year and
cold rolling (CR)
capacity by
0.7mt / year
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Brazil Monlevade (Brazil) Wire rod Increase in On hold((b))
production capacity of
expansion finished products
by 1.1mt / year
Juiz de Fora Meltshop Increase in On hold((b))
(Brazil) expansion meltshop
capacity by
0.2mt / year
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Brazil Monlevade (Brazil) Sinter plant, Increase in On hold
blast furnace liquid steel
and meltshop capacity by
1.2mt / year;
Sinter feed
capacity of
2.3mt / year
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Joint venture projects
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Region Site Project Capacity / Forecast
particulars completion
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Canada Baffinland Early revenue Production capacity 2H 2015
phase 3.5mt/ year (iron
ore)
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USA AM/NS Calvert Slab yard Increase coil 2H 2016
expansion production level up
to 5.3mt/year
coils.
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a) The Liberia phase 2 project to invest $1.7 billion to construct 15 million
tonnes of concentrate capacity and associated infrastructure has been
delayed. This follows the contractor's declaration of force majeure on
August 8, 2014 due to the Ebola virus outbreak in West Africa. Given the
project delays and recent deterioration of iron ore prices, the Company is
assessing its options to progress with this project. ArcelorMittal remains
fully committed to Liberia. Phase 1 operations are continuing as normal at
this time and to date have not been affected by the Ebola situation in
Liberia.
b) Though the Monlevade wire rod expansion project and Juiz de Fora meltshop
expansion are expected to be completed in 2H 2015 and 2016 respectively,
the Company does not expect to increase shipments until domestic demand
improves.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 4,545 4,777 5,423 9,322 10,351
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EBITDA 225 53 177 278 436
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Depreciation 155 156 170 311 359
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Impairments 19 - - 19 -
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Operating income / (loss) 51 (103) 7 (52) 77
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Crude steel production (kt) 5,775 5,908 6,153 11,683 12,409
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Steel shipments (kt) 5,642 5,463 5,790 11,105 11,403
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Average steel selling price (US$/t) 726 796 856 760 848
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NAFTA segment crude steel production declined 2.3% to 5.8 million tonnes in
2Q 2015 as compared to 5.9 million tonnes for 1Q 2015.
Steel shipments in 2Q 2015 increased by 3.3% to 5.6 million tonnes as compared
to 1Q 2015, primarily driven by a seasonal 2.3% increase in flat product steel
shipments and a 5.1% increase in long product shipment volumes.
Sales in 2Q 2015 decreased by 4.9% to $4.5 billion as compared to 1Q 2015, due
to lower average steel selling prices (-8.8%) offset in part by higher steel
shipments as discussed above. Average steel selling price for flat products and
long products declined -8.8% and -6.9%, respectively.
EBITDA in 2Q 2015 increased to $225 million as compared to $53 million in
1Q 2015. EBITDA for 1Q 2015 was negatively impacted by a $69 million provision
primarily related to onerous hot rolled and cold rolled contracts in the US.
EBITDA in 2Q 2015 was higher as compared to 1Q 2015 due to lower costs
(including the benefit of inventory written-down in 1Q 2015) and higher steel
shipment volumes, offset in part by lower average steel selling prices.
EBITDA in 2Q 2014 included a $90 million charge following the settlement of
antitrust litigation in the United States and the residual costs resulting from
the severe weather disruption in United States during 1Q 2014. EBITDA in
2Q 2015 improved year-on-year due to non-recurrence of the above mentioned items
but was severely impacted by lower average steel selling prices (-15.2%) and
lower steel shipments (-2.6%).
Brazil
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 2,167 2,119 2,431 4,286 4,787
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EBITDA 360 377 414 737 839
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Depreciation 85 86 109 171 247
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Operating income 275 291 305 566 592
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Crude steel production (kt) 2,934 2,875 2,382 5,809 4,795
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Steel shipments (kt) 2,835 2,707 2,312 5,542 4,637
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Average steel selling price (US$/t) 695 713 934 704 914
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Brazil segment crude steel production was stable at 2.9 million tonnes in
2Q 2015 and 1Q 2015.
Steel shipments in 2Q 2015 increased by 4.7% to 2.8 million tonnes as compared
to 1Q 2015, primarily driven by increased slab exports from Brazil and higher
tubular shipment volumes.
Sales in 2Q 2015 increased by 2.2% to $2.2 billion as compared to 1Q 2015, due
to higher steel shipments as discussed above, offset in part by lower average
steel selling prices (-2.5%).
EBITDA in 2Q 2015 declined by 4.7% to $360 million as compared to $377 million
in 1Q 2015. EBITDA declined on account of lower average steel selling prices
offset partially by higher steel shipment volumes and the improvement in our
tubular operations.
EBITDA in 2Q 2015 was lower as compared to 2Q 2014 by 13.2% due to lower average
steel selling prices (-25.6%) offset in part by higher steel shipments (+22.6%)
following the restart of the furnace in Tubarao, Brazil, in July 2014.
Europe
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 8,547 8,600 10,518 17,147 20,840
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EBITDA 680 616 689 1,296 1,224
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Depreciation 293 299 355 592 810
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Operating income 387 317 334 704 414
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Crude steel production (kt) 11,644 11,341 10,941 22,985 21,840
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Steel shipments (kt) 10,895 10,662 10,191 21,557 20,200
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Average steel selling price (US$/t) 617 633 799 625 804
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Europe segment crude steel production increased by 2.7% to 11.6 million tonnes
in 2Q 2015, as compared to 1Q 2015.
Steel shipments in 2Q 2015 increased by 2.2% to 10.9 million tonnes as compared
to 1Q 2015, primarily due to 9.7% increase in long product shipment volumes
benefiting from seasonality and improved demand.
Sales in 2Q 2015 remained stable at $8.5 billion as compared to 1Q 2015, with
lower average steel selling prices (-2.5%), being offset by higher steel
shipments as discussed above. Average steel selling prices for flat and long
products decreased by 2.1% and 1.9%, respectively, largely due to exchange rate
effects. Local average steel prices declined marginally, partially reflecting
lower raw material costs.
EBITDA in 2Q 2015 increased by 10.5% to $680 million as compared to $616 million
in 1Q 2015, reflecting improved market conditions offset in part by negative
translation impacts.
EBITDA in 2Q 2015 was 1.3% lower than 2Q 2014 primarily on account of
translation loss. EBITDA in Euro terms increased by 22.7% reflecting improved
steel shipment volumes (+6.9%) as well as the benefits of cost optimization
efforts.
ACIS[4]
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 1,649 1,721 2,300 3,370 4,307
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EBITDA 88 133 156 221 265
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Depreciation 106 108 131 214 260
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Operating income / (loss) (18) 25 25 7 5
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Crude steel production (kt) 3,696 3,603 3,600 7,299 7,013
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Steel shipments (kt) 3,205 3,006 3,306 6,211 6,493
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Average steel selling price (US$/t) 450 507 592 477 580
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ACIS segment crude steel production in 2Q 2015 increased by 2.6% to 3.7 million
tonnes as compared to 1Q 2015 driven by higher production in Kazakhstan offset
in part by lower production in South Africa on account of weak domestic market
conditions.
Steel shipments in 2Q 2015 increased by 6.6% to 3.2 million metric tonnes as
compared to 1Q 2015, primarily due to seasonally higher shipments in our CIS
operations offset in part by lower volumes in South Africa as explained above.
Sales in 2Q 2015 decreased by 4.2% to $1.6 billion as compared to 1Q 2015. This
decrease was primarily due to lower average steel selling prices (-11.3%) offset
in part by higher steel shipment volumes. Average steel selling prices were
lower in Ukraine (-5.9%) and Kazakhstan (-8.6%) impacted by weaker CIS prices,
and in South Africa (-12.7%).
EBITDA in 2Q 2015 decreased by 33.8% to $88 million as compared to $133 million
in 1Q 2015, due to lower average steel selling prices partially offset by higher
volumes in the CIS operations and continued cost reduction efforts.
EBITDA in 2Q 2015 was 43.4% lower as compared to 2Q 2014 primarily due to lower
average steel selling prices (-24%) and lower steel shipments (-3.1%). EBITDA
declined primarily in our CIS operations.
Mining
(USDm) unless otherwise shown 2Q 15 1Q 15 2Q 14 1H 15 1H 14
Sales 964 758 1,383 1,722 2,639
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EBITDA 115 114 388 229 821
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Depreciation 157 150 155 307 314
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Operating income / (loss) (42) (36) 233 (78) 507
-------------------------------------------------------------------------------
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Own iron ore production ((a) )(Mt) 16.4 15.6 16.6 31.9 31.4
-------------------------------------------------------------------------------
Iron ore shipped externally and internally at 10.8 9.4 10.5 20.1 19.8
market price ((b) )(Mt)
-------------------------------------------------------------------------------
Iron ore shipment - cost plus basis (Mt) 6.4 4.1 6.2 10.5 10.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Own coal production((a) )(Mt) 1.5 1.6 1.8 3.1 3.6
-------------------------------------------------------------------------------
Coal shipped externally and internally at 0.7 0.6 1.1 1.3 2.1
market price((b) )(Mt)
-------------------------------------------------------------------------------
Coal shipment - cost plus basis (Mt) 0.9 0.8 0.8 1.7 1.6
-------------------------------------------------------------------------------
(a) Own iron ore and coal production not including strategic long-term
contracts
(b) Iron ore and coal shipments of market-priced based materials include the
Company's own mines, and share of production at other mines, and exclude
supplies under strategic long-term contracts
Own iron ore production (not including supplies under strategic long-term
contracts) in 2Q 2015 increased by 5.1% to 16.4 million metric tonnes as
compared to 1Q 2015 on account of seasonally higher production in Canada. Own
iron ore production (not including supplies under strategic long-term contracts)
was 1.3% lower than 2Q 2014 primarily due to lower production in Liberia and
Brazil partially offset by higher production in Canada due to efficiency gains.
Market priced iron ore shipments in 2Q 2015 increased by 15.3% to 10.8 million
metric tonnes as compared to 1Q 2015 driven by seasonally improved shipments in
Canada offset in part by lower Liberia shipments. Market priced iron ore
shipments in 2Q 2015 increased by 2.7% as compared to 2Q 2014 driven by Canada
following operational efficiency gains offset in part by lower Brazil and
Liberian shipments.
Own coal production (not including supplies under strategic long-term contracts)
in 2Q 2015 decreased 3.0% to 1.5 million metric tonnes as compared to 1Q 2015,
primarily due to lower production in Kazakhstan. Own coal production (not
including supplies under strategic long-term contracts) in 2Q 2015 decreased
14.3% as compared to 2Q 2014, primarily due to lower production at US operations
and the disposal of the Kuzbass coal mines in Russia during the fourth quarter
of 2014.
EBITDA in 2Q 2015 increased marginally to $115 million as compared to $114
million in 1Q 2015 primarily due to higher market priced iron ore shipment
volumes and improved cost performance offset in part by lower seaborne iron ore
market prices (-6.4%).
EBITDA in 2Q 2015 was 70.3% lower as compared to 2Q 2014, primarily due to lower
seaborne iron ore market prices (-43%), partially offset by higher market priced
iron ore shipment volumes (+2.7%), lower cost (unit iron ore cash costs down
14% year-on-year) and restructuring of our coal operations, including the sale
of Kuzbass mines.
Liquidity and Capital Resources
For 2Q 2015, net cash provided by operating activities was $1,019 million, as
compared to net cash used in operating activities of $915 million in 1Q 2015.
Cash provided by operating activities in 2Q 2015 included a $392 million release
of operating working capital as compared to a $1,206 million investment in
operating working capital in 1Q 2015. Rotation days during 2Q 2015 increased to
55 days as compared to 54 days in 1Q 2015.
Net cash used in other operating activities in 2Q 2015 was $445 million
(including several items such as income from associates, joint ventures and
other investments, employee remuneration, income taxes and VAT). This compares
to net cash provided by other operating activities in 1Q 2015 of $119 million
and net cash used in other operating activities in 2Q 2014 of $384 million.
Net cash used in investing activities during 2Q 2015 was $419 million as
compared to net cash used in investing activities during 1Q 2015 of $456
million. Capital expenditure decreased to $542 million in 2Q 2015 as compared to
$745 million in 1Q 2015. The Company expects FY 2015 capital expenditures to be
approximately $3.0 billion.
Cash flow from other investing activities in 2Q 2015 of $123 million primarily
included a $47 million inflow from cash received from the Kiswire divestment[5]
and proceeds related to the sale of certain European distribution assets. Cash
flow from other investing activities in 1Q 2015 of $289 million primarily
included a $108 million inflow from the exercise of the fourth put option on
Hunan Valin shares[6], cash received from the Kiswire divestment(5) and proceeds
from the sale of tangible assets. Cash flow from other investing activities in
2Q 2014 of $167 million primarily included cash inflow from the divestures of
ATIC[7] group and Kiswire divestment(5).
Net cash provided by financing activities for 2Q 2015 was $1,284 million as
compared to net cash provided by financing activities of $313 million for
1Q 2015. Net proceeds from financing of $1.6 billion in 2Q 2015 includes the
inflow of $1.0 billion relating to the proceeds from the issuance of two series
of US dollar denominated notes, ($500 million aggregate principal amount of its
5.125% notes due 2020 and $500 million aggregate principal amount of its 6.125%
notes due 2025). There were additional proceeds of $963 million from the
issuance of ?400 million Floating Rate Notes due April 9, 2018, and ?500 million
3.00% Notes due April 9, 2021, issued under the Company's Euro Medium Term Notes
Programme, offset in part by the repayment of $332 million short term financing.
Net cash provided by financing activities for 1Q 2015 includes inflows related
to issuance of $877 million (?750 million) 3.125% Notes due January 14, 2022,
under the Company's Euro Medium Term Notes Programme, $339 million of short term
financing and proceeds from a 4-year ?75 million term loan, offset in part by a
repayment of a $1.0 billion loan.
During 2Q 2015, the Company paid $331 million in dividends to ArcelorMittal
shareholders. During 1Q 2015, the Company paid $53 million in dividends
primarily to minority shareholders in ArcelorMittal Mines Canada.
At June 30, 2015, the Company's cash and cash equivalents (including restricted
cash and short-term investments) amounted to $4.7 billion as compared to $2.8
billion at March 31, 2015.
Gross debt of $21.3 billion at June 30, 2015, increased from $19.4 billion at
March 31, 2015 and was lower than $21.8 billion at June 30, 2014. Gross debt was
higher at June 30, 2015 due to the issuances in April 2015 and June 2015 as
detailed above.
As of June 30, 2015, net debt remained stable at $16.6 billion as compared with
March 31, 2015, primarily driven by positive free cash flow of $0.5 billion,
offset by forex effects ($0.2 billion) and dividends ($0.3 billion).
During the second quarter of 2015 the Company signed a $6 billion Revolving
Credit Facility (incorporating $2.5 billion three year and $3.5 billion five
year tranches). The Facility replaced the $2.4 billion revolving credit facility
agreement dated May 6, 2010 and the $3.6 billion revolving credit facility
agreement dated March 18, 2011. The Facility gives ArcelorMittal improved terms
over the former facilities, and extends the average maturity date by
approximately two years. The $6 billion credit facility contains a financial
covenant of 4.25x Net debt / EBITDA.
The Company had liquidity of $10.7 billion at June 30, 2015, consisting of cash
and cash equivalents (including restricted cash and short-term investments) of
$4.7 billion and $6.0 billion of available credit lines. On June 30, 2015, the
average debt maturity was 6.3 years.
Key recent developments
* On July 13, 2015, ArcelorMittal, LanzaTech, the carbon recycling company,
and Primetals Technologies, a leading technology and service provider to the
iron and steel industry announced they have entered into a letter of intent
to construct Europe's first-ever commercial scale production facility to
create bioethanol from waste gases produced during the steelmaking process.
The resulting use of bioethanol can cut greenhouse gas emissions by over 80
per cent compared with conventional fossil fuels. Construction of the ?87
million flagship pilot project, which will be located at ArcelorMittal's
steel plant in Ghent, Belgium, is anticipated to commence later this year,
with bioethanol production expected to start mid-2017.
* On July 10, 2015, ArcelorMittal announced that Simon Wandke has been
nominated Executive Vice President of ArcelorMittal and promoted to Chief
Executive Officer of ArcelorMittal Mining, with immediate effect. Simon
replaces Bill Scotting, who is leaving the company to pursue other
opportunities.
* On July 7, 2015, ArcelorMittal Poland announced it will restart preparations
for the relining of blast furnace No. 5 in Krakow, which is coming to the
end of its lifecycle in mid-2016. Total investments in the primary
operations in the Krakow plant will amount to PLN 200 million (more than ?40
million), which also includes modernization of the basic oxygen furnace No.
3. Additional projects in the downstream operations will also be
implemented. These include the extension of the hot rolling mill capacity by
0.9 million tons per annum and increasing the hot dip galvanizing capacity
by 0.4 million tons per annum. The value of those two projects exceeds PLN
300 million (?90 million) in total. In total, the group will invest more
than PLN 500 million (more than ?130 million) in its operations in Krakow,
including both upstream and downstream installations.
* On July 3, 2015, ArcelorMittal announced the issuance of CHF 225 million
2.50%. Notes due 3 July 2020 (the "Notes"). The Notes were issued under
ArcelorMittal's ?6 billion wholesale Euro Medium Term Notes Programme,
pursuant to a separate Swiss Prospectus. The proceeds of the issuance will
be used to repay or prepay existing indebtedness.
* On July 2, 2015, ArcelorMittal redeemed its $1 billion 4.5% Unsecured Notes
due August 5, 2015, prior to their scheduled maturity for a total amount of
$1,022 million, including premium and accrued interest.
* On July 1, 2015, ArcelorMittal was recognized as a premium supplier to the
automotive industry, receiving awards from PSA Peugeot Citroën and Dana
Reinz for its breakthrough products and service. The Company was named best
supplier in global carmaker PSA Peugeot Citroën's "Value Creation" category
at its 2015 Best Supplier Awards. The accolade recognizes the introduction
of ArcelorMittal's Fortiform® family of high-strength steels for cold
stamping, which has enabled the carmaker to reuse its existing conventional
stamping presses while achieving weight savings of between 10 and 20
percent.
* On May 27, 2015, ArcelorMittal completed the pricing of two series of US
dollar denominated notes, consisting of $500 million aggregate principal
amount of its 5.125% notes due 2020 and $500 million aggregate principal
amount of its 6.125% notes due 2025. ArcelorMittal will use the net proceeds
(after fees and expenses) to repay existing indebtedness in particular the
early redemption (through the exercise of the make-whole option) of bonds
maturing in August 2015.
* On May 22, 2015, ArcelorMittal and the Steel Authority of India Limited
('SAIL'), India's leading steel company, signed a Memorandum of
Understanding ('MoU') to set up an automotive steel manufacturing facility
under a Joint Venture ('JV') arrangement in India. The MoU is the first
step of a process to establish a JV between the two companies. The proposed
JV will construct a state-of-the-art cold rolling mill and other downstream
finishing facilities in India that will offer technologically advanced steel
products to India's rapidly growing automotive sector.
Outlook and guidance
Based on the current economic outlook, ArcelorMittal expects global apparent
steel consumption ("ASC") to be stable in 2015 as compared to 2014.
ArcelorMittal expects the pick-up in European manufacturing activity to continue
and support ASC growth of approximately +1.5% to +2.5% in 2015. Whilst
underlying demand continues to expand in the US, due to the destock that
occurred during the first six months of the year, ASC is expected to decline by
-3% to -4% in 2015; nevertheless, ASC in the US in the 2H 2015 is expected to be
approximately +2% to +3% above the 1H 2015 level. The outlook for emerging
markets remains weak and we have revised our ASC forecasts accordingly: In
Brazil, particularly due to a weaker construction market, ASC is expected to
decline by -11% to -13%; for the CIS we expect a decline in ASC of -8% to -10%.
In China, we see signs of stabilization due to the government's targeted
stimulus, however the real estate market remains weak and we expect a slight
decline of up to -1% in apparent steel consumption in 2015. While risks remain
to the global demand picture, given ArcelorMittal's specific geographical and
end market exposures, the Company expects its steel shipments to increase by
between +3% to +5% in 2015 as compared to 2014.
Assuming current market conditions persist into 2H 2015, and given an
improvement is expected in the US due to the ongoing end of destocking and
improved Calvert operations, as well as actions taken to improve the cost base,
the Company's guidance for 2015 remains unchanged and we continue to expect
2015 EBITDA to be within the range of $6.0 - $7.0 billion. Furthermore, the
Company expects 2015 capital expenditures of approximately $3.0 billion and
2015 net interest expense of approximately $1.4 billion.
Importantly, the Company continues to expect positive free cash flow in 2015 and
to achieve progress towards the medium term net debt target of $15 billion.
ArcelorMittal Condensed Consolidated Statements of Financial Position(1)
Jun 30, Mar 31, Dec 31,
In millions of U.S. dollars 2015 2015 2014
-------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------
Cash and cash equivalents including restricted 4,712 2,779 4,016
cash
-------------------------------------------------------------------------------
Trade accounts receivable and other 4,283 4,253 3,696
-------------------------------------------------------------------------------
Inventories 15,466 15,537 17,304
-------------------------------------------------------------------------------
Prepaid expenses and other current assets 2,402 2,492 2,627
-------------------------------------------------------------------------------
Assets held for sale[8] 24 - 414
-------------------------------------------------------------------------------
Total Current Assets 26,887 25,061 28,057
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Goodwill and intangible assets 7,279 7,104 8,104
-------------------------------------------------------------------------------
Property, plant and equipment 42,648 41,694 46,593
-------------------------------------------------------------------------------
Investments in associates and joint ventures 5,532 5,394 5,833
-------------------------------------------------------------------------------
Deferred tax assets 7,214 6,982 7,962
-------------------------------------------------------------------------------
Other assets 2,372 2,282 2,630
-------------------------------------------------------------------------------
Total Assets
Unternehmensinformation / Kurzprofil:
Datum: 31.07.2015 - 07:01 Uhr
Sprache: Deutsch
News-ID 410627
Anzahl Zeichen: 65585
contact information:
Town:
London
Kategorie:
Business News
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"ArcelorMittal reports second quarter 2015 and half year 2015 results"
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