ArcelorMittal reports third quarter 2015 and nine months 2015 results
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports third quarter 2015 and nine months 2015 results
. Processed and transmitted by NASDAQ OMX Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, November 6, 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 nine month periods ended September 30, 2015.
Highlights:
* Health and safety: LTIF rate of 0.78x in 3Q 2015, comparable to 3Q 2014
levels
* EBITDA of $1.4 billion in 3Q 2015, stable compared with 2Q 2015
* Steel shipments of 21.1Mt in 3Q 2015, 2.1% lower YoY; Steel shipments of
64.8Mt in 9M 2015, up 1.4% YoY
* 3Q 2015 own iron ore production of 15.4 Mt, down 2.9% YoY; 10.3Mt iron ore
shipped and reported at market prices, an increase of 3.1% YoY
* 9M 2015 own iron ore production of 47.3 Mt, stable YoY; 30.5Mt iron ore
shipped and reported at market prices, an increase of 2.0% YoY
* 9M 2015 iron ore unit cash costs reduced by 17% YoY, exceeding the 15%
target for 2015
* Net loss of $0.7 billion in 3Q 2015 including $0.5 billion exceptional
charge related to the write-down of inventory following the rapid decline of
international steel prices[2]
* Liquidity at $9.6 billion remains strong as of September 30, 2015
* Net debt of $16.8 billion as of September 30, 2015 compared to $16.6 billion
as of June 30, 2015 due largely to seasonal working capital investments
($0.1 billion); Net debt lower by $1.0 billion as compared to September
30, 2014
Outlook and guidance:
* Operating conditions have deteriorated in recent months, both in terms of
the international steel price environment (driven by unsustainably low
export prices from China) and order volumes (as customers adopt a "wait and
see" mind-set). As a result, the Company now expects full year 2015 EBITDA
of $5.2-$5.4 billion.
* Full year 2015 capital expenditure is expected to be approximately $2.8
billion as compared to previous guidance of approximately $3.0 billion; net
interest expense is expected to be approximately $1.3 billion from previous
guidance of approximately $1.4 billion. The Company continues to expect
positive free cash flow generation in 2015 and to end the year with net debt
below $15.8 billion.
Key developments supporting outlook:
* A combination of Company actions and known developments are expected to
improve EBITDA in 2016 by $1 billion relative to the 4Q 2015 run-rate level.
More specifically by region:
* Americas: uplift from ramp-up of Calvert and improved value-added mix;
benefits of Americas Asset Optimization Program and Brazil Value Plan;
* ACIS: improvement driven by new iron ore supply agreement and tariffs in
South Africa, as well as the benefits of new coke battery and increased PCI
usage in CIS;
* Europe: further benefits from transformation programme; and
* Mining: a further >10% reduction in average unit iron ore cash costs.
* In addition, the Company is reducing its cash requirements in 2016 by
approximately $1 billion as compared to 2015. This is achieved through
lower capex spend, lower cash interest costs, lower cash taxes and
suspending the dividend for the financial year 2015.
* These actions and developments are expected to ensure that the Company
continues to generate positive free cash flow, reduce net debt and maintain
strong liquidity.
Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 15,589 16,890 20,067 49,597 60,559
-------------------------------------------------------------------------------
EBITDA 1,351 1,399 1,905 4,128 5,422
-------------------------------------------------------------------------------
Operating income 20 579 959 1,170 2,465
-------------------------------------------------------------------------------
Net (loss) / income attributable to equity (711) 179 22 (1,260) (131)
holders of the parent
-------------------------------------------------------------------------------
Basic (loss) / income per share (US$) (0.40) 0.10 0.01 (0.70) (0.08)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Own iron ore production (Mt) 15.4 16.4 15.8 47.3 47.2
-------------------------------------------------------------------------------
Iron ore shipped at market price (Mt) 10.3 10.8 10.0 30.5 29.9
-------------------------------------------------------------------------------
Crude steel production (Mt) 23.1 24.0 23.9 70.8 70.0
-------------------------------------------------------------------------------
Steel shipments (Mt) 21.1 22.2 21.5 64.8 63.9
-------------------------------------------------------------------------------
EBITDA/tonne (US$/t) 64 63 89 64 85
-------------------------------------------------------------------------------
Steel-only EBITDA/tonne (US$/t) 57 58 76 58 68
-------------------------------------------------------------------------------
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"Whilst we have delivered stable EBITDA compared with the second quarter, the
already challenging operating conditions have further deteriorated during recent
months, largely due to additional declines in steel prices caused by
exceptionally low Chinese export prices. Our focus is on ensuring we take all
the necessary steps to strengthen our competitiveness in this difficult
environment. Measures we have taken so far are yielding results; costs in our
mining division have reduced by 17% so far in 2015 versus an initial target of
15%, and net debt is $1 billion lower than a year ago. Whilst we expect market
conditions to remain challenging in 2016, we have a number of important programs
underway across the business which will structurally improve EBITDA in 2016 and
we also expect a significant reduction in our cash requirements."
"Whilst we are confident our actions are the right ones, there are also
important issues for governments to address, specifically relating to unfair
trade. We are encouraged by various examples of trade action being initiated in
response to dumping, but the process needs to be faster in order to be fully
effective."
Third quarter 2015 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the
investment community to discuss the third quarter period ended September
30, 2015 on:
-------------------------------------------------------------------------------
Date US Eastern time London CET
-------------------------------------------------------------------------------
Friday November 9.30am 2.30pm 3.30pm
6, 2015
-------------------------------------------------------------------------------
The dial in numbers:
-------------------------------------------------------------------------------
Location Toll free dial in Local dial in numbers Participant
numbers
-------------------------------------------------------------------------------
UK local: 0800 051 5931 +44 (0)203 364 5807 27115744#
-------------------------------------------------------------------------------
US local: 1 86 6719 2729 +1 24 0645 0345 27115744#
-------------------------------------------------------------------------------
US (New York) 1 64 6663 7901 +1 24 0645 0345 27115744#
-------------------------------------------------------------------------------
France: 0800 914780 +33 1 7071 2916 27115744#
-------------------------------------------------------------------------------
Germany: 0800 965 6288 +49 692 7134 0801 27115744#
-------------------------------------------------------------------------------
Spain: 90 099 4930 +34 911 143436 27115744#
-------------------------------------------------------------------------------
Luxembourg: 800 26908 +352 27 86 05 07 27115744#
-------------------------------------------------------------------------------
A replay of the conference call will be available for one week by
dialing:
-------------------------------------------------------------------
Number Language Access code
-------------------------------------------------------------------
+49 (0) English 12473492#
1805 2047 088
-------------------------------------------------------------------
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
-------------------------------------------------------------------------
ArcelorMittal Investor Relations
-------------------------------------------------------------------------
Europe Tel: +352 4792 2652
-------------------------------------------------------------------------
Americas Tel: +1 312 899 3985
-------------------------------------------------------------------------
Retail Tel: +352 4792 3198
-------------------------------------------------------------------------
SRI Tel: +44 207 543 1128
-------------------------------------------------------------------------
Bonds/Credit Tel: +33 1 71 92 10 26
-------------------------------------------------------------------------
-------------------------------------------------------------------------
ArcelorMittal Corporate E-mail: press(at)arcelormittal.com
Communications Tel: +44 0207 629 7988
-------------------------------------------------------------------------
Paul Weigh Tel: +44 203 214 2419
-------------------------------------------------------------------------
Laura Nutt Tel: +44 207 543 1125
-------------------------------------------------------------------------
Isabelle Cornelis Tel: +44 203 214 2453
-------------------------------------------------------------------------
France Image 7 Tel: +33 153 70 94 17
-------------------------------------------------------------------------
United Kingdom Maitland Consultancy Tel: +44 20 7379 5151
-------------------------------------------------------------------------
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, deteriorated to 0.78x in the third
quarter of 2015 ("3Q 2015") as compared to 0.68x for the second quarter of 2015
("2Q 2015") and remained stable as compared to 0.78x for the third quarter of
2014 ("3Q 2014"). With the exception of the European segment, health and safety
performance deteriorated across all segments during 3Q 2015.
Health and safety performance was improved at 0.80x in the nine months of 2015
("9M 2015") as compared to 0.84x for the first nine months of 2014 ("9M 2014"),
with improvements within Brazil and Europe, offset by deterioration in the
Mining and ACIS 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
--------------------------------------------------------------------------
Lost time injury frequency rate 3Q 15 2Q 15 3Q 14 9M 15 9M 14
--------------------------------------------------------------------------
Mining 0.99 0.57 0.29 0.73 0.47
--------------------------------------------------------------------------
--------------------------------------------------------------------------
NAFTA 0.99 0.71 1.03 1.02 1.02
--------------------------------------------------------------------------
Brazil 0.57 0.42 0.98 0.58 0.81
--------------------------------------------------------------------------
Europe 0.88 0.97 1.00 0.99 1.16
--------------------------------------------------------------------------
ACIS 0.52 0.39 0.52 0.52 0.50
--------------------------------------------------------------------------
Total Steel 0.75 0.69 0.87 0.81 0.91
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Total (Steel and Mining) 0.78 0.68 0.78 0.80 0.84
--------------------------------------------------------------------------
Key corporate responsibility highlights for 3Q 2015:
* ArcelorMittal, LanzaTech and Primetals Technologies announced a partnership
to construct a breakthrough ?87 million biofuel production facility.
ArcelorMittal's plant in Ghent has been chosen for the construction of the
flagship plant.
* Continued excellence in R&D: ArcelorMittal reveals a prototype for a house-
of-the-future forged from steel. The housing prototype presents an
alternative approach to construction that generates less waste, improves the
safety of construction workers, and produces cutting-edge buildings
compliant with the latest safety and energy-efficiency regulation.
* ArcelorMittal recognized by the Clinton Global Initiative for its swift,
collaborative, and effective response to the Ebola crisis in West Africa.
Analysis of results for the nine months ended September 30, 2015 versus results
for the nine months ended September 30, 2014
Total steel shipments for 9M 2015 were 1.4% higher at 64.8 million metric tonnes
as compared with 63.9 million metric tonnes for 9M 2014.
Sales for 9M 2015 decreased by 18.1% to $49.6 billion as compared with $60.6
billion for 9M 2014, primarily due to lower average steel selling prices (-
18.9%) and lower seaborne iron ore prices (-43.8%), slightly offset by higher
steel shipments (+1.4%) and higher market priced iron ore shipments (+2.0%).
Depreciation of $2.4 billion for 9M 2015 was lower as compared to $3.0 billion
for 9M 2014 primarily due to the impact of depreciation of all major currencies
(Brazilian real, Euro, Canadian dollar, Ukrainian hryvnia and Kazakhstan tenge)
against the US dollar. Full year 2015 depreciation is expected to be
approximately $3.2 billion (down from the previous guidance of $3.5 billion) as
compared to $3.9 billion in 2014.
Impairment charges for 9M 2015 were $46 million including $27 million relating
to closure of Vereeniging meltshop in South Africa and $19 million relating to
the closure of the Georgetown facility in the US. Impairment charges for
9M 2014 were nil.
Exceptional charges for 9M 2015 were $527 million including $0.5 billion related
to the write-down of inventory following the rapid decline of international
steel prices and also includes $27 million of retrenchment costs in South
Africa. Exceptional charges for 9M 2014 were nil.
Operating income for 9M 2015 was $1.2 billion as compared to $2.5 billion in
9M 2014. Operating results for 9M 2015 were negatively impacted by a $69 million
provision primarily related to onerous hot rolled and cold rolled contracts in
the US (NAFTA) and exceptional charges discussed above. Operating results for
9M 2014 were negatively impacted by a $90 million charge following the
settlement of US antitrust litigation (NAFTA).
Income from investments in associates, joint ventures and other investments in
9M 2015 was lower at $153 million as compared to income in 9M 2014 of $208
million, primarily due to weaker performance of Chinese investees offset in part
by income generated from the share swap with respect to Gerdau, Brazil[3].
Net interest expense was lower at $966 million in 9M 2015 as compared to $1,147
million in 9M 2014. The reduction is attributable to both lower gross debt
outstanding and lower average cost. Due to these savings the Company expects
full year 2015 net interest expense of approximately $1.3 billion (down from the
previous guidance of $1.4 billion).
Foreign exchange and other net financing costs were $1,238 million for 9M 2015
as compared to costs of $1,364 million for 9M 2014. Foreign exchange and other
net financing costs for 9M 2015 include foreign exchange loss of $593 million as
compared to a loss of $304 million for 9M 2014, mainly on account of USD
appreciation of 7.7% against the Euro (versus 8.8% appreciation in 9M 2014), a
33.1% appreciation against BRL (versus 4.4% appreciation in 9M 2014) and a
32.6% devaluation of the tenge currency in Kazakhstan[4]. 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. Foreign exchange and other net financing costs for
9M 2014 include expenses related to the termination of the Senegal greenfield
project[5], non-cash gains and losses on convertible bonds and hedging
instruments that matured during the period as well as charges related to the
federal tax amnesty plan in Brazil linked with the Siderbras case[6].
ArcelorMittal recorded an income tax expense of $461 million for 9M 2015 as
compared to an income tax expense of $196 million for 9M 2014.
Non-controlling interests for 9M 2015 were an income of $82 million, as compared
to a charge of $97 million for 9M 2014. Non-controlling interests for 9M 2015
primarily related to losses generated by ArcelorMittal South Africa. Non-
controlling interests for 9M 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 9M 2015 was $1.3 billion, or $0.70 loss per share,
as compared to net loss for 9M 2014 of $131 million, or $0.08 loss per share.
Analysis of results for 3Q 2015 versus 2Q 2015 and 3Q 2014
Total steel shipments for 3Q 2015 were 5.0% lower at 21.1 million metric tonnes
as compared with 22.2 million metric tonnes for 2Q 2015 primarily due to a
seasonal slowdown in Europe, and 2.1% lower as compared to 21.5 million metric
tonnes for 3Q 2014 primarily due to lower volumes in NAFTA (-4.2%).
Sales for 3Q 2015 were $15.6 billion as compared to $16.9 billion for 2Q 2015
and $20.1 billion for 3Q 2014. Sales in 3Q 2015, were 7.7% lower as compared to
2Q 2015 primarily due to lower average steel selling prices (-3.3%), lower steel
shipments (-5.0%), lower iron ore reference prices (-6.1%) and lower market
priced iron ore shipments (-4.4%). Sales in 3Q 2015 were 22.3% lower as compared
to 3Q 2014 due to lower average steel selling prices (-20.9%), lower steel
shipments (-2.1%) and lower iron ore references prices (-39.1%), offset in part
by higher market priced iron ore shipments (+3.1%).
Depreciation was lower at $777 million for 3Q 2015 as compared to $801 million
in 2Q 2015, and was lower as compared to $946 million for 3Q 2014, primarily on
account of foreign exchange impact following the depreciation of major
currencies against the US dollar.
Impairment charges for 3Q 2015 were $27 million relating to the closure of
Vereeniging meltshop in South Africa. Impairment charges for 2Q 2015 were $19
million relating to the closure of the Georgetown facility in the US. Impairment
charges for 3Q 2014 were nil.
Exceptional charges for 3Q 2015 were $527 million, including $0.5 billion
related to the write-down of inventory following the rapid decline of
international steel prices and also includes $27 million of retrenchment costs
in South Africa. Exceptional charges for 2Q 2015 and 3Q 2014 were nil.
Operating income for 3Q 2015 was $20 million, as compared to $579 million in
2Q 2015 and $959 million in 3Q 2014.
Income from investments in associates, joint ventures and other investments for
3Q 2015 was lower at $30 million as compared to income in 2Q 2015 of $125
million primarily due to weaker performance from Chinese investees offset in
part by income generated from the share swap in Gerdau, Brazil. 2Q 2015 income
includes the annual dividend received from Erdemir. Income from investments,
associates, joint ventures and other investments in 3Q 2014 was $54 million.
Net interest expense in 3Q 2015 were in line at $318 million as compared to $325
million in 2Q 2015, and lower as compared to $338 million in 3Q 2014.
Foreign exchange and other net financing costs were $409 million for 3Q 2015 as
compared to $73 million for 2Q 2015 and $657 million for 3Q 2014. Foreign
exchange and other net financing costs for 3Q 2015 include a foreign exchange
loss of $170 million as compared to a gain of $115 million for 2Q 2015 mainly on
account of 21.9% appreciation of the USD against BRL (versus 3.4% depreciation
in 2Q 2015) and stable USD/Euro (versus 4% depreciation in 2Q 2015) and a 31.1%
devaluation of tenge currency in Kazakhstan(4). Foreign exchange and other net
financing costs for 3Q 2014 were negatively impacted by $315 million foreign
exchange losses, primarily driven by the net impact of 7.9% USD appreciation on
deferred tax assets partially offset by its impact on Euro denominated debt
positions. In addition, 3Q 2014 included $161 million expenses related to a
federal tax amnesty plan in Brazil linked with Siderbras case settled during the
3Q 2014(6).
ArcelorMittal recorded an income tax expense of $127 million for 3Q 2015, as
compared to an income tax expense of $124 million for 2Q 2015 and income tax
benefit of $21 million for 3Q 2014. During 3Q 2014, the Company recognized $133
million of deferred tax assets for losses of previous years that were utilized
in the payment of the tax amnesty in Brazil[7].
Non-controlling interests income for 3Q 2015 amounted to $93 million primarily
related to losses generated by ArcelorMittal South Africa partially offset by
share of net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert
Arames in Brazil. Non-controlling interests for 2Q 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 3Q 2014 primarily related to minority shareholders' share
of net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in
Brazil, partially offset by losses generated in ArcelorMittal South Africa.
ArcelorMittal recorded net loss for 3Q 2015 of $711 million, or $0.40 loss per
share, as compared to a net income of $179 million, or $0.10 earnings per share
for 2Q 2015, and net income of $22 million, or $0.01 earnings per share for
3Q 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
-------------------------------------------------------------------------------
Region / Site Project Capacity / particulars Actual
segment completion
-------------------------------------------------------------------------------
Canada Baffinland Early revenue Production capacity 3Q 2015((a))
phase 3.5mt/ year (iron ore)
-------------------------------------------------------------------------------
NAFTA ArcelorMittal Phase 1: Optimize cost and 2Q 2015
Dofasco (Canada) Construction increase shipment of
of a heavy galvanized products by
gauge 0.3mt / year
galvanizing
line#6 to
optimize
galvanizing
operations
-------------------------------------------------------------------------------
China Hunan Province VAMA auto Capacity of 1.5mt 1Q 2015
steel JV pickling line, 1.0mt
continuous annealing
line and 0.5mt of hot
dipped galvanizing auto
steel
-------------------------------------------------------------------------------
USA AM/NS Calvert Continuous Increased production of 1Q 2015
coating line Usibor by 0.1mt / year
upgrade to
Aluminize
line#4
-------------------------------------------------------------------------------
Brazil Juiz de Fora Rebar Increase in rebar 1Q 2015
(Brazil) expansion capacity by 0.4mt / year
-------------------------------------------------------------------------------
Ongoing projects
-------------------------------------------------------------------------------
Segment Site Project Capacity / particulars Forecast
completion
-------------------------------------------------------------------------------
USA AM/NS Calvert Slab yard Increase coil production 2H 2016
expansion level up to 5.3mt/year
coils.
-------------------------------------------------------------------------------
NAFTA ArcelorMittal Phase 2: Allow the galvaline #4 2016
Dofasco (Canada) Convert the to produce 160kt
current galvalume and 128kt
galvanizing galvanize
line #4 to a
Galvalume
line
-------------------------------------------------------------------------------
Europe ArcelorMittal HRM extension Increase HRC capacity by 2016
Krakow (Poland) 0.9mt/ year
HDG increase Increasing HDG capacity 2016
by 0.4mt/ year
-------------------------------------------------------------------------------
Brazil Acindar New rolling Increase in rolling 2016
(Argentina) mill capacity by 0.4mt / year
for bars for civil
construction
-------------------------------------------------------------------------------
Mining Liberia Phase 2 Increase production Currently
expansion capacity to 15mt/ year delayed((b))
project (high grade sinter feed)
-------------------------------------------------------------------------------
Brazil ArcelorMittal Expansion Increase hot dipped On hold
Vega Do Sul project galvanizing (HDG)
(Brazil) capacity by 0.6mt / year
and cold rolling (CR)
capacity by 0.7mt / year
-------------------------------------------------------------------------------
Brazil Monlevade Wire rod Increase in capacity of On hold((c))
(Brazil) production finished products by
expansion 1.1mt / year
Juiz de Fora Meltshop Increase in meltshop On hold((c))
(Brazil) expansion capacity by 0.2mt /
year
-------------------------------------------------------------------------------
Brazil Monlevade Sinter plant, Increase in liquid steel On hold
(Brazil) blast furnace capacity by 1.2mt /
and meltshop year;
Sinter feed capacity of
2.3mt / year
-------------------------------------------------------------------------------
a) First production in Baffinland was in 4Q 2014, with first shipments taking
place during 3Q 2015 following the completion of shiploader and port
infrastructure.
b) Management is currently reviewing the options to further improve the cost
position of the existing Liberian iron ore operation. The Company is
actively working on structural changes, which will allow the asset to focus
on its natural European market by adapting to a smaller DSO operation with
a more flexible cost base. The Liberia phase 2 project to construct 15
million tonnes of concentrate capacity and associated infrastructure has
been delayed due to the declaration of force majeure by contractors on 8
August 2014, driven by the Ebola virus outbreak in West Africa. Given the
project delays and current market conditions, the Company is assessing its
options to progress the project. ArcelorMittal remains fully committed to
Liberia.
c) Though the Monlevade wire rod expansion project and Juiz de Fora meltshop
expansion are expected to be completed in 4Q 2015 and 2017 respectively,
the Company does not expect to increase shipments until domestic demand
improves.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 4,371 4,545 5,645 13,693 15,996
--------------------------------------------------------------------
EBITDA 340 225 429 618 865
--------------------------------------------------------------------
Depreciation 151 155 169 462 528
--------------------------------------------------------------------
Impairment - 19 - 19 -
--------------------------------------------------------------------
Exceptional charges 101 - - 101 -
--------------------------------------------------------------------
Operating income / (loss) 88 51 260 36 337
--------------------------------------------------------------------
--------------------------------------------------------------------
Crude steel production (kt) 5,976 5,775 6,485 17,659 18,894
--------------------------------------------------------------------
Steel shipments (kt) 5,620 5,642 5,866 16,725 17,269
--------------------------------------------------------------------
Average steel selling price (US$/t) 698 726 853 739 849
--------------------------------------------------------------------
NAFTA segment crude steel production increased 3.5% to 6.0 million tonnes in
3Q 2015 as compared to 5.8 million tonnes for 2Q 2015.
Steel shipments in 3Q 2015 remained stable at 5.6 million tonnes as compared to
2Q 2015, primarily driven by a 3.1% increase in flat product steel shipments,
offset by a 12.2% decrease in long product shipment volumes resulting in part
from the closure of the Georgetown operations in 2Q 2015 and lower demand.
Sales in 3Q 2015 decreased by 3.8% to $4.4 billion as compared to 2Q 2015, due
to lower average steel selling prices (-3.8%). Average steel selling price for
flat products and long products declined -3.9% and -6.9%, respectively.
EBITDA in 3Q 2015 increased to $340 million as compared to $225 million in
2Q 2015 primarily due to lower costs and improved performance in Calvert,
offset in part by lower average steel selling prices.
Operating performance in 3Q 2015 was impacted by exceptional charges of $101
million relating to the write-down of inventories following the rapid decline of
steel prices.
EBITDA in 3Q 2015 declined 20.7% year-on-year primarily due to a negative price-
cost squeeze resulting from significantly lower average steel selling prices (-
18.1%) with declines in both flat and long products, as well as lower steel
shipment volumes (-4.2%) for both flat and long products partly offset by better
performance in Calvert.
Brazil
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 2,125 2,167 2,707 6,411 7,494
------------------------------------------------------------------------------
EBITDA 313 360 460 1,050 1,299
------------------------------------------------------------------------------
Depreciation 78 85 111 249 358
------------------------------------------------------------------------------
Exceptional charges 39 - - 39 -
------------------------------------------------------------------------------
Operating income 196 275 349 762 941
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Crude steel production (kt) 2,953 2,934 2,971 8,762 7,766
------------------------------------------------------------------------------
Steel shipments (kt) 3,125 2,835 2,844 8,667 7,481
------------------------------------------------------------------------------
Average steel selling price (US$/t) 622 695 866 674 896
------------------------------------------------------------------------------
Brazil segment crude steel production remained stable at 3.0 million tonnes in
3Q 2015 as compared to 2.9 million tonnes in 2Q 2015.
Steel shipments in 3Q 2015 increased by 10.2% to 3.1 million tonnes as compared
to 2Q 2015, due to 14.9% increase in flat steel shipments primarily driven by
increased exports from Brazil and a 6.3% increase in long product shipments.
Sales in 3Q 2015 decreased by 1.9% to $2.1 billion as compared to 2Q 2015, due
to lower average steel selling prices (-10.5%), impacted by foreign exchange and
low international steel pricing for both flat and long products offset in part
by higher steel shipments as discussed above.
EBITDA in 3Q 2015 declined by 12.9% to $313 million as compared to $360 million
in 2Q 2015 on account of lower average steel selling prices and lower
performance of our tubular operations offset in part by higher steel shipment
volumes.
Operating performance in 3Q 2015 was impacted by exceptional charges of $39
million relating to the write-down of inventories following the rapid decline of
steel prices.
EBITDA in 3Q 2015 was 32% lower as compared to 3Q 2014 due to lower average
steel selling prices (-28.2%) offset in part by higher steel shipments (+9.9%)
primarily following the restart of the furnace in Tubarao, Brazil, in July 2014
(Flat Brazil steel shipments volumes up +27%).
Europe
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 7,671 8,547 9,689 24,818 30,529
-----------------------------------------------------------------------
EBITDA 553 680 523 1,849 1,747
-----------------------------------------------------------------------
Depreciation 293 293 357 885 1,167
-----------------------------------------------------------------------
Exceptional charges 287 - - 287 -
-----------------------------------------------------------------------
Operating (loss) / income (27) 387 166 677 580
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Crude steel production (kt) 10,880 11,644 10,837 33,865 32,677
-----------------------------------------------------------------------
Steel shipments (kt) 9,646 10,895 9,829 31,203 30,029
-----------------------------------------------------------------------
Average steel selling price (US$/t) 614 617 760 622 789
-----------------------------------------------------------------------
Europe segment crude steel production decreased by 6.6% to 10.9 million tonnes
in 3Q 2015, as compared to 2Q 2015 following seasonal planned stoppages and
minor operational issues.
Steel shipments in 3Q 2015 decreased by 11.5% to 9.6 million tonnes as compared
to 2Q 2015, primarily due to 15.6% decrease in long product shipment volumes and
9.6% decrease in flat steel shipment volumes, both impacted by seasonal lower
demand.
Sales in 3Q 2015 declined 10.3% to $7.7 billion as compared to 2Q 2015,
primarily due to lower steel shipments as discussed above. Average steel selling
prices declined marginally by 0.6% during 3Q 2015, as 1.1% decline in flat
products was offset by 1% increase in long products.
EBITDA in 3Q 2015 decreased by 18.7% to $553 million as compared to $680 million
in 2Q 2015, mainly driven by lower steel shipment volumes offset in part by
improved costs.
Operating performance in 3Q 2015 was impacted by exceptional charges of $287
million relating to the write-down of inventories following the rapid decline of
steel prices.
EBITDA in 3Q 2015 was 5.8% higher as compared to 3Q 2014 primarily on account of
lower costs and efficiency improvements offset by lower average steel selling
prices (-19.2%) and lower steel shipments (-1.9%).
ACIS[8]
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 1,508 1,649 1,994 4,878 6,301
--------------------------------------------------------------------
EBITDA 35 88 208 256 473
--------------------------------------------------------------------
Depreciation 104 106 130 318 390
--------------------------------------------------------------------
Impairment 27 - - 27 -
--------------------------------------------------------------------
Exceptional charges 80 - - 80 -
--------------------------------------------------------------------
Operating (loss) / income (176) (18) 78 (169) 83
--------------------------------------------------------------------
--------------------------------------------------------------------
Crude steel production (kt) 3,257 3,696 3,616 10,556 10,629
--------------------------------------------------------------------
Steel shipments (kt) 3,196 3,205 3,229 9,407 9,722
--------------------------------------------------------------------
Average steel selling price (US$/t) 416 450 594 456 584
--------------------------------------------------------------------
ACIS segment crude steel production in 3Q 2015 decreased by 11.9% to 3.3 million
tonnes as compared to 3.7 million in 2Q 2015 primarily driven by the planned
repair of blast furnace #9 in Ukraine.
Steel shipments in 3Q 2015 remained stable at 3.2 million tonnes as compared to
2Q 2015. Higher volumes in South Africa for both domestic and export were
offset by lower shipments in the CIS region on account of lower production.
Sales in 3Q 2015 decreased by 8.6% to $1.5 billion as compared to $1.6 billion
in 2Q 2015 primarily due to lower average steel selling prices (-7.5%). Average
steel selling prices were lower in Ukraine (-5.9%), Kazakhstan (-4.0%) and South
Africa (-12.8%).
EBITDA in 3Q 2015 of $35 million was lower as compared to $88 million in
2Q 2015, reflecting significantly weaker market conditions in all geographies
(in particular South Africa).
Operating performance in 3Q 2015 was impacted by exceptional charges of $80
million relating to the write-down of inventories following the rapid decline of
steel prices and to retrenchment costs in Thabazimbi and Tshikondeni in South
Africa for $27 million. Impairment charges of $27 million in 3Q 2015 was related
to the closure of Vereeniging meltshop in South Africa.
EBITDA in 3Q 2015 of $35 million was lower as compared to $208 million in
3Q 2014 primarily due to lower average steel selling prices (-29.9%) with weaker
performance across all businesses partially offset by improved costs following
currency devaluation.
Mining
(USDm) unless otherwise shown 3Q 15 2Q 15 3Q 14 9M 15 9M 14
Sales 908 964 1,272 2,630 3,911
-------------------------------------------------------------------------------
EBITDA 143 115 278 372 1,099
-------------------------------------------------------------------------------
Depreciation 145 157 170 452 484
-------------------------------------------------------------------------------
Operating (loss) / income (2) (42) 108 (80) 615
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Own iron ore production ((a) )(Mt) 15.4 16.4 15.8 47.3 47.2
-------------------------------------------------------------------------------
Iron ore shipped externally and internally at 10.3 10.8 10.0 30.5 29.9
market price ((b) )(Mt)
-------------------------------------------------------------------------------
Iron ore shipment - cost plus basis (Mt) 5.9 6.4 7.1 16.3 17.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Own coal production((a) )(Mt) 1.6 1.5 1.8 4.7 5.3
-------------------------------------------------------------------------------
Coal shipped externally and internally at 0.8 0.7 1.1 2.0 3.2
market price((b) )(Mt)
-------------------------------------------------------------------------------
Coal shipment - cost plus basis (Mt) 0.7 0.9 0.8 2.4 2.4
-------------------------------------------------------------------------------
(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 3Q 2015 decreased by 6.1% to 15.4 million metric tonnes as
compared to 2Q 2015 due to lower production in Canada following planned
maintenance and seasonally lower production in Liberia. Own iron ore production
(not including supplies under strategic long-term contracts) was lower by 2.9%
as compared to 3Q 2014 primarily due to lower production in Kazakhstan and
Brazil partially offset by higher production in Canada.
Market priced iron ore shipments in 3Q 2015 decreased by 4.4% to 10.3 million
metric tonnes as compared to 2Q 2015 driven by lower shipments in Canada and
Liberia (due to seasonal weather factors). Market priced iron ore shipments in
3Q 2015 increased by 3.1% as compared to 3Q 2014 driven by improvements in
Canada (following operational efficiency gains) and Ukraine offset in part by
lower Brazilian and Mexican shipments.
Own coal production (not including supplies under strategic long-term contracts)
in 3Q 2015 increased 7.2% to 1.6 million metric tonnes as compared to 2Q 2015,
primarily due to higher production in Kazakhstan. Own coal production (not
including supplies under strategic long-term contracts) in 3Q 2015 decreased
7.8% as compared to 3Q 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 3Q 2015 increased to $143 million as compared to $115 million in
2Q 2015 primarily due to improved costs performance and mix effects, offset in
part by lower market priced iron ore shipment volumes (-4.4%) and by lower
seaborne iron ore market prices (-6.1%).
EBITDA in 3Q 2015 was 48.3% lower as compared to 3Q 2014, primarily due to lower
seaborne iron ore market prices (-39.1%), partially offset by the realised
benefits of higher market priced iron ore shipment volumes (+3.1%), lower unit
iron ore cash costs and restructuring of our coal operations, including the sale
of Kuzbass mines.
Liquidity and Capital Resources
For 3Q 2015, net cash provided by operating activities was $473 million as
compared to $1,019 million in 2Q 2015. Cash provided by operating activities in
3Q 2015 included a $136 million investment in operating working capital as
compared to a $392 million release in operating working capital in 2Q 2015.
Rotation days during 3Q 2015 decreased to 54 days as compared to 55 days in
2Q 2015, primarily on account of foreign exchange.
Net cash provided by other operating activities in 3Q 2015 was $68 million
(including adjustments of non-cash items, primarily unrealised foreign exchange
losses). Net cash used in other operating activities in 2Q 2015 was $445
million, and net cash provided by other operating activities in 3Q 2014 was $251
million.
Net cash used in investing activities during 3Q 2015 was $649 million as
compared to $419 million in 2Q 2015. Capital expenditure increased to $684
million in 3Q 2015 as compared to $542 million in 2Q 2015. The Company expects
FY 2015 capital expenditure to be approximately $2.8 billion (down from the
previous guidance of approximately $3.0 billion).
Cash flow from other investing activities in 3Q 2015 of $35 million primarily
includes proceeds from the Gerdau share swap(3) and sale of tangible assets
offset by a $39 million outflow relating to the final instalment of the
acquisition price of an additional 11% stake in Ostrava acquired in 2009. 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[9]
and proceeds related to the sale of certain European distribution assets. Cash
flow from other investing activities in 3Q 2014 of $61 million primarily
included cash inflow from the divesture of Circuit Foil[10].
Net cash used in financing activities for 3Q 2015 was $835 million as compared
to net cash provided by financing activities of $1,284 million for 2Q 2015. Net
cash used in financing activities in 3Q 2015 primarily included debt repayment
of a $1 billion partially offset by issuance of CHF 225 million 2.50% Notes due
July 3, 2020, issued under ArcelorMittal's Euro Medium Term Notes Programme.
During 3Q 2015, the Company paid $21 million in dividends primarily to minority
shareholders in ArcelorMittal Mines Canada. During 2Q 2015, the Company paid
$331 million in dividends to ArcelorMittal shareholders.
At September 30, 2015, the Company's cash and cash equivalents (including
restricted cash and short-term investments) amounted to $3.6 billion as compared
to $4.7 billion at June 30, 2015.
Gross debt of $20.4 billion at September 30, 2015, decreased from $21.3 billion
at June 30, 2015 and was lower than $21.9 billion at September 30, 2014. Gross
debt was lower at September 30, 2015 due to the early redemption of a $1 billion
bond on July 2, 2015, partly offset by the issuance of the CHF 225 million bond
on July 3, 2015 as discussed above.
As of September 30, 2015, net debt increased to $16.8 billion as compared with
$16.6 billion in June 30, 2015, but was lower as compared to $17.8 billion as
September 30, 2014.
The Company had liquidity of $9.6 billion at September 30, 2015, consisting of
cash and cash equivalents (including restricted cash and short-term investments)
of $3.6 billion and $6.0 billion of available credit lines. The $6 billion
credit facility contains a financial covenant of 4.25x Net debt / EBITDA. On
September 30, 2015, the average debt maturity was 6.3 years.
Board proposes no dividend to be paid for financial year 2015
Given the challenging global economic conditions and the Company's priority to
deleverage, ArcelorMittal's Board of Directors proposes that no dividend be paid
for financial year 2015. This proposal is subject to shareholder approval at the
next annual general meeting on May 4, 2016.
Key recent developments
* On September 22, 2015 the Company exercised its right to redeem 100% of the
outstanding $500 million 3.75% notes due March 2016, in-line with its
proactive approach to manage its debt maturity profile and effective use of
existing cash reserves. The total cash settlement of $511 million including
accrued interest occurred on October 22, 2015.
* On October 7, 2015, ArcelorMittal and IMETAL, an Algerian state-owned
company, announced an outline agreement for the restructuring of the
shareholding of the companies ArcelorMittal Algeria, ArcelorMittal Pipes and
Tubes Algeria and ArcelorMittal Tebessa. The restructuring is consistent
with ArcelorMittal's strategy of asset portfolio optimization. The
restructuring plan will see ArcelorMittal transfer its minority shareholding
in both ArcelorMittal Algeria and ArcelorMittal Tebessa as well as its
majority participation in ArcelorMittal Pipes & Tubes Algeria, with the
state of Algeria controlling the full shareholding of these entities.
Furthermore, ArcelorMittal will continue its technical support for the
successful implementation of El Hadjar Complex development plan. The parties
aim to finalize the agreements within the coming weeks.
* On September 23, 2015, ArcelorMittal announced the investment of over ?100
million in the refurbishment of the Coke Oven Batteries in Gijón. The main
part of the approved investment will be focused on the re-construction of
two 45-oven batteries at ArcelorMittal Asturias' coke plant in Gijón,
installation of a state-of-the-art emission collection and scrubbing system,
and implementation of efficient by-product management systems. The
refurbishment work will start in mid-2016 and the coke oven batteries are
expected to reach full capacity in 2019.
Key recent developments - ArcelorMittal South Africa
* On November 6, 2015, ArcelorMittal South Africa Limited ("AMSA") announced
that it will seek shareholder approval for a rights offering of between R4
billion and R4.5 billion (between $290 million and $325 million at current
exchange rates (R/$ at 13.9)) to be launched subject to certain conditions.
The Rights Offer is intended to improve the financial position of AMSA by
reducing current indebtedness levels (including but not limited to repaying
a loan from the ArcelorMittal Group with a current balance of R 3.2 billion
($232 million), funding near term investment in capital expenditure and
positively impacting AMSA's ability to raise future debt funding. The
proposed Rights Offer will be made to all Shareholders proportionately to
their shareholdings with allowance for excess applications by shareholders.
The ArcelorMittal Group will underwrite the proposed rights offering in its
entirety by subscribing to its pro rata share and taking up any remaining
Shares not taken up by other Company shareholders. AMSA has undertaken
several initiatives in response to the current situation (a challenging
operating environment characterized by lower local demand, increased cheap
imports and higher costs, resulting in losses in recent years), which are
designed to return AMSA to profitability in the medium term, including but
not limited to overall focusing on improved operating performance, promoting
tariff and anti-dumping duties and renegotiating its raw material contracts
with Kumba.
On November 6, 2015, ArcelorMittal South Africa announced that an agreement
had been reached with Kumba to amend the pricing mechanism terms of the
current iron one supply agreement from a cost-based price to an Export
Parity Price ("EPP") with effect from October 1, 2015. The EPP will be
calculated on the basis of the Platts 62% Fe CFR China Fines Index (the
"Index price") and, at certain price levels, AMSA will receive a discounted
price.
* As part of AMSA's initiatives in transforming the Company, AMSA is proposing
that a B-BBEE (black empowerment) transaction be undertaken to achieve a
sustainable 25% black ownership in AMSA in order for it to maximize its
score under the B-BBEE Codes of Good Practice. As a first step in this
regard, the Company implemented a 5% employee stock option plan in
September.
* Following Kumba's announcement on July 16, 2015 that it would commence with
the closure of the Thabazimbi mine, AMSA undertook due diligence to assess
whether the mine could be taken over by AMSA and operated viably.
Unfortunately, due diligence revealed that given the immediate reserves
available which is further aggravated by the slope failure and depressed
economic conditions in the iron ore market, there is currently no viable
option available for AMSA to take over the mine and operate it successfully.
Kumba is thus proceeding with the closure of the Thabazimbi mine.
Outlook and guidance
Based on the current economic outlook, ArcelorMittal expects global apparent
steel consumption ("ASC") to decline by around -1.5% to -2.0% in 2015 as
compared to 2014. In the US, although underlying demand continues to remain
positive, due to a reduction in inventory levels (amplified by the weaker
pricing environment) and significant contraction in oil country tubular goods
("OCTG") demand from the energy sector, apparent demand is now expected to
decline by around 6% in 2015 (vs previous forecast of -3% to -4%). In Europe,
the Company expects continued growth in real underlying demand to support ASC
growth of around +2% in 2015 (vs previous forecast of +1.5% to +2.5%); although
growth is slowing towards the year end this reflects customers adopting a "wait
and see" attitude to purchases given the weakening price environment. The
outlook for emerging markets remains poor. In Brazil, the domestic economy
continues to weaken as steel consuming sectors continue to contract,
Unternehmensinformation / Kurzprofil:
Datum: 06.11.2015 - 07:01 Uhr
Sprache: Deutsch
News-ID 432493
Anzahl Zeichen: 65601
contact information:
Town: London
Kategorie: Business News
Diese Pressemitteilung wurde bisher 258 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"ArcelorMittal reports third quarter 2015 and nine months 2015 results"
steht unter der journalistisch-redaktionellen Verantwortung von
ArcelorMittal S.A.
(Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
Alle Meldungen von ArcelorMittal S.A.
