ArcelorMittal reports fourth quarter 2015 and full year 2015 results
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports fourth quarter 2015 and full year 2015 results
. Processed and transmitted by NASDAQ OMX Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, February 5, 2016 - 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[i]
for the three and twelve month periods ended December 31, 2015.
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|Highlights: |
| |
| * Health and safety performance improved in FY 2015 with annual LTIF rate of|
| 0.81x as compared to 0.85x in FY 2014 |
| * FY 2015 EBITDA of $5.2 billion; EBITDA of $1.1 billion in 4Q 2015, 18.4% |
| lower as compared with 3Q 2015 |
| * FY 2015 net loss of $7.9 billion including $4.8 billion of impairments |
| (primarily due to mining impairments) and $1.4 billion of exceptional |
| charges (primarily related to the write-down of inventory following the |
| rapid decline of international steel prices[ii]) |
| * Excluding these exceptional and non-cash items, FY 2015 adjusted net loss |
| was $0.3 billion as compared to adjusted net income of $0.4 billion in FY |
| 2014 |
| * Net debt lower at $15.7 billion as of December 31, 2015 as compared to |
| $16.8 billion as of September 30, 2015; net debt was $0.1 billion lower as|
| compared to December 31, 2014 |
| * Liquidity stood at $10.1 billion as of December 31, 2015 as compared to |
| $9.6 billion as of September 30, 2015 |
| * Giving effect to the announced sale of ArcelorMittal's stake in Gestamp |
| for ?875 million, liquidity would be $11.1 billion as of December |
| 31, 2015 and net debt $14.7 billion |
| * FY 2015 steel shipments of 84.6Mt (-0.6% YoY); 4Q 2015 steel shipments of |
| 19.7Mt down -6.8% versus 4Q 2014 |
| * FY 2015 iron ore shipments of 62.4Mt (-2.0% YoY), of which 40.3Mt shipped |
| at market prices (+1.4% YoY); 4Q 2015 iron ore shipments of 15.6Mt (-4.2% |
| YoY), of which 9.9Mt shipped at market prices (-0.5% YoY) |
| * FY 2015 iron ore unit cash costs reduced by 20% YoY, exceeding the 15% |
| target for 2015 |
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|Strategic progress in 2015: |
| |
|The Company has continued to make progress on its strategic objectives during |
|2015, including: |
| * Europe: Continued focus on cost optimization and leveraging benefits of |
| restructuring |
| * NAFTA: North American asset optimization underway; Calvert ramp up |
| progressing well with automotive certifications ongoing and increased |
| capacity utilisation |
| * ACIS: Capturing benefits of continued currency devaluation and overall |
| good operational performance in CIS; good government cooperation, tariff |
| support and renegotiation of iron ore supply agreement in South Africa |
| * Mining: Expanded mining volumes at ArcelorMittal Mines Canada (AMMC); FY |
| 2015 iron ore production up +10.9% to 25.9Mt whilst further reducing |
| mining cash costs (4Q 2015 AMMC concentrate FOB cash cost below $25/t) |
| * Further developed its automotive steel franchise including: investment |
| approval to increase HRC and HDG capacity in Krakow, Poland; commercial |
| automotive coils produced in VAMA, China; new product launches i.e. |
| Fortiform® being used by selected car manufacturers; and S-in motion® roll|
| out for pickup trucks |
| * Further reduced cash requirements: FY 2015 capex reduced to $2.7 billion |
| from $3.7 billion in FY 2014; FY 2015 net interest reduced to $1.3 billion|
| from $1.5 billion in FY 2014 |
| * As a result, despite challenging market conditions, the Company was able |
| to achieve its objective of making progress on net debt in 2015; net debt |
| declined to its lowest level since the ArcelorMittal merger |
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|Action 2020 plan: |
| |
|The Company has today published details of its Action 2020 plan. The Action |
|2020 plan represents a strategic roadmap for each of ArcelorMittal's main |
|business segments. The Action 2020 plan is over and above the Company's |
|ongoing management gains plan and seeks to deliver real structural |
|improvements unique to ArcelorMittal's business. The Action 2020 plan targets |
|a return to >$85/t EBITDA absent any recovery in steel spreads and raw |
|materials prices from current levels. The Action 2020 plan targets a further |
|structural EBITDA improvement of approximately $3.0 billion. Upon full |
|achievement of the plan, the Company would expect to deliver free cash flow in|
|excess of $2.0 billion annually. |
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|Outlook and guidance: |
| |
|As indicated at 3Q 2015 results, a combination of Company actions and known |
|developments is expected to support EBITDA in 2016 by $1.0 billion relative to|
|the 4Q 2015 annual run-rate level. Due to order book and the time lag required|
|for lower raw material costs to positively impact cost of sales, EBITDA is |
|expected to sequentially decline in 1Q 2016. Based on the assumption of |
|prevailing raw material costs and spot steel spreads, the Company expects FY |
|2016 EBITDA to be in excess of $4.5 billion. This guidance does not capture |
|any upside to current market conditions. |
| |
|Reducing the cash requirements of the business: |
| |
|The Company targets a reduction of the cash requirements of the business in |
|2016 by in excess of $1.0 billion as compared to 2015. The components of this|
|reduction include: |
| * lower capex spend (FY 2016 capex is expected to be approximately $2.4 |
| billion as compared to $2.7 billion in FY 2015); |
| * lower interest expenses (FY 2016 net interest is expected to be |
| approximately $1.1 billion as compared to $1.3 billion in FY 2015); |
| * no dividend payment in respect of the 2015 financial year; and |
| * lower cash taxes. |
| |
|As a result, the level of EBITDA required for free cash flow breakeven would |
|reduce to $4.5 billion, thus helping to ensure that the Company continues to |
|generate positive free cash flow, reduce net debt and maintain strong |
|liquidity. |
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Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 4Q 15 3Q 15 4Q 14 12M 15 12M 14
Sales 13,981 15,589 18,723 63,578 79,282
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EBITDA 1,103 1,351 1,815 5,231 7,237
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Operating (loss)/ income (5,331) 20 569 (4,161) 3,034
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Net loss attributable to equity holders (6,686) (711) (955) (7,946) (1,086)
of the parent
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Basic loss per share (US$) (3.72) (0.40) (0.53) (4.43) (0.61)
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Own iron ore production (Mt) 15.5 15.4 16.7 62.8 63.9
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Iron ore shipped at market price (Mt) 9.9 10.3 9.9 40.3 39.8
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Crude steel production (Mt) 21.6 23.1 23.2 92.5 93.1
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Steel shipments (Mt) 19.7 21.1 21.2 84.6 85.1
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EBITDA/tonne (US$/t) 56 64 86 62 85
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Steel-only EBITDA/tonne (US$/t) 51 57 75 56 69
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Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"2015 was a very difficult year for the steel and mining industries. Although
demand in our core markets remained strong, prices deteriorated significantly
during the year as a result of excess capacity in China. Throughout the year we
have rigorously focused on implementing a series of measures aimed at reducing
costs and ensuring the business is adapted for these tough market conditions.
As a result of these measures we succeeded in ending the year with net debt
slightly below the end of 2014 despite significantly lower EBITDA.
"Regrettably we have announced a disappointing net loss which includes non-cash
impairment charges on our mining assets as a result of the very considerable
fall in the iron-ore price. Our mining business is fully focused on adapting to
this low price environment and has reduced cash costs by 20% compared with an
initial target of 15%. A further 10% is targeted for 2016.
"Looking ahead, although we have started to see a recovery in Chinese steel
spreads from 2015 lows, 2016 will be another difficult year for our industries.
It is clear that China has a challenge to restructure its steel industry for a
lower growth economy but we are somewhat encouraged by recent comments
concerning capacity closures. Until this situation is fully addressed the
effective and swift implementation of trade defence instruments will be critical
and we expect to see more positive rulings in this regard during the year.
"Our priority is to ensure we deliver on our financial targets and strategic
projects. We have today announced a new strategic plan for the period to 2020
following a detailed analysis of performance improvement potential across the
group. "Action 2020" sets out specific targets for each business segment which
combined aim to achieve a further $3.0 billion of EBITDA improvement potential
and enable the business to generate $2.0 billion of annual free cash flow.
"Reducing net debt remains an important priority and given market conditions it
is prudent to take proactive steps to accelerate progress. We have today
announced the sale of our minority shareholding in Gestamp, and are taking
further steps to reduce net debt.
"In conclusion, there is no doubt these are challenging times but we are
confident that ArcelorMittal is taking all the right actions and has the right
assets, the right strategy and the right balance sheet to deliver on the targets
identified and cement our position as the world's leading steel company."
Fourth quarter 2015 earnings press conference call and webinar
ArcelorMittal management will host a conference call and web presentation for
members of the media outside the US to discuss the three and twelve-month
periods ended December 31, 2015 on:
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Date London CET
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Friday February 10.30am 11:30am
5, 2016
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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 83982718#
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France: 0800 914780 +33 1 7071 2916 83982718#
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Germany: 0800 965 6288 +49 692 7134 0801 83982718#
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Spain: 90 099 4930 +34 911 143436 83982718#
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Luxembourg: 800 26908 +352 27 86 05 07 83982718#
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For participants in countries not listed, you can reach the conference by
dialling +49 69271340801
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.
Fourth quarter 2015 earnings analyst conference call
A pre-recorded audio of the results presentation is available to listen to at
the following link: http://interface.eviscomedia.com/player/1085/index.html
ArcelorMittal management will host a Q&A session for members of the investment
community to discuss the three and twelve-month periods ended December 31, 2015
on:
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Date US Eastern time London CET
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Friday February 9.15am 2.15pm 3.15pm
5, 2016
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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 94077451#
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US local: 1 86 6719 2729 +1 24 0645 0345 94077451#
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US (New York) 1 86 6719 2729 + 1 64 6663 7901 94077451#
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France: 0800 914780 +33 1 7071 2916 94077451#
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Germany: 0800 965 6288 +49 692 7134 0801 94077451#
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Spain: 90 099 4930 +34 911 143436 94077451#
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Luxembourg: 800 26908 +352 27 86 05 07 94077451#
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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) 1805 2047 088 English 480406#
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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 latest Annual Report on Form 20-F on file 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 2015, ArcelorMittal had revenues of $63.6 billion and crude steel production
of 92.5 million tonnes, while own iron ore production reached 62.8 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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Sophie Evans Tel: +44 203 214 2882
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Paul Weigh Tel: +44 203 214 2419
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France Image 7 Tel: +33 153 70 94 17
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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 0.81x for the twelve months
of 2015 ("12M 2015") as compared to 0.85x for the twelve months of 2014 ("12M
2014"), with improvements within NAFTA, Brazil and Europe segments, offset by
deterioration in the ACIS and Mining segments.
Health and safety performance deteriorated to 0.83x in the fourth quarter of
2015 ("4Q 2015") as compared to 0.78x for the third quarter of 2015 ("3Q 2015")
but improved as compared to 0.89x for the fourth quarter of 2014 ("4Q 2014").
Between 4Q 2015 and 3Q 2015, deterioration in the health and safety performance
of the Brazil, Europe and ACIS segments relative to 3Q 2015, was partially
offset by improvements 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.
During 4Q 2015, ArcelorMittal launched a new flagship programme for health and
safety performance improvement in Europe segment "Take Care" training, to be
rolled out 60,000 employees. Following the successful adoption of the
"Courageous Leadership" training programme in the Mining segment, a similar
program was launched in the ACIS segment to improve health and safety
performance.
Own personnel and contractors - Frequency rate
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Lost time injury frequency rate 4Q 15 3Q 15 4Q 14 12M 15 12M 14
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Mining 0.72 0.99 0.75 0.74 0.56
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NAFTA 0.95 0.99 1.42 1.02 1.13
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Brazil 0.73 0.57 1.14 0.62 0.89
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Europe 1.01 0.88 0.90 0.99 1.09
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ACIS 0.58 0.52 0.47 0.54 0.49
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Total Steel 0.84 0.75 0.92 0.82 0.91
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Total (Steel and Mining) 0.83 0.78 0.89 0.81 0.85
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Key corporate responsibility highlights for 4Q 2015:
* In response to the growing trend towards global supply chain standards for
steel, ArcelorMittal joined two initiatives on steel and on mining that are
working towards developing third party sustainability certification schemes
for our sector, the Initiative for Responsible Mining Assurance and
Responsible Steel initiative.
* ArcelorMittal hosted its inaugural sustainability media day in Paris on
October 5, 2015, an event well attended by national and international
journalists.
* ArcelorMittal has been recognized for its sustainability leadership with a
World Steel Association "Steelie" award at a ceremony held during the 49th
worldsteel conference in Chicago on October 12, 2015. The Company was
honoured with the "Excellence in sustainability" award for its 10
Sustainable Development Outcomes - a key foundation for its sustainability
framework launched in 2015.
Analysis of results for the twelve months ended December 31, 2015 versus results
for the twelve months ended December 31, 2014
Total steel shipments for 12M 2015 were 0.6% lower at 84.6 million metric tonnes
as compared with 85.1 million metric tonnes for 12M 2014.
Sales for 12M 2015 decreased by 19.8% to $63.6 billion as compared with $79.3
billion for 12M 2014, primarily due to lower average steel selling prices (-
19.7%), lower steel shipments (-0.6%) and lower seaborne iron ore reference
prices (-43%), offset in part by higher market priced iron ore shipments
(+1.4%).
Depreciation of $3.2 billion for 12M 2015 was lower as compared to $3.9 billion
for 12M 2014 primarily due to the impact of the US dollar appreciation against
all major currencies.
Impairment charges for 12M 2015 were $4.8 billion relating to:
* Mining segment ($3.4 billion): consisting of $0.9 billion with respect to
goodwill and $2.5 billion primarily related to fixed assets mainly due to a
downward revision of cash flow projections relating to the expected
persistence of a lower raw material price outlook at:
* ArcelorMittal Liberia ($1.4 billion);
* Las Truchas in Mexico ($0.2 billion);
* ArcelorMittal Serra Azul in Brazil ($0.2 billion); and
* ArcelorMittal Princeton coal mining operations in the United States
($0.7 billion)
* Steel segments ($1.4 billion): consisting of fixed asset impairment charges
of $0.2 billion related to the intended sale of the Long Carbon facilities
in the US (ArcelorMittal La Place, Steelton and Vinton within the NAFTA
segment), $0.4 billion primarily in connection with the idling for an
indefinite time of the ArcelorMittal Sestao plant in Spain (Europe segment),
and $0.8 billion related to:
* NAFTA: Deployment of asset optimization programs at Indiana Harbor East
and West in the United States ($0.3 billion);
* Brazil: ArcelorMittal Point Lisas in Trinidad and Tobago ($0.2 billion)
currently idled; and
* ACIS: Saldanha plant in South Africa as a result of its revised
competitive outlook ($0.3 billion)
Impairment charges for 12M 2014 were $264 million which included $114 million
primarily related to the idling of the steel shop and rolling facilities of
Indiana Harbor Long carbon operations in the US (NAFTA); $63 million related to
the write-down of the Volcan iron ore mine in Mexico (Mining); and $57 million
related to the closure of mill C in Rodange, Luxembourg (Europe).
Exceptional charges for 12M 2015 were $1.4 billion primarily including $1.3
billion inventory related charges following the rapid decline of international
steel prices and litigation and other costs in South Africa ($0.1 billion).
Exceptional charges for 12M 2014 were nil.
Operating loss for 12M 2015 was $4.2 billion as compared to operating income of
$3.0 billion in 12M 2014. Operating results for 12M 2015 were primarily
negatively impacted by the lower average steel selling prices, the $4.8 billion
impairment charges and $1.4 billion exceptional charges discussed above.
Operating results for 12M 2014 were negatively impacted by $90 million following
the settlement of US antitrust litigation (NAFTA) and a $76 million provision
related to onerous annual tin plate contracts at Weirton in the US (NAFTA),
offset by the positive impact from the $79 million gain on disposal of Kuzbass
coal mines in Russia (Mining).
Loss from investments in associates, joint ventures and other investments in
12M 2015 was $502 million, as compared to a loss of $172 million in 12M 2014.
The loss in 12M 2015 was primarily due to write-downs totalling $565 million
primarily related to the Company's investments in the Kalagadi Manganese mining
project in South Africa ($0.3 billion) and Indian investee ($0.1 billion), in
each case due to downward revisions in projected cashflows and $0.1 billion
related to the decrease in market value of the investment in Erdemir, partially
offset by income ($0.1 billion) generated from the share swap with respect to
Gerdau, Brazil[iii]. Loss from investments in associates, joint ventures and
other investments in 12M 2014 was primarily due to a $621 million impairment
loss on China Oriental following a revision of business assumptions, partially
offset by a $193 million gain from the sale of Gallatin and improved performance
of European investees and the share of profits of Calvert operations.
Net interest expense was lower at $1.3 billion in 12M 2015 as compared to $1.5
billion in 12M 2014. The reduction is attributable to lower average cost
resulting from debt repaid and raised during the year, partially offset by
increased interest costs following the ratings downgrades that occurred during
2015.
Foreign exchange and other net financing costs were lower at $1.6 billion for
12M 2015 as compared to $1.9 billion for 12M 2014. Foreign exchange and other
net financing costs for 12M 2015 include foreign exchange loss of $697 million
as compared to a loss of $620 million for 12M 2014, mainly on account of a
further 10% of USD appreciation against the Euro (versus 12% appreciation in
12M 2014), a 32% appreciation against the Brazilian Real (versus 12%
appreciation in 12M 2014) and a 46% devaluation of the tenge currency in
Kazakhstan[iv]. 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. Costs for
12M 2014 include expenses related to the termination of the Senegal greenfield
project[v], 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[vi].
ArcelorMittal recorded an income tax expense of $902 million for 12M 2015 as
compared to income tax expense of $454 million for 12M 2014. The 12M 2015 income
tax expense is negatively influenced by impairments of deferred tax assets
stemming from revisions to future taxable result forecasts in some
jurisdictions. Following the impairments of fixed assets and goodwill in the
mining and steel segments, as well as investments in associates and joint
ventures, the Company has potential tax benefits of $1.3 billion (of which $0.1
billion is recognized immediately and $1.2 billion is recognizable in future
periods upon availability of positive taxable income projections above the
already recorded level of group deferred tax assets).
Non-controlling interests for 12M 2015 were an income of $477 million, as
compared to a charge of $112 million for 12M 2014. Non-controlling interests for
12M 2015 primarily related to losses generated by ArcelorMittal South Africa and
Liberia resulting from the impairment of assets as described above. Non-
controlling interests charges for 12M 2014 primarily relate to minority
shareholders' share of net income recorded in ArcelorMittal Mines Canada and
Belgo Bekaert Arames in Brazil.
ArcelorMittal's net loss for 12M 2015 was $7.9 billion, or $4.43 loss per share,
as compared to net loss for 12M 2014 of $1.1 billion, or $0.61 loss per share.
Adjusted net loss for 12M 2015 was $0.3 billion as compared to adjusted net
income in 12M 2014 of $0.4 billion.
Analysis of results for 4Q 2015 versus 3Q 2015 and 4Q 2014
Total steel shipments for 4Q 2015 were 6.3% lower at 19.7 million metric tonnes
as compared with 21.1 million metric tonnes for 3Q 2015 (primarily due to lower
shipments in NAFTA (-18.5%)), and 6.8% lower as compared to 21.2 million metric
tonnes for 4Q 2014 (primarily due to lower volumes in NAFTA (-21.1%)).
Sales for 4Q 2015 were $14.0 billion as compared to $15.6 billion for 3Q 2015
and $18.7 billion for 4Q 2014. Sales in 4Q 2015, were 10.3% lower as compared to
3Q 2015 primarily due to lower average steel selling prices (-7.2%), lower steel
shipments (-6.3%), lower iron ore reference prices (-15%) and lower market
priced iron ore shipments (-4.3%). Sales in 4Q 2015 were 25.3% lower as compared
to 4Q 2014 due to lower average steel selling prices (-22.6%), lower steel
shipments (-6.8%) and lower iron ore references prices (-37%).
Depreciation was $807 million for 4Q 2015 as compared to $777 million in
3Q 2015, and was lower as compared to $982 million for 4Q 2014, primarily on
account of foreign exchange impact following the appreciation of the US dollar
against major currencies.
Impairment charges for 4Q 2015 were $4.7 billion including $0.9 billion with
respect to the Mining segment goodwill and $3.8 billion primarily related to
fixed assets as discussed above. Impairment charges for 3Q 2015 were $27
million relating to the closure of Vereeniging meltshop in South Africa.
Impairment charges for 4Q 2014 of $264 million included $114 million primarily
related to the idling of the steel shop and rolling facilities of Indiana Harbor
Long carbon operations in the US (NAFTA); $63 million related to write-down of
the Volcan iron ore mine in Mexico (Mining); and $57 million related to the
closure of mill C in Rodange, Luxembourg (Europe).
Exceptional charges for 4Q 2015 were $0.9 billion. These primarily include $0.8
billion inventory related charges following the rapid decline of international
steel prices and litigation and other costs in South Africa ($0.1 billion).
Exceptional charges for 3Q 2015 were $527 million, including $0.5 billion
related to the write-down of inventory and $27 million of retrenchment costs in
South Africa. Exceptional charges for 4Q 2014 were nil.
Operating loss for 4Q 2015 was $5.3 billion, as compared to operating income of
$20 million in 3Q 2015 and operating income of $569 million in 4Q 2014.
Operating results for 4Q 2015 and 3Q 2015 were impacted by impairments and
exceptional charges discussed above. Operating results for 4Q 2014 were
negatively impacted by a $76 million provision related to onerous annual tin
plate contracts at Weirton in the US (NAFTA), offset by the positive impact from
the $79 million gain on disposal of Kuzbass coal mines in Russia (Mining).
Loss from investments in associates, joint ventures and other investments for
4Q 2015 was $655 million as compared to income in 3Q 2015 of $30 million. The
loss in 4Q 2015 was primarily due to write-downs totalling $608 million
primarily related to the Company's investments in the Kalagadi Manganese mining
project in South Africa ($0.3 billion) and Indian investee ($0.1 billion) due to
downward revisions in projected cash flows, and $0.1 billion related to the
decrease in market value of the investment in Erdemir. Loss from investments in
associates, joint ventures and other investments in 4Q 2014 was negatively
impacted by a $621 million impairment loss on China Oriental following a
revision of business assumptions, partially offset by a $193 million gain on the
sale of Gallatin as well as improved performance of European investees and the
share of profits of Calvert operations.
Net interest expense in 4Q 2015 was stable at $312 million as compared to $318
million in 3Q 2015 and $322 million in 4Q 2014.
Foreign exchange and other net financing costs were $342 million for 4Q 2015 as
compared to $409 million for 3Q 2015 and $549 million for 4Q 2014. Foreign
exchange and other net financing costs for 4Q 2015 include a foreign exchange
loss of $104 million as compared to a loss of $170 million for 3Q 2015 mainly on
account of a further 2.8% USD appreciation against the Euro, a 20.3% devaluation
of tenge currency in Kazakhstan(iv) and a 27.7% devaluation of Argentine pesos
after currency controls lifted. 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 4Q 2014 includes foreign
exchange losses of $316 million.
ArcelorMittal recorded an income tax expense of $441 million for 4Q 2015, as
compared to an income tax expense of $127 million for 3Q 2015 and income tax
expense of $258 million for 4Q 2014. The higher tax expense in 4Q 2015 results
mainly from impairments of deferred tax assets stemming from lower future
taxable result forecasts.
Non-controlling interests for 4Q 2015 were an income of $395 million as compared
to income of $93 million in 3Q 2015, and charge of $15 million in 4Q 2014. Non-
controlling interests for 4Q 2015 primarily related to South Africa and Liberia
resulting from the impairment of the assets as described above.
ArcelorMittal recorded net loss for 4Q 2015 of $6.7 billion, or $3.72 loss per
share, as compared to a net loss of $711 million, or $0.40 loss per share for
3Q 2015, and net loss of $955 million, or $0.53 loss per share for 4Q 2014.
ArcelorMittal recorded adjusted net loss for 4Q 2015 of $0.4 billion, as
compared to an adjusted net loss of $0.1 billion for 3Q 2015 and adjusted net
income of $0.1 billion for 4Q 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 / Actual
particulars completion
-------------------------------------------------------------------------------
Brazil Monlevade (Brazil) Wire rod Increase in 4Q 2015((a))
production capacity of
expansion finished products
by 1.1mt / year
-------------------------------------------------------------------------------
Canada Baffinland Early revenue Production 3Q 2015((b))
phase capacity 3.5mt/
year (iron ore)
-------------------------------------------------------------------------------
NAFTA ArcelorMittal Phase 1: Optimize cost and 2Q 2015
Dofasco (Canada) Construction of a increase shipment
heavy gauge of galvanized
galvanizing line#6 products by
to optimize 0.3mt / year
galvanizing
operations
-------------------------------------------------------------------------------
China Hunan Province VAMA auto steel JV Capacity of 1Q 2015
1.5mt pickling
line, 1.0mt
continuous
annealing line
and 0.5mt of hot
dipped
galvanizing auto
steel
-------------------------------------------------------------------------------
USA AM/NS Calvert Continuous coating Increased 1Q 2015
line upgrade to production of
Aluminize line#4 Usibor by 0.1mt /
year
-------------------------------------------------------------------------------
Brazil Juiz de Fora Rebar expansion Increase in rebar 1Q 2015((a))
(Brazil) capacity by
0.4mt / year
-------------------------------------------------------------------------------
Ongoing projects
-------------------------------------------------------------------------------
Region Site Project Capacity / Forecast
particulars completion
-------------------------------------------------------------------------------
USA AM/NS Calvert Slab yard Increase coil 2H 2016
expansion production level
up to 5.3mt/year
coils.
-------------------------------------------------------------------------------
NAFTA ArcelorMittal Phase 2: Convert Allow the 2016
Dofasco (Canada) the current galvaline #4 to
galvanizing line produce 160kt
#4 to a Galvalume galvalume and
line 128kt galvanize
-------------------------------------------------------------------------------
Europe ArcelorMittal Krakow HRM extension Increase HRC 2016((c))
(Poland) capacity by
0.9mt/ year
HDG increase Increasing HDG 2016((c))
capacity by
0.4mt/ year
-------------------------------------------------------------------------------
Brazil Acindar (Argentina) New rolling mill Increase in 2016
rolling capacity
by 0.4mt / year
for bars for civil
construction
-------------------------------------------------------------------------------
Brazil ArcelorMittal Vega Expansion project Increase hot On hold
Do Sul (Brazil) dipped galvanizing
(HDG) capacity by
0.6mt / year and
cold rolling (CR)
capacity by 0.7mt
/ year
-------------------------------------------------------------------------------
Brazil Juiz de Fora Meltshop Increase in On hold((a))
(Brazil) expansion meltshop capacity
by 0.2mt / year
-------------------------------------------------------------------------------
Brazil Monlevade (Brazil) Sinter plant, Increase in liquid On hold
blast furnace and steel capacity by
meltshop 1.2mt / year;
Sinter feed
capacity of 2.3mt
/ year
-------------------------------------------------------------------------------
Mining Liberia Phase 2 expansion Increase On hold((d))
project production
capacity to 15mt/
year (high grade
sinter feed)
-------------------------------------------------------------------------------
a. Though the Monlevade wire rod expansion project and Juiz de Fora rebar
expansion were completed in 2015, and Juiz de Fora meltshop is expected to
be completed in 2017, the Company does not expect to increase shipments
until domestic demand improves.
b. First production in Baffinland was in 4Q 2014, with first shipments taking
place during 3Q 2015 following the completion of shiploader and port
infrastructure.
c. 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 capex 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.
d. ArcelorMittal remains committed to Liberia where it operates a full value
chain of mine, rail and port. It has been operating the mine on a DSO basis
since 2011 and produced 4.3Mt in 2015. In the current initial DSO phase,
significant cost reduction and re-structuring has continued to ensure
competitiveness at current prices. Drilling for DSO resource extension
recently commenced and in 2016 the operation has been right sized to 3mtpa
to focus on its 'natural' Atlantic markets. This repositioning for size and
competitiveness also extends the life of the DSO phase as ArcelorMittal
considers the appropriate next phase of development.
ArcelorMittal had previously announced a Phase 2 project that envisaged the
construction of 15 million tonnes of concentrate sinter fines capacity and
associated infrastructure. The phase 2 project was initially delayed due to
the declaration of force majeure (FM) by contractors in August 2014 due to
the Ebola virus outbreak in West Africa. Whilst rapid price declines over
the period since force majeure have led to a reassessment of the project,
ArcelorMittal is considering transitioning production to a higher grade
sinter fines product but now in a phased approach as opposed to a major step
up from 15 to 20mtpa as originally envisaged in phase 2. Extensive tonnage
of concentrator feed material is already exposed in readiness for a
concentrated sinter fines, and ArcelorMittal also has options in its
concession to mine higher grade, lower gangue DSO ores. Work continues in
2016 to define the best business option.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown 4Q 15 3Q 15 4Q 14 12M 15 12M 14
Sales 3,600 4,371 5,166 17,293 21,162
--------------------------------------------------------------------
EBITDA 273 340 341 891 1,206
--------------------------------------------------------------------
Depreciation 154 151 178 616 706
--------------------------------------------------------------------
Impairment 507 - 114 526 114
--------------------------------------------------------------------
Exceptional charges 353 101 - 454 -
--------------------------------------------------------------------
Operating (loss) /income (741) 88 49 (705) 386
--------------------------------------------------------------------
--------------------------------------------------------------------
Crude steel production (kt) 5,136 5,976 6,142 22,795 25,036
--------------------------------------------------------------------
Steel shipments (kt) 4,581 5,620 5,805 21,306 23,074
--------------------------------------------------------------------
Average steel selling price (US$/t) 706 698 824 732 843
--------------------------------------------------------------------
NAFTA segment crude steel production decreased 14.1% to 5.1 million tonnes in
4Q 2015 as compared to 6.0 million tonnes for 3Q 2015.
Steel shipments in 4Q 2015 decreased 18.5% to 4.6 million tonnes as compared to
5.6 million tonnes in 3Q 2015, primarily driven by a 19.6% decrease in flat
product steel shipments (mainly Mexico and US) and 13.0% decrease in long
product shipment volumes.
Sales in 4Q 2015 decreased by 17.6% to $3.6 billion as compared to 3Q 2015,
primarily due to lower steel shipment volumes as discussed above, offset by
higher average steel selling prices (due to a mix effect a lower percentage of
slab shipments from the Mexican operations).
EBITDA in 4Q 2015 decreased 19.6% to $273 million as compared to $340 million in
3Q 2015 primarily due to lower steel volumes partially offset by a better
product mix of sales (noted above), lower costs and improved performance in
Calvert. EBITDA in 4Q 2015 declined 20% as compared to 4Q 2014 primarily due to
a negative price-cost squeeze resulting from significantly lower average steel
selling prices (-14.3%) with declines in both flat (-13.4%) and long products (-
23.2%), as well as lower steel shipment volumes (-21.1%) for both flat (-21.9%)
and long products (-15.1%).
Operating performance in 4Q 2015 was impacted by impairments totalling $507
million with respect to the intended sale of Long Carbon facilities in the US
(ArcelorMittal LaPlace, Steelton and Vinton) ($0.2 billion), and following
planned asset optimization at Indiana Harbor East and West in the US ($0.3
billion). In addition, operating performance in 4Q 2015 and 3Q 2015 was impacted
by exceptional inventory related charges of $353 million and $101 million,
respectively, following the rapid decline of steel prices. Operating performance
in 4Q 2014 was impacted by impairments of $114 million primarily related to the
idling of the steel shop and rolling facilities of Indiana Harbour Long carbon
operations in the US.
Brazil
(USDm) unless otherwise shown 4Q 15 3Q 15 4Q 14 12M 15 12M 14
Sales 2,092 2,125 2,543 8,503 10,037
--------------------------------------------------------------------
EBITDA 181 313 546 1,231 1,845
--------------------------------------------------------------------
Depreciation 87 78 99 336 457
--------------------------------------------------------------------
Impairment 176 - - 176 -
--------------------------------------------------------------------
Exceptional charges 52 39 - 91 -
--------------------------------------------------------------------
Operating (loss) /income (134) 196 447 628 1,388
--------------------------------------------------------------------
--------------------------------------------------------------------
Crude steel production (kt) 2,850 2,953 2,758 11,612 10,524
--------------------------------------------------------------------
Steel shipments (kt) 2,873 3,125 2,895 11,540 10,376
--------------------------------------------------------------------
Average steel selling price (US$/t) 565 622 792 647 867
--------------------------------------------------------------------
Brazil segment crude steel production decreased 3.5% to 2.9 million tonnes in
4Q 2015 as compared to 3.0 million tonnes in 3Q 2015.
Steel shipments in 4Q 2015 decreased by 8.1% to 2.9 million tonnes as compared
to 3Q 2015, primarily due to a 4.5% decrease in flat steel shipments and a
13.5% decrease in long product shipments due to a continued slowdown in demand.
Sales in 4Q 2015 decreased by 1.6% to $2.1 billion as compared to 3Q 2015, due
to lower average steel selling prices (-9.3%), and lower steel shipments
discussed above.
EBITDA in 4Q 2015 declined by 42.1% to $181 million as compared to $313 million
in 3Q 2015 on account of lower average steel selling prices (primarily flat
steel products -11.2%) and lower steel shipment volumes. EBITDA in 4Q 2015 was
66.8% lower as compared to 4Q 2014 primarily due to lower average steel selling
prices (-28.7%) and lower steel shipments (-0.7%).
Operating performance in 4Q 2015 was impacted by impairment of $176 million
related to Point Lisas (Trinidad and Tobago) currently idled, and exceptional
charges of $52 million relating to inventory write down in Point Lisas.
Operating performance in 3Q 2015 was impacted by exceptional charges of $39
million relating to the write-down of inventories following the rapid decline of
steel prices.
Europe
(USDm) unless otherwise shown 4Q 15 3Q 15 4Q 14 12M 15 12M 14
Sales 7,075 7,671 9,023 31,893 39,552
----------------------------------------------------------------------
EBITDA 544 553 557 2,393 2,304
----------------------------------------------------------------------
Depreciation 307 293 343 1,192 1,510
----------------------------------------------------------------------
Impairment 398 - 57 398 57
----------------------------------------------------------------------
Exceptional charges 345 287 - 632 -
----------------------------------------------------------------------
Operating (loss)/ income (506) (27) 157 171 737
----------------------------------------------------------------------
----------------------------------------------------------------------
Crude steel production (kt) 9,988 10,880 10,742 43,853 43,419
----------------------------------------------------------------------
Steel shipments (kt) 9,473 9,646 9,610 40,676 39,639
----------------------------------------------------------------------
Average steel selling price (US$/t) 568 614 721 609 773
----------------------------------------------------------------------
Europe segment crude steel production decreased by 8.2% to 10.0 million tonnes
in 4Q 2015, as compared to 3Q 2015.
Steel shipments in 4Q 2015 decreased by 1.8% to 9.5 million tonnes as compared
to 3Q 2015, primarily due to a 4.5% decrease in flat product shipment volumes,
offset in part by a 4.8% increase in long steel shipment volumes.
Sales in 4Q 2015 declined 7.8% to $7.1 billion as compared to 3Q 2015, primarily
due to lower average steel selling prices (noted below) and lower steel
shipments as discussed above. Average steel selling prices declined by 7.4%
during 4Q 2015, as flat and long products declined 5.9% and 11.4%, respectively.
EBITDA in 4Q 2015 decreased by 1.6% to $544 million as compared to $553 million
in 3Q 2015, mainly driven by lower steel shipment volumes and lower average
steel selling prices offset in part by lower raw material costs, lower
maintenance costs and continuing cost reduction efforts. EBITDA in 4Q 2015
declined by 2.3% as compared to 4Q 2014 primarily on account of lower average
steel selling prices (-21.2%) and lower steel shipments (-1.4%), offset in part
by lower costs and efficiency improvements.
Operating performance in 4Q 2015 was impacted by impairments of $398 million
primarily in connection with the idling for an indefinite time of the
ArcelorMittal Sestao plant in Spain. Operating performance in 4Q 2015 and
3Q 2015 was also impacted by exceptional charges of $345 million and $287
million, respectively, relating to the write-down of inventories following the
rapid decline of steel prices. Operating performance in 4Q 2014 was impacted by
impairment charges of $57 million related to the closure of mill C in Rodange,
Luxembourg.
ACIS[vii]
(USDm) unless otherwise shown 4Q 15 3Q 15 4Q 14 12M 15 12M 14
Sales 1,250 1,508 1,967 6,128 8,268
--------------------------------------------------------------------
EBITDA 61 35 147 317 620
--------------------------------------------------------------------
Depreciation 90 104 135 408 525
--------------------------------------------------------------------
Impairment 267 27 - 294 -
--------------------------------------------------------------------
Exceptional charges 159 80 - 239 -
--------------------------------------------------------------------
Operating (loss)/ income (455) (176)
Unternehmensinformation / Kurzprofil:
Datum: 05.02.2016 - 07:01 Uhr
Sprache: Deutsch
News-ID 448883
Anzahl Zeichen: 65595
contact information:
Town:
London
Kategorie:
Business News
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"ArcelorMittal reports fourth quarter 2015 and full year 2015 results"
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