ArcelorMittal reports second quarter 2016 and half year 2016 results
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports second quarter 2016 and half year 2016 results
. Processed and transmitted by NASDAQ OMX Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, July 29, 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[1]
for the three and six month periods ended June 30, 2016.
Highlights:
* Health and safety: LTIF rate of 0.79x in 2Q 2016 as compared to 0.72x in
1Q 2016 and 0.68x in 2Q 2015
* EBITDA of $1.8 billion in 2Q 2016, nearly double as compared to $0.9 billion
in 1Q 2016; 26.5% higher YoY
* Operating income of $1.9 billion in 2Q 2016 higher as compared to $0.3
billion in 1Q 2016, primarily as a result of one-time gain from employee
benefits at ArcelorMittal USA[2] ($0.8 billion) and higher sales driven by
improved steel selling prices
* Net income of $1.1 billion in 2Q 2016 (including one-time $0.8 billion gain
from employee benefits at ArcelorMittal USA) as compared to a net loss of
$0.4 billion in 1Q 2016 and net income of $0.2 billion in 2Q 2015
* Steel shipments of 22.1Mt in 2Q 2016, an increase of 2.9% as compared to
1Q 2016; stable YoY
* Gross debt decreased to $15.1 billion at June 30, 2016, as compared to $20.2
billion at March 31, 2016
* Net debt decreased to $12.7 billion as of June 30, 2016, as compared to
$17.3 billion at March 31, 2016 mainly due to proceeds from the rights issue
($3.1 billion), asset sales ($1.1 billion), working capital release ($0.2
billion) offset in part by $0.2 billion premium on early repayment of debt
Key developments:
* Action 2020: United Steelworkers (USW) union deal has been ratified by
members and ArcelorMittal USA is now progressing with a "footprint
optimization project" at its Indiana Harbor steelmaking complex in East
Chicago, Indiana
* Automotive: ArcelorMittal announces its intention to further expand its
portfolio of automotive steel by launching two new products in 2017, Usibor®
2000 and Ductibor® 1000
Outlook and guidance:
* Despite the steel spread recovery losing momentum in recent weeks, the
impact of lagged prices will be an important support for operating results
as we move into a period of seasonally slower steel demand
* Improved market conditions are likely to consume working capital in 2016
(current estimate of ~$0.5 billion); the Company nevertheless expects cash
flows from operating activities to exceed capex in 2016
Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 14,743 13,399 16,890 28,142 34,008
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Operating income 1,873 275 579 2,148 1,150
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Net income/(loss) attributable to equity 1,112 (416) 179 696 (549)
holders of the parent
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Basic earnings/(loss) per share (US$) 0.38 (0.23) 0.10 0.29 (0.31)
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Operating income/tonne (US$/t) 85 13 26 49 26
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EBITDA 1,770 927 1,399 2,697 2,777
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EBITDA/ tonne (US$/t) 80 43 63 62 63
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Steel-only EBITDA/ tonne (US$/t) 73 39 58 56 58
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Crude steel production (Mt) 23.1 23.2 24.0 46.3 47.8
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Steel shipments (Mt) 22.1 21.5 22.2 43.6 43.8
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Own iron ore production (Mt) 13.5 14.1 16.4 27.6 31.9
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Iron ore shipped at market price (Mt) 9.6 7.8 10.8 17.4 20.1
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Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"ArcelorMittal enjoyed a stronger second quarter due largely to a more
supportive pricing environment in our leading markets. Sales and EBITDA
increased in all segments, including mining. We also significantly strengthened
our balance sheet with proceeds from the rights issue, the Gestamp sale and
working capital release reducing net debt to $12.7 billion.
The company continues to focus on the implementation of our strategic
initiatives, in particular Action 2020, to support profitability. Although the
industry continues to face the challenges of structural overcapacity, we are
seeing better market conditions compared with the second half of 2015 which lead
us to be cautiously optimistic about the remainder of the year."
Second quarter 2016 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the
investment community to discuss the second quarter period ended June 30, 2016
on:
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Date US Eastern time London CET
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Friday July 29, 2016 9.30am 2.30pm 3.30pm
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The dial in numbers:
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Location Toll free dial in numbers Local dial in numbers Participant
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UK local: 0800 0515 931 +44 (0)203 364 5807 28353006#
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US local: 1 86 6719 2729 +1 24 0645 0345 28353006#
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US (New York) 1 86 6719 2729 + 1 64 6663 7901 28353006#
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France: 0800 914780 +33 1 7071 2916 28353006#
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Germany: 0800 965 6288 +49 692 7134 0801 28353006#
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Spain: 90 099 4930 +34 911 143436 28353006#
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Luxembourg: 800 26908 +352 27 86 05 07 28353006#
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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 490167#
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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. 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, deteriorated to 0.79x in the second
quarter of 2016 ("2Q 2016") as compared to 0.72x for the first quarter of 2016
("1Q 2016"), and 0.68x for the second quarter of 2015 ("2Q 2015"). Deterioration
in health and safety performance within Mining, Brazil and Europe was offset in
part by improvement in NAFTA and ACIS segments.
Health and safety performance was essentially stable at 0.78x in the first six
months of 2016 ("1H 2016") as compared to 0.79x for the first six months of
2015 ("1H 2015"), with improvements within NAFTA, 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
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Lost time injury frequency rate 2Q 16 1Q 16 2Q 15 1H 16 1H 15
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Mining 0.84 0.75 0.57 0.83 0.59
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NAFTA 0.62 0.91 0.71 0.84 0.97
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Brazil 0.46 0.34 0.42 0.42 0.59
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Europe 1.11 0.78 0.97 0.97 1.05
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ACIS 0.53 0.69 0.39 0.61 0.47
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Total Steel 0.78 0.71 0.69 0.77 0.82
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Total (Steel and Mining) 0.79 0.72 0.68 0.78 0.79
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Key corporate responsibility highlights for 2Q 2016:
ArcelorMittal's actions in sustainability continue to receive positive
recognition from industry leaders, including important sustainability investment
indices:
* On April 28, 2016, ArcelorMittal marked the company's tenth annual Health
and Safety Day.
* ArcelorMittal's 2015 annual review, Structural Resilience, published April
28, 2016, was showcased as a good practice example by the International
Integrated Reporting Council for its concise presentation of value creation.
* On June 23, 2016, ArcelorMittal hosted its second annual sustainability
presentation to investors.
* ArcelorMittal operating units have published annual local sustainability
reports in South Africa, Germany, USA, Belgium, Canada, Brazil, Argentina
and Ukraine. ArcelorMittal USA and South Africa have published integrated
reports, contributing to ArcelorMittal's significant achievements in
corporate reporting.
* ArcelorMittal received highly commended recognition at the Business in the
Community Annual Responsible Business Awards, UPS International Disaster
Relief Award for its work mobilising the private sector response to the
2014-2015 Ebola outbreak in West Africa.
Analysis of results for the six months ended June 30, 2016 versus results for
the six months ended June 30, 2015
Total steel shipments for 1H 2016 declined 0.5% at 43.6 million metric tonnes as
compared with 43.8 million metric tonnes for 1H 2015, primarily due to lower
shipments in Brazil -6.9%, NAFTA -1.8% and Europe -1.1% offset by higher
shipments in ACIS +9.0%. On a comparable basis, total steel shipments for
1H 2016 were stable at 43.5 million metric tonnes as compared for 1H 2015
(considering the sale of long steel producing subsidiaries in the US (LaPlace
and Vinton) in 1H 2016).
Sales for 1H 2016 decreased by 17.2% to $28.1 billion as compared with $34.0
billion for 1H 2015, primarily due to lower average steel selling prices (-
17.0%), lower seaborne iron ore reference prices (-14.1%), and lower marketable
iron ore shipments (-13.7%).
Depreciation of $1.3 billion for 1H 2016 was lower as compared to $1.6 billion
for 1H 2015, primarily on account of foreign exchange impact following the
depreciation of the US dollar against major currencies and savings from reduced
asset base following impairments recorded at the end of 2015. FY 2016
depreciation is expected to be approximately $2.8 billion (based on current
exchange rates).
Impairment charges for 1H 2016 were $49 million related to the sale of
ArcelorMittal Zaragoza in Spain, as compared to impairment charges of $19
million for 1H 2015 relating to the closure of the Georgetown facility in the
USA.
Exceptional income for 1H 2016 was $832 million relating to a one-time gain on
employee benefits following the signing of the new US labour contract.
Exceptional items for 1H 2015 were nil.
Operating income for 1H 2016 was $2.1 billion as compared to $1.2 billion in
1H 2015. Operating results for 1H 2015 were negatively impacted by a $69 million
provision primarily related to onerous hot rolled and cold rolled contracts in
the US (NAFTA). Operating results for 1H 2016 were positively impacted by
exceptional income as discussed above.
Income from investments in associates, joint ventures and other investments in
1H 2016 was $492 million as compared to income in 1H 2015 of $123 million.
Income from investments in associates, joint ventures and other investments for
1H 2016 included $329 million related to gain on disposal of Gestamp[3] and
improved performance of Calvert joint venture and Chinese investees. Income from
investments in associates, joint ventures and other investments in 1H 2016 and
1H 2015 includes the annual dividend received from Erdemir.
Net interest expense (including interest expense and interest income) was lower
at $638 million in 1H 2016, as compared to $648 million in 1H 2015, driven by
savings from early bond repayments (see recent developments for details on bonds
repaid in 2Q 2016) and repayment at maturity on June 3, 2016, of the ?1 billion
9.375% bond. The Company continues to expect full year 2016 net interest expense
of approximately $1.1 billion.
Foreign exchange and other net financing costs were $441 million for 1H 2016 as
compared to foreign exchange and other net financing costs of $829 million for
1H 2015. Foreign exchange and other net financing costs for 1H 2016 include
foreign exchange gain of $60 million as compared to a loss of $423 million for
1H 2015, mainly on account of USD depreciation of 2% against the Euro (versus
8% appreciation in 1H 2015) and 22% depreciation against BRL (versus 14%
appreciation in 1H 2015). This foreign exchange gain is largely non-cash and
primarily relates to the gain from the impact of the USD depreciation on Euro
denominated deferred tax assets, partially offset by foreign exchange loss on
euro debt. Foreign exchange and other net financing costs for 1H 2016 also
includes $237 million one-off premium expense on the early redemption of bonds.
ArcelorMittal recorded an income tax expense of $853 million for 1H 2016 as
compared to an income tax expense of $334 million for 1H 2015. The tax expense
in 1H 2016 includes derecognition of deferred tax assets (DTA) amounting to $0.7
billion in Luxembourg. This derecognition (or impairment) is related to revised
expectations of DTA recoverability in US dollar terms, and is not related to a
deterioration of expected future taxable income.
Non-controlling interests for both 1H 2016 and 1H 2015 amounted to $12 million
and $11 million, respectively, representing 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 income for 1H 2016 was $696 million, or $0.29 earnings per
share, as compared to net loss for 1H 2015 of $549 million, or $0.31 loss per
share.
Analysis of results for 2Q 2016 versus 1Q 2016 and 2Q 2015
Total steel shipments for 2Q 2016 were 2.9% higher at 22.1 million metric tonnes
as compared with 21.5 million metric tonnes for 1Q 2016 (primarily due to
improved shipments in Brazil +8.8%, Europe +4.2% and ACIS +4.1%), and stable as
compared to 22.2 million metric tonnes for 2Q 2015. On a comparable basis,
total steel shipments for 2Q 2016 were 3.5% higher at 22.1 million metric tonnes
as compared with 21.4 metric tonnes for 1Q 2016 (considering the sale of long
steel producing subsidiaries in the US, LaPlace and Vinton).
Sales for 2Q 2016 were $14.7 billion as compared to $13.4 billion for 1Q 2016
and $16.9 billion for 2Q 2015. Sales in 2Q 2016 were 10.0% higher as compared to
1Q 2016, primarily due to higher average steel selling prices (+7.7%), steel
shipments (+2.9%), seasonally higher market-priced iron ore shipments (+23.2%)
and higher iron ore reference prices (+15.2%). Sales in 2Q 2016 were 12.7% lower
as compared to 2Q 2015 primarily due to lower average steel selling prices (-
11.8%), lower market-priced iron ore shipments (-11.1%) and lower iron ore
reference prices (-4.8%).
Depreciation was higher at $680 million for 2Q 2016 as compared to $652 million
in 1Q 2016 primarily on account of foreign exchange impacts following the
depreciation of the US dollar against major currencies. Depreciation was lower
in 2Q 2016 as compared to $801 million for 2Q 2015 primarily due to decreased
asset base following impairments recorded at the end of 2015 and foreign
exchange impacts.
Impairment charges for 2Q 2016 were $49 million related to the sale of
ArcelorMittal Zaragoza facility in Spain. Impairment charges for 1Q 2016 were
nil. Impairment charges for 2Q 2015 were $19 million relating to the closure of
the Georgetown facility in the US.
Exceptional income for 2Q 2016 was $832 million relating to a one-time gain on
employee benefits following the signing of the new US labour contract.
Exceptional items for 1Q 2016 and 2Q 2015 were nil.
Operating income for 2Q 2016 was $1.9 billion as compared to operating income of
$275 million for 1Q 2016 and operating income of $579 million in 2Q 2015.
Operating results for 2Q 2016 were impacted by exceptional income discussed
above.
Income from investments in associates, joint ventures and other investments for
2Q 2016 was $168 million as compared to $324 million in 1Q 2016 (which included
$329 million related to gain on disposal of Gestamp). Income from investments in
associates, joint ventures and other investments for 2Q 2016 as compared to
1Q 2016 benefited from improved performance of Calvert joint venture, Spanish
and Chinese investees, and also includes an annual dividend received from
Erdemir ($44 million). Income from investments in associates, joint ventures and
other investments for 2Q 2016 was higher as compared to $125 million in 2Q 2015
primarily due to improved performance of Calvert and Chinese investees.
Net interest expense in 2Q 2016 was $306 million as compared to $332 million in
1Q 2016 and $325 million in 2Q 2015. Net interest expense was lower in 2Q 2016
as compared to 1Q 2016 and 2Q 2015 due to savings from early bond repayments
(see recent developments for details on bonds repaid in 2Q 2016) and repayment
at maturity on June 3, 2016, of the ?1 billion 9.375% bond.
Foreign exchange and other net financing costs in 2Q 2016 was $450 million as
compared to foreign exchange and other net financing gain of $9 million for
1Q 2016 and costs of $73 million for 2Q 2015. Foreign exchange and other net
financing costs for 2Q 2016 include a foreign exchange loss of $47 million as
compared to a gain of $107 million for 1Q 2016 mainly on account of USD
appreciation of 2.5% against the Euro (versus 4.6% depreciation in 1Q 2016) and
10.9% depreciation against BRL (versus 9.7% depreciation in 1Q 2016). This
foreign exchange loss is largely non-cash and primarily relates to the loss from
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 2Q 2016 also include $237 million one-off premium
expense on the early redemption of bonds. Foreign exchange and other net
financing costs for 2Q 2015 include foreign exchange gain of $115 million mainly
on account of USD depreciation of 4% against the Euro and 3.4% depreciation
against BRL relative to the prior period.
ArcelorMittal recorded an income tax expense of $153 million for 2Q 2016 as
compared to income tax expense of $700 million for 1Q 2016, and income tax
expense of $124 million for 2Q 2015. The tax expense in 1Q 2016 included a
derecognition of deferred tax assets (DTA) amounting to $0.7 billion in
Luxembourg.
Non-controlling interests for 2Q 2016 of $20 million 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 income for 1Q 2016 amounted to $8 million primarily related to losses
generated by ArcelorMittal South Africa. 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.
ArcelorMittal recorded net income for 2Q 2016 of $1.1 billion, or $0.38 earnings
per share as compared to net loss for 1Q 2016 of $416 million, or $0.23 loss per
share, and as compared to net income of $179 million, or $0.10 earnings per
share for 2Q 2015.
Capital expenditure projects
The following tables summarize the Company's principal growth and optimization
projects involving significant capital expenditures.
Completed projects in most recent quarters
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Region Site Project Capacity / Actual
particulars completion
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USA AM/NS Calvert Phase 1: Slab yard Increase coil 1Q 2016
expansion - production level
Expansion of Bay 4 up to 4.6Mt/year
and minor coils
installations for
Bay 5
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Brazil Acindar New rolling mill Increase in 1Q 2016
(Argentina) rolling capacity
by 0.4Mt/year for
bars for civil
construction
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Brazil Monlevade (Brazil) Wire rod production Increase in 4Q 2015((a))
expansion capacity of
finished products
by 1.1Mt/year
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Canada Baffinland Early revenue phase Production 3Q 2015((b))
capacity
3.5Mt/year (iron
ore)
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Ongoing projects
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Region Site Project Capacity / Forecast
particulars completion
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USA Indiana Harbor Indiana Harbor Restoration of 2018
"footprint 80" HSM; new
optimization caster at No.3
project" Steelshop and
upgrades at
Indiana Harbor
finishing and
logistics
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USA AM/NS Calvert Phase 2: Slab yard Increase coil 2017
expansion (Bay 5) production level
from 4.6Mt/year
to 5.3Mt/year
coils
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NAFTA ArcelorMittal Phase 2: Convert Allow the 2016
Dofasco (Canada) the current galvaline #4 to
galvanizing line #4 produce 160kt
to a Galvalume line galvalume and
128kt galvanize
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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
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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
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Brazil Juiz de Fora Meltshop expansion Increase in On hold((a))
(Brazil) meltshop
capacity by
0.2Mt/year
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Brazil Monlevade (Brazil) Sinter plant, blast Increase in On hold
furnace and liquid steel
meltshop capacity by
1.2Mt/year;
Sinter feed
capacity of
2.3Mt/year
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Mining Liberia Phase 2 expansion Increase On hold((d))
project production
capacity to
15Mt/year (high
grade sinter
feed)
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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 was restarting
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 Liberia is considering moving ore extraction from its depleting
DSO (direct shipping ore) deposit at Tokadeh to the nearby, low strip ratio and
higher grade DSO Gangra deposit, by 3Q 2017. In the current initial DSO phase at
Tokadeh, significant cost reduction and restructuring continued to ensure the
mine's competitiveness at current prices. Following a period of exploration
cessation caused by the onset of Ebola, ArcelorMittal Liberia recommenced
drilling for DSO resource extensions in late 2015. In 2016 the operation at
Tokadeh was right sized to 3Mtpa to focus on its 'natural' Atlantic markets and
this will continue in 2016 at rates between 2Mtpa and 3Mtpa to maintain the life
of the DSO phase as ArcelorMittal finalises the transition to the appropriate
next phase of development. The nearby Gangra deposit is now the preferred next
development in a staged approach as opposed to the originally planned phase 2
step up to 15Mtpa of concentrated sinter fine ore that was delayed in August
2014 due to the declaration of force majeure by contractors following the Ebola
virus outbreak, and then reassessed following rapid iron ore price declines over
the period since. Accordingly, definition drilling has begun in Gangra.
ArcelorMittal remains committed to Liberia where it operates a full value chain
of mine, rail and port and where it has been operating the mine on a DSO basis
since 2011. With 2 billion tonnes of iron ore resource in its lease,
ArcelorMittal Liberia presents a strong, competitive source of product ore for
the international market based on continuing DSO mining and then moving to a
long term sinter feed and concentration phase. Extensive tonnage of concentrator
feed material is already exposed in readiness for the planned concentrated
sinter fines phase.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 3,920 3,822 4,545 7,742 9,322
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Operating income/(loss) 1,209 205 51 1,414 (52)
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Depreciation 136 134 155 270 311
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Impairment - - 19 - 19
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Exceptional income 832 - - 832 -
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EBITDA 513 339 225 852 278
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Crude steel production (kt) 5,735 5,644 5,775 11,379 11,683
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Steel shipments (kt) 5,443 5,463 5,642 10,906 11,105
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Average steel selling price (US$/t) 660 635 726 647 760
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NAFTA segment crude steel production increased 1.6% to 5.7 million tonnes in
2Q 2016 as compared to 5.6 million tonnes for 1Q 2016.
Steel shipments in 2Q 2016 declined marginally by 0.4% to 5.4 million tonnes as
compared to 5.5 million tonnes 1Q 2016, primarily driven by a 7.1% decrease in
long product shipment volumes (due in part to a scope change following sale of
long steel producing subsidiaries in the US, LaPlace and Vinton), offset in part
by a 1.6% increase in flat product steel shipments. On a comparable basis,
total steel shipments for 2Q 2016 improved by 1.9% to 5.4 million metric tonnes
as compared with 5.3 metric tonnes for 1Q 2016, considering the sale of LaPlace
and Vinton.
Sales in 2Q 2016 increased by 2.6% to $3.9 billion as compared to 1Q 2016,
primarily due to higher average steel selling prices (+3.9%). Average steel
selling price for flat products and long products improved +3.8% and +2.8%,
respectively.
Operating income in 2Q 2016 increased to $1.2 billion as compared to an
operating income of $205 million in 1Q 2016 and operating income of $51 million
in 2Q 2015. Operating performance for 2Q 2016 was positively impacted by a one-
time gain of $0.8 billion on employee benefits following the signing of the new
US labour contract. Operating performance for 2Q 2015 was impacted by $19
million related to the closure of the Georgetown facility in the US.
EBITDA in 2Q 2016 increased 51.2% to $513 million as compared to $339 million in
1Q 2016 primarily due to higher average steel selling prices and lower costs.
EBITDA in 2Q 2016 improved significantly as compared to $225 million in 2Q 2015
due to improved costs, positive scope change impact following the sale of long
steel producing subsidiaries in the US (LaPlace and Vinton) as well as improved
performance of the Calvert, offset in part by lower average steel selling prices
(-9.1%) and lower steel shipments (-3.5%).
Brazil
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 1,488 1,255 2,167 2,743 4,286
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Operating income 149 89 275 238 566
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Depreciation 64 56 85 120 171
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EBITDA 213 145 360 358 737
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Crude steel production (kt) 2,800 2,667 2,934 5,467 5,809
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Steel shipments (kt) 2,689 2,472 2,835 5,161 5,542
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Average steel selling price (US$/t) 515 474 695 495 704
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Brazil segment crude steel production increased 5% to 2.8 million tonnes in
2Q 2016 as compared to 2.7 million tonnes in 1Q 2016.
Steel shipments in 2Q 2016 increased by 8.8% to 2.7 million tonnes as compared
to 1Q 2016, primarily due to a 11.8% increase in flat steel shipments (primarily
driven by increased slab exports from Brazil) and a 5.6% increase in long
product shipments.
Sales in 2Q 2016 increased by 18.6% to $1.5 billion as compared to 1Q 2016, due
to higher average steel selling prices +8.8% (primarily flat steel prices up
19.0%) and higher steel shipments discussed above.
Operating income in 2Q 2016 increased 67.6% to $149 million as compared to an
operating income of $89 million in 1Q 2016 and lower as compared to operating
income of $275 million in 2Q 2015.
EBITDA in 2Q 2016 increased by 46.4% to $213 million as compared to $145 million
in 1Q 2016 on account of higher average steel selling prices and higher steel
shipment volumes.
EBITDA in 2Q 2016 was lower as compared to 2Q 2015 by 40.8% due to lower average
steel selling prices (-25.9%), lower steel shipments (-5.2%) due to weaker
demand as well as tubular operations in Venezuela impacted by currency
devaluation[4].
Europe
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 7,810 7,151 8,547 14,961 17,147
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Operating income 383 86 387 469 704
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Depreciation 293 277 293 570 592
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Impairment 49 - - 49 -
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EBITDA 725 363 680 1,088 1,296
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Crude steel production (kt) 10,720 11,171 11,644 21,891 22,985
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Steel shipments (kt) 10,886 10,444 10,895 21,330 21,557
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Average steel selling price (US$/t) 562 530 617 546 625
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Europe segment crude steel production decreased by 4% to 10.7 million tonnes in
2Q 2016, as compared to 1Q 2016 primarily due to reline extended ramp up at
blast furnace #4 Dunkirk (France) and ongoing blast furnace reline at Krakow
(Poland).
Steel shipments in 2Q 2016 increased by 4.2% to 10.9 million tonnes as compared
to 1Q 2016, primarily due to an increase in flat and long product shipments, up
+2.8% and +8.2%, respectively, benefiting from seasonally improved demand.
Sales in 2Q 2016 increased 9.2% to $7.8 billion as compared to 1Q 2016,
primarily due to higher steel shipments as discussed above, and higher average
steel selling prices. Average steel selling prices increased by 6.0% during
2Q 2016, as flat and long products improved +6.0% and +9.0%, respectively.
Operating income in 2Q 2016 increased significantly to $383 million as compared
to an operating income of $86 million in 1Q 2016 and stable as compared to
operating income of $387 million in 2Q 2015. Operating performance in 2Q 2016
was negatively impacted by $49 million of impairment related to the sale of
ArcelorMittal Zaragoza facility in Spain.
EBITDA in 2Q 2016 almost doubled to $725 million as compared to $363 million in
1Q 2016, reflecting improved market conditions with higher average steel selling
prices, higher steel shipment volumes and ongoing benefits of the transformation
program.
EBITDA in 2Q 2016 improved by 6.6% as compared to 2Q 2015 primarily on account
of lower costs and efficiency improvements offset in part by lower average steel
selling prices (-9.0%).
ACIS[5]
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 1,581 1,192 1,649 2,773 3,370
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Operating (loss)/ income 162 (15) (18) 147 7
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Depreciation 80 76 106 156 214
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EBITDA 242 61 88 303 221
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Crude steel production (kt) 3,926 3,668 3,696 7,594 7,299
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Steel shipments (kt) 3,453 3,315 3,205 6,768 6,211
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Average steel selling price (US$/t) 409 320 450 365 477
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ACIS segment crude steel production in 2Q 2016 increased by 7% to 3.9 million
tonnes as compared to 1Q 2016 driven by higher production at Kazakhstan and
Ukraine (benefited from improved operating performance), as well as South Africa
on account of improved market conditions.
Steel shipments in 2Q 2016 increased by 4.1% to 3.5 million tonnes as compared
to 1Q 2016 primarily due to increased shipments in the CIS.
Sales in 2Q 2016 increased by 32.7% to $1.6 billion as compared to 1Q 2016,
primarily due to higher average steel selling prices (+27.8%) and higher steel
shipments.
Operating income in 2Q 2016 increased to $162 million as compared to an
operating loss of $15 million in 1Q 2016 and operating loss of $18 million in
2Q 2015.
EBITDA in 2Q 2016 of $242 million was significantly higher as compared to $61
million in 1Q 2016, primarily due to higher average steel selling prices and
steel shipments.
EBITDA in 2Q 2016 was higher as compared to $88 million in 2Q 2015, primarily
due to higher steel shipments (+7.7%) and improved costs offset in part by lower
average steel selling prices (-9%). EBITDA improved primarily in our CIS
operations.
Mining
(USDm) unless otherwise shown 2Q 16 1Q 16 2Q 15 1H 16 1H 15
Sales 809 600 964 1,409 1,722
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Operating income/ (loss) 62 (2) (42) 60 (78)
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Depreciation 101 100 157 201 307
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EBITDA 163 98 115 261 229
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Own iron ore production ((a) )(Mt) 13.5 14.1 16.4 27.6 31.9
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Iron ore shipped externally and internally at 9.6 7.8 10.8 17.4 20.1
market price ((b) )(Mt)
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Iron ore shipment - cost plus basis (Mt) 5.8 5.3 6.4 11.1 10.5
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Own coal production((a) )(Mt) 1.4 1.4 1.5 2.9 3.1
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Coal shipped externally and internally at 0.7 0.9 0.7 1.6 1.3
market price((b) )(Mt)
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Coal shipment - cost plus basis (Mt) 0.8 0.8 0.9 1.7 1.7
-------------------------------------------------------------------------------
(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 in 2Q 2016 decreased by 4.8% to 13.5 million metric
tonnes as compared to 1Q 2016 due to lower production at CIS (operationally
related), US (seasonal decline) and Liberia operations. Own iron ore production
in 2Q 2016 was lower by 17.7% as compared to 2Q 2015 primarily due to lower
production in Canada and CIS due to operational issues as well as Mexico and
Liberia as discussed below.
With ongoing focus on our most competitive iron ore operations: Liberia
production is currently being maintained at approximately 2-3 million metric
tonnes per annum and the Volcan mine in Mexico was suspended in October 2015 (2
million metric tonnes annual impact).
Market-priced iron ore shipments in 2Q 2016 increased by 23.2% to 9.6 million
metric tonnes as compared to 1Q 2016 primarily driven by higher seasonal
shipments from ArcelorMittal Mines Canada offset in part by lower Liberia
shipments (in line with revised scope of operations). ArcelorMittal Mines Canada
had record shipments of 7.4 million tonnes during 2Q 2016, and remains on track
for FY 2016 shipment growth of greater than 26 million metric tonnes. Market-
priced iron ore shipments in 2Q 2016 decreased by 11.1% as compared to 2Q 2015
driven by decreased shipments primarily in Mexico and Liberia. Market-priced
iron ore shipments for FY 2016 are expected to decline by approximately 10%
versus FY 2015.
Own coal production in 2Q 2016 remained stable at 1.4 million metric tonnes as
compared 1Q 2016. Own coal production in 2Q 2016 decreased 4.6% as compared to
2Q 2015, primarily due to lower production at our Kazakhstan operations.
Market-priced coal shipments in 2Q 2016 were 18.4% lower at 0.7 million metric
tonnes as compared to 1Q 2016 primarily due to decreased shipments at Princeton
(US) offset in part by higher shipments in Kazakhstan. Market-priced coal
shipments in 2Q 2016 was stable as compared to 2Q 2015.
Operating income in 2Q 2016 increased to $62 million as compared to an operating
loss of $2 million in 1Q 2016 and operating loss of $42 million in 2Q 2015.
Operating income increased for reasons mentioned below.
EBITDA in 2Q 2016 increased 66.9% to $163 million as compared to $98 million in
1Q 2016 primarily due to higher market-priced iron ore shipment volumes (+23.2%)
and higher seaborne iron ore market reference prices (+15.2%).
EBITDA in 2Q 2016 was 41.6% higher as compared to $115 million in 2Q 2015,
primarily due lower unit iron ore cash costs (unit iron ore cash costs down 15%
year-on-year) offset in part by lower seaborne iron ore market reference prices
(-4.8%) and lower market-priced iron ore shipments (-11.1%).
Liquidity and Capital Resources
For 2Q 2016, net cash provided by operating activities was $869 million as
compared to net cash used in operating activities of $690 million in 1Q 2016,
mainly driven by a seasonal release in operating working capital of $0.2 billion
as compared to a $1.2 billion investment in operating working capital in
1Q 2016[6].
Net cash provided by investing activities during 2Q 2016 was $538 million as
compared to net cash used in investing activities of $572 million in 1Q 2016 and
$419 million in 2Q 2015. Capital expenditure decreased to $521 million in
2Q 2016 as compared to $586 million in 1Q 2016 and $542 million in 2Q 2015. FY
2016 capital expenditure is expected to be approximately $2.4 billion.
Cash flow from other investing activities in 2Q 2016 of $1,059 million primarily
consisted of $1.0 billion proceeds from the sale of ArcelorMittal's stake in
Gestamp[7] and proceeds from the sale of long steel producing subsidiaries in
the US, LaPlace and Vinton ($0.1 billion). Cash flow from other investing
activities in 1Q 2016 of $14 million primarily consisted of proceeds from the
partial disposal of the Company's stake in Stalprodukt (second tranche). 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 and
proceeds related to the sale of certain European distribution assets.
Net cash used in financing activities for 2Q 2016 was $1.9 billion as compared
to net cash provided by financing activities of $140 million in 1Q 2016. Net
cash used in financing activities for 2Q 2016 primarily includes payments
totalling $4.9 billion primarily relating to bond repurchases pursuant to cash
tender offers ($2.1 billion); early redemption of the 4.5% Notes due February
25, 2017 ($1.4 billion) and ?1.0 billion in euro bond repayments at maturity
(all detailed below in recent development section), offset by proceeds from $3.1
billion rights issue.
During 2Q 2016 the Company paid dividends primarily to minority shareholders in
ArcelorMittal Mines Canada and Brazil (Bekaert) of $41 million. During 1Q 2016,
the Company paid dividends primarily to minority shareholders in Brazil
(Bekaert) $6 million. During 2Q 2015, the Company paid $331 million in dividends
to ArcelorMittal shareholders.
At June 30, 2016, the Company's cash and cash equivalents (including restricted
cash and short-term investments) amounted to $2.4 billion as compared to $2.9
billion at March 31, 2016.
Gross debt of $15.1 billion at June 30, 2016, decreased from $20.2 billion at
March 31, 2016 lower when compared to $21.3 billion at June 30, 2015. Gross debt
was lower at June 30, 2016 primarily due to repurchases of bonds following cash
tender offers ($2.1 billion); early redemption of the 4.5% Notes due February
25, 2017 ($1.4 billion) and bond repayment at maturity (?1 billion) as discussed
above.
As of June 30, 2016, net debt decreased to $12.7 billion as compared with $17.3
billion in March 31, 2016, and $16.6 billion as of June 30, 2015, largely on
account of proceeds from the rights issue ($3.1 billion), asset sale proceeds
($1.1 billion including $1.0 billion from the sale of ArcelorMittal's stake in
Gestamp and $0.1 billion from US Long products disposals) and working capital
release ($0.2 billion), offset in part by $0.2 billion premium on early
repayment of debt.
As of June 30, 2016 the Company had liquidity of $8.4 billion, consisting of
cash and cash equivalents (including restricted cash and short-term investments)
of $2.4 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
June 30, 2016, the average debt maturity was extended to 7.1 years from 5.9
years on March 31, 2016.
Key recent developments
* On June 30, 2016, ArcelorMittal and Marcegaglia announced they had submitted
an offer for the acquisition of Ilva in Italy. The submission of the bid is
the first step in a multi-stage process that will see only the environmental
part of the offer discussed for the next 120 days. Following this period the
government will provide more clarity on the next steps of the offer process.
* On June 23, 2016, ArcelorMittal announced its new contract with the United
Steelworkers (USW) was ratified by USW-represented employees. The three-year
collective bargaining agreement covers more than 12,000 USW-represented
employees at 13 of our United States facilities in Indiana, Illinois,
Minnesota, Ohio, Pennsylvania and West Virginia.
* During 2Q 2016, Volkswagen (VW) selected ArcelorMittal for a new supplier
programme that will see greater collaboration between the two companies
around vehicle development. The new initiative -Future Automotive Supply
Tracks (FAST) - is the carmaker's answer to key challenges facing the
automotive industry in the form of globalization and the increasing speed of
innovation cycles. It recognizes that the supplier network will play a much
more significant role in vehicle development at VW.
* On May 23, 2016, ArcelorMittal USA entered into a new, five-year senior
secured asset-based revolving credit facility of up to $1 billion. This
facility is secured by inventory and certain other working capital and
related assets of ArcelorMittal USA and certain of its subsidiaries in the
United States. The facility will be used for general corporate purposes of
ArcelorMittal USA and its subsidiaries. The facility is not being guaranteed
by ArcelorMittal. In line with its financial policy, ArcelorMittal does not
intend to pursue additional secured financing beyond this single asset-based
facility.
Summary of the recent financing transactions:
* In April 2016, pursuant to cash tender offers, ArcelorMittal purchased:
* $437 million of its U.S. dollar denominated 6.125% Notes due 2018 (the
"$ 2018 Notes") for a total aggregate purchase price (including accrued
interest) of $467 million. Following this purchase, $1,063 million
principal amount of $ 2018 Notes remained outstanding.
* ?460 million of its EUR denominated 4.625% Notes due 2017 (the "? 2017
Notes") for a total aggregate purchase price (including accrued
interest) of ?511 million. Following this purchase, ?540 million
principal amount of ? 2017 Notes remained outstanding.
* ?166 million of its EUR denominated 4.50% Notes due 2018 (the "? 2018
Notes") for a total aggregate purchase price (including accrued
interest) of ?181 million. Following this purchase, ?334 million
principal amount of the ? 2018 Notes remained outstanding.
* In May 2016, pursuant to cash tender offers, ArcelorMittal purchased $408
million of its U.S. dollar denominated 9.85% Notes due 2019 (the "$ 2019
Notes") for a total aggregate purchase price (including accrued interest) of
$498 million. Following this purchase, $1,092 million principal amount of $
2019 Notes remained outstandin
Unternehmensinformation / Kurzprofil:
Datum: 29.07.2016 - 07:00 Uhr
Sprache: Deutsch
News-ID 486225
Anzahl Zeichen: 65600
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 290 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"ArcelorMittal reports second quarter 2016 and half year 2016 results"
steht unter der journalistisch-redaktionellen Verantwortung von
ArcelorMittal S.A. (Nachricht senden)
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