ArcelorMittal reports fourth quarter 2016 and full year 2016 results
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports fourth quarter 2016 and full year 2016 results
. Processed and transmitted by Nasdaq Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, February 10, 2017 - 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 twelve month periods ended December 31, 2016.
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|Highlights: |
| * Health and safety performance was stable in FY 2016 as compared to FY |
| 2015 with annual LTIF rate of 0.82x |
| * FY 2016 operating income of $4.2 billion; operating income of $0.8 billion|
| in 4Q 2016 as compared to operating loss of $5.3 billion in 4Q 2015 |
| * FY 2016 EBITDA of $6.3 billion versus $5.2 billion in FY 2015; EBITDA of |
| $1.7 billion in 4Q 2016; up 51% versus 4Q 2015 |
| * FY 2016 net income of $1.8 billion as compared to FY 2015 net loss of $7.9|
| billion |
| * FY 2016 steel shipments of 83.9Mt (-0.8% YoY); 4Q 2016 steel shipments of |
| 20.0Mt up +1.6% versus 4Q 2015 |
| * FY 2016 iron ore shipments of 55.9Mt (-10.4% YoY), of which 33.6Mt shipped|
| at market prices (-16.6% YoY); 4Q 2016 iron ore shipments of 13.5Mt (- |
| 13.4% YoY), of which 8.1Mt shipped at market prices (-17.5% YoY) |
| * Net debt decreased to $11.1 billion as of December 31, 2016; $4.6 billion |
| lower as compared to December 31, 2015 |
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|Strategic progress in 2016: |
| |
|The Company has continued to make progress on its strategic objectives during|
|2016, including: |
| * Action 2020 delivering with $0.9 billion contribution to 2016 operating |
| results |
| * FY 2016 cash requirements of the business[2] limited to $4.5 billion, in |
| line with targets |
| * Cash flow from operations exceeded capex, in line with targets |
| * Net debt/EBITDA reduced to 1.8x in FY 2016 versus 3.0x in FY 2015 |
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Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
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Sales 14,126 14,523 13,981 56,791 63,578
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Operating income / (loss) 809 1,204 (5,331) 4,161 (4,161)
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Net income/(loss) attributable to equity 403 680 (6,686) 1,779 (7,946)
holders of the parent
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Basic earnings/(loss) per share (US$)[3] 0.13 0.22 (2.89) 0.62 (3.43)
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Operating income/(loss)/ tonne (US$/t) 40 59 (270) 50 (49)
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EBITDA 1,661 1,897 1,103 6,255 5,231
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EBITDA/ tonne (US$/t) 83 93 56 75 62
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Steel-only EBITDA/ tonne (US$/t) 68 83 51 65 56
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Crude steel production (Mt) 21.8 22.6 21.6 90.8 92.5
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Steel shipments (Mt) 20.0 20.3 19.7 83.9 84.6
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Own iron ore production (Mt) 13.9 13.7 15.5 55.2 62.8
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Iron ore shipped at market price (Mt) 8.1 8.1 9.9 33.6 40.3
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Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"2016 was a year of progress for ArcelorMittal, characterised by improving
market conditions, a strong contribution from our Action 2020 programme and
steps from governments to address unfair trade. As a result, EBITDA was
comfortably in excess of initial expectations and, furthermore, we have
delivered on our commitment to prioritise debt reduction, significantly
strengthening our balance sheet and ending the year with the lowest level of net
debt since the creation of the Company.
We enter 2017 with good momentum in the business and the market. Our increased
confidence is reflected in the Board's decision to increase capital expenditure
for 2017. The improvement in performance is, however, from a low base so we will
need to continue to prioritise improved returns. Central to this will be our
Action 2020 programme which will sustainably improve the underlying performance
of the business. We remain fully focussed on continuing the good progress in the
three areas of cost optimisation, product mix and volume growth. In addition,
given global overcapacity, ensuring fair trade remains crucial and we will
continue to call for a comprehensive solution to unfair trade practises."
Fourth quarter 2016 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the
investment community to discuss the three-month and twelve-month periods ended
December 31, 2016 on:
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Date US Eastern time London CET
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Friday February 9.30am 2.30pm 3.30pm
10, 2017
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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 0515 931 +44 (0)203 364 5807 78857953#
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US local: 1 86 6719 2729 +1 24 0645 0345 78857953#
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US (New York) 1 86 6719 2729 + 1 64 6663 7901 78857953#
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France: 0800 914780 +33 1 7071 2916 78857953#
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Germany: 0800 965 6288 +49 692 7134 0801 78857953#
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Spain: 90 099 4930 +34 911 143436 78857953#
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Luxembourg: 800 26908 +352 27 86 05 07 78857953#
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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 500599#
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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 2016, ArcelorMittal had revenues of $56.8 billion and crude steel production
of 90.8 million tonnes, while own iron ore production reached 55.2 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: +44 207 543 1128
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Americas Tel: +1 312 899 3985
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Retail Tel: +44 207 543 1156
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SRI Tel: +44 207 543 1156
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Bonds/Credit Tel: +33 1 71 92 10 26
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ArcelorMittal Corporate E-mail: press(at)arcelormittal.com
Communications Tel: +44 0207 629 7988
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Paul Weigh Tel: +44 203 214 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, remained stable at 0.82x for the twelve
months of 2016 ("12M 2016") as compared to 0.81x for the twelve months of 2015
("12M 2015").
Health and safety performance remained stable at 0.84x in the fourth quarter of
2016 ("4Q 2016") as compared to the third quarter of 2016 ("3Q 2016"), and
marginally higher than 0.83x for the fourth quarter of 2015 ("4Q 2015").
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 4Q 16 3Q 16 4Q 15 12M 16 12M 15
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Mining 1.39 1.08 0.72 1.07 0.74
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NAFTA 0.87 0.89 0.95 0.95 1.02
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Brazil 0.42 0.20 0.73 0.37 0.62
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Europe 0.92 1.17 1.01 1.01 0.99
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ACIS 0.61 0.55 0.58 0.58 0.54
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Total Steel 0.75 0.80 0.84 0.78 0.82
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Total (Steel and Mining) 0.84 0.84 0.83 0.82 0.81
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Key corporate responsibility highlights for 4Q 2016:
* Announced Low Carbon Technology partnership with Evonik, LafargeHolcim and
Solvay across the steel, cement and chemicals industries to explore cross-
sector carbon capture and reuse opportunities on an industrial scale, which
could reduce up to 3 gigatonnes per year or 7% of global CO2 emissions.
* Completed modernization of Zdzieszowice coke plant as part of major
investment programme to ensure compliance with European Industrial Emissions
Directive.
* Launched a major revamp of Burns Harbour power plant (second phase) with
significant energy and carbon savings expected on completion in 2019.
* Ranked 1st in Climate Disclosure Project report "Nerves of Steel"' for low
carbon technology development and 5th overall.
Analysis of results for the twelve months ended December 31, 2016 versus results
for the twelve months ended December 31, 2015
Total steel shipments for 12M 2016 decreased marginally by 0.8% to 83.9 million
metric tonnes as compared with 84.6 million metric tonnes for 12M 2015,
primarily due to lower shipments in Brazil (-6.8%) and Europe (-1.1%) offset in
part by higher shipments in ACIS (+6.3%). On a comparable basis (considering the
sale of long steel producing subsidiaries in the US (LaPlace and Vinton) in
2Q 2016 and Zaragoza in Spain during 3Q 2016), total steel shipments for
12M 2016 of 83.4 million metric tonnes were stable as compared with 83.6 million
metric tonnes for 12M 2015.
Sales for 12M 2016 decreased by 10.7% to $56.8 billion as compared with $63.6
billion for 12M 2015, primarily due to lower average steel selling prices (-
9.0%), lower steel shipments (-0.8%) and lower marketable iron ore shipments (-
16.6%) offset in part by higher seaborne iron ore reference prices (+4.8%).
Depreciation of $2.7 billion for 12M 2016 was lower as compared to $3.2 billion
for 12M 2015, primarily on account of the foreign exchange impact following the
appreciation of the US dollar against major currencies and the reduced asset
base following the impairments recorded at the end of 2015. FY 2017 depreciation
is expected to be approximately $2.8 billion (at current exchange rates).
Impairment charges for 12M 2016 were $205 million of which $49 million related
to the sale of ArcelorMittal Zaragoza in Spain and $156 million related to the
Vanderbijlpark and Saldanha plants in South Africa, as compared to impairment
charges of $4.8 billion for 12M 2015[4].
Exceptional income for 12M 2016 was $832 million relating to a one-time gain on
employee benefits following the signing of the new US labour contract(15).
Exceptional charges for 12M 2015 of $1.4 billion included $1.3 billion primarily
related to the write-down of inventory following the rapid decline of
international steel prices and litigation and other costs in South Africa ($0.1
billion).
Operating income for 12M 2016 was $4.2 billion as compared to operating loss of
$4.2 billion in 12M 2015. Operating results for 12M 2016 were positively
impacted by exceptional income as discussed above. Operating results for
12M 2015 were negatively impacted by the $4.8 billion impairment charges and
$1.4 billion exceptional charges discussed above.
Income from investments in associates, joint ventures and other investments in
12M 2016 was higher at $615 million as compared to loss in 12M 2015 of $502
million. The income in 12M 2016 was primarily due to the gain on disposal of
stakes in Gestamp[5] ($329 million) and Hunan Valin[6] ($74 million) as well as
improved performance of the Calvert joint venture, Chinese and Spanish investees
offset in part by impairments of the primary steel making assets at China
Oriental. 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[7].
Net interest expense (including interest expense and interest income) was lower
at $1.1 billion in 12M 2016, as compared to $1.3 billion in 12M 2015, driven by
savings from: early bond repayments via debt tenders undertaken in 2Q 2016 and
3Q 2016 (totalling $3.5 billion); early redemption of 4.5% Notes due February
25, 2017 ($1.4 billion) and repayment at maturity on June 3, 2016, of a ?1
billion 9.375% bond. The Company expects full year 2017 net interest expense of
approximately $0.9 billion.
Foreign exchange and other net financing costs were $942 million for 12M 2016 as
compared to foreign exchange and other net financing costs of $1.6 billion for
12M 2015. Foreign exchange gains/losses primarily relate to the impact of the
USD movements on Euro denominated deferred tax assets and Euro denominated debt.
For the 12M 2016 foreign exchange loss of $4 million was recorded (as compared
to a loss of $697 million for 12M 2015), mainly on account of USD appreciation
of 3.2% against the Euro (versus 10% appreciation in 12M 2015), 19.8%
depreciation against BRL (versus 32% appreciation in 12M 2015) and 1.8%
depreciation against the Kazakhstan tenge (versus 46% appreciation against the
tenge in 12M 2015). Foreign exchange and other net financing costs for 12M 2016
also includes $0.4 billion premium incurred on the early redemption of bonds and
$0.1 billion non-cash expense in connection with the issuance of shares in the
context of the B-BBEE transaction in South Africa[8].
ArcelorMittal recorded an income tax expense of $986 million for 12M 2016 as
compared to an income tax expense of $902 million for 12M 2015. The deferred tax
expense in 12M 2016 of $732 million includes $0.7 billion impact from the
derecognition of deferred tax assets (DTA) in Luxembourg during the 1Q 2016
(related to revised expectations of the DTA recoverability in US dollar terms
and not related to a deterioration of expected future taxable income).
Non-controlling interests for 12M 2016 were a loss of $45 million as compared to
a net loss attributable to non-controlling interests of $477 million for
12M 2015. The net loss attributable to non-controlling interests for 12M 2016
primarily related to losses attributable to the minority interests in
ArcelorMittal South Africa, partially offset by minority shareholders' share of
net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in
Brazil. Non-controlling interests for 12M 2015 represented losses attributable
to the minority interests in ArcelorMittal South Africa and Liberia resulting
from the impairment of assets as described above.
ArcelorMittal's net income for 12M 2016 was $1,779 million, or $0.62 earnings
per share, as compared to a net loss for 12M 2015 of $7.9 billion, or $3.43(3)
loss per share.
Analysis of results for 4Q 2016 versus 3Q 2016 and 4Q 2015
Total steel shipments for 4Q 2016 were 1.3% lower at 20.0 million metric tonnes
as compared with 20.3 million metric tonnes for 3Q 2016 primarily due to lower
shipments in ACIS (-9.2%) and NAFTA (-6.6%) offset in part by improvements in
Brazil (+3.3%) and Europe (+1.6%). Steel shipments for 4Q 2016 of 20.0 million
metric tonnes were 1.6% higher as compared to 19.7 million metric tonnes for
4Q 2015. On a comparable basis (considering the sale of long steel producing
subsidiaries in the US (LaPlace and Vinton) in 2Q 2016 and Zaragoza in Spain
during 3Q 2016), total steel shipments for 4Q 2016 were 2.8% higher as compared
with 19.5 million metric tonnes for 4Q 2015.
Sales for 4Q 2016 were $14.1 billion as compared to $14.5 billion for 3Q 2016
and $14.0 billion for 4Q 2015. Sales in 4Q 2016 were 2.7% lower as compared to
3Q 2016, primarily due to lower steel shipments (-1.3%) and lower average steel
selling prices (-2.0%), offset in part by higher iron ore reference prices
(+20.8%). Sales in 4Q 2016 were 1.0% higher as compared to 4Q 2015 primarily due
to higher steel shipment volumes (+1.6%), higher average steel selling prices
(+3.5%), and higher iron ore reference prices (+51.7%) offset in part by lower
market-priced iron ore shipments (-17.5%).
Depreciation for 4Q 2016 was $696 million as compared to $693 million for
3Q 2016 and $807 million for 4Q 2015. Depreciation was lower in 4Q 2016 as
compared to 4Q 2015 primarily due to a decreased asset base following
impairments recorded at the end of 2015 and foreign exchange impacts.
Impairment charges for 4Q 2016 were $156 million related to the Vanderbijlpark
and Saldanha plants in South Africa. Impairment charges for 3Q 2016 were nil.
Impairment charges for 4Q 2015 were $4.7 billion including $0.9 billion with
respect to Mining segment goodwill and $3.8 billion primarily related to fixed
assets.
Exceptional items for 4Q 2016 and 3Q 2016 were nil. Exceptional charges for
4Q 2015 were $0.9 billion which primarily included $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).
Operating income for 4Q 2016 was $0.8 billion as compared to $1.2 billion in
3Q 2016 and an operating loss of $5.3 billion in 4Q 2015. Operating results for
4Q 2015 were impacted by exceptional charges as discussed above. Operating
income for 4Q 2016 was lower as compared to 3Q 2016 primarily due to lower
operating performance in steel segments offset in part by improved performance
in the Mining segment driven primarily by higher iron ore prices.
Income from investments in associates, joint ventures and other investments for
4Q 2016 was lower at $14 million as compared to $109 million for 3Q 2016 (which
had included the $74 million gain on disposal of ArcelorMittal's stake in Hunan
Valin), primarily due to impairment of the primary steel making assets at China
Oriental ($50 million) offset by improved performance of the Calvert joint
venture, Chinese and Spanish investees. Loss from investments in associates,
joint ventures and other investments for 4Q 2015 was $655 million 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.
Net interest expense in 4Q 2016 was $221 million as compared to $255 million in
3Q 2016 and $312 million in 4Q 2015. Net interest expense was lower in 4Q 2016
as compared to 3Q 2016 primarily due to savings from early bond repayments in
3Q 2016. Net interest expense was lower in 4Q 2016 as compared to 4Q 2015 due to
debt reduction including early bond repayment via debt tenders.
Foreign exchange and other net financing costs in 4Q 2016 was $278 million as
compared to $223 million for 3Q 2016 and $342 million for 4Q 2015. Foreign
exchange gains/losses primarily relate to the impact of the USD movements on
Euro denominated deferred tax assets and Euro denominated debt. For 4Q 2016 a
foreign exchange loss of $128 million was recorded (as compared to a gain of $65
million for 3Q 2016) mainly as a result of a 5.6% appreciation of the USD
against the Euro (versus 0.5% depreciation in 3Q 2016) and a 0.4% appreciation
against BRL (versus 1.1% appreciation in 3Q 2016). Foreign exchange and other
net financing costs in 4Q 2016 includes $0.1 billion non-cash expense in
connection with the issuance of shares in the context of the B-BBEE transaction
in South Africa. Foreign exchange and other net financing costs for 3Q 2016 also
include $158 million premiums incurred on the bond repayments via debt tenders.
Foreign exchange and other net financing costs for 4Q 2015 include a foreign
exchange loss of $104 million mainly on account of a 2.8% USD appreciation
against the Euro, a 20.3% USD appreciation against the tenge currency in
Kazakhstan and a 27.7% USD appreciation against the Argentine pesos (after
currency controls were lifted) relative to the prior period.
ArcelorMittal recorded an income tax benefit of $13 million for 4Q 2016 as
compared to an income tax expense of $146 million for 3Q 2016 and $441 million
for 4Q 2015.
Net loss attributable to non-controlling interests for 4Q 2016 of $66 million
represent income primarily related to losses generated by ArcelorMittal South
Africa offset in part by minority shareholders' share of net income recorded in
ArcelorMittal Mines Canada and Belgo Bekaert Arames in Brazil. Net income
attributable to non-controlling interests for 3Q 2016 of $9 million related to
minority shareholders' share of net income recorded in ArcelorMittal Mines
Canada and Belgo Bekaert Arames in Brazil partially offset by losses generated
by ArcelorMittal South Africa. Net loss attributable to non-controlling
interests for 4Q 2015 of $395 million primarily related to South Africa and
Liberia resulting from the impairment of the assets.
ArcelorMittal recorded net income for 4Q 2016 of $403 million, or $0.13 earnings
per share as compared to net income for 3Q 2016 of $680 million, or $0.22
earnings per share, and as compared to net loss of $6.7 billion, or $2.89 loss
per share for 4Q 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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NAFTA 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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NAFTA Indiana Harbor Indiana Harbor New caster at No.3 4Q 2016((a))
"footprint Steelshop
optimization installed
project"
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Ongoing projects
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Region Site Project Capacity / Forecast
particulars completion
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NAFTA Indiana Harbor Indiana Harbor Restoration of 2018((a))
"footprint 80" HSM and
optimization upgrades at
project" Indiana Harbor
finishing and
logistics
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NAFTA 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 2Q 2017
Dofasco (Canada) the current galvaline #4 to
galvanizing line produce 160kt
#4 to a Galvalume galvalume and
line 128kt galvanize
and closure of
galvanize line
#1 (capacity
170kt of
galvalume)
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Europe ArcelorMittal HRM extension Increase HRC 1Q 2017((b))
Krakow (Poland) capacity by
0.9Mt/year
HDG increase Increasing HDG 1Q 2017((b))
capacity by
0.4Mt/year
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Europe Gent & Liège Gent: Upgrade HSM Increase ~400kt 2017
(Europe Flat and new furnace in Ultra High
Automotive UHSS Liège: Annealing Strength Steel
Program) line capabilities
transformation
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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((c))
(Brazil) meltshop
capacity by
0.2Mt/year
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Brazil Monlevade (Brazil) Sinter plant, Increase in On hold
blast 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 Under
project production review((d))
capacity to
15Mt/year
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a) In support of the Company's Action 2020 program that was launched at its
fourth quarter and full-year 2015 earnings announcement, the footprint
optimization project at ArcelorMittal Indiana Harbor is now underway, which has
resulted in structural changes required to improve asset and cost optimization.
The plan involves idling redundant operations including the #1 aluminize line,
84" hot strip mill (HSM), and #5 continuous galvanizing line (CGL) and No.2
steel shop (expected to be idled in 2017) whilst making further planned
investments totalling ~US$200 million including a new caster at No.3 steelshop
(completed in 4Q 2016), restoration of the 80" hot strip mill and Indiana Harbor
finishing and logistics. The project is expected to be completed in 2018.
b) On July 7, 2015, ArcelorMittal Poland announced it was restarting
preparations for the relining of blast furnace No. 5 in Krakow, which has now
been completed during 3Q 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.
c) 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.
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. Following a period of exploration
cessation caused by the onset of Ebola, ArcelorMittal Liberia recommenced
drilling for DSO resource extensions in late 2015. During 2016 the operation at
Tokadeh was right sized to 3Mtpa to focus on its 'natural' Atlantic markets. 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, the
Company is finalising a final feasibility study on 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.
Analysis of segment operations
NAFTA
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
Sales 3,795 4,269 3,600 15,806 17,293
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Operating income / (loss) 164 424 (741) 2,002 (705)
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Depreciation 137 142 154 549 616
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Impairment - - 507 - 526
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Exceptional (income)/charges - - 353 (832) 454
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EBITDA 301 566 273 1,719 891
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Crude steel production (kt) 5,197 5,632 5,136 22,208 22,795
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Steel shipments (kt) 5,011 5,364 4,581 21,281 21,306
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Average steel selling price (US$/t) 681 715 706 672 732
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NAFTA segment crude steel production decreased 7.7% to 5.2 million tonnes in
4Q 2016 as compared to 5.6 million tonnes for 3Q 2016.
Steel shipments in 4Q 2016 decreased by 6.6% to 5.0 million tonnes as compared
to 3Q 2016, primarily driven by a 8.5% decrease in flat products volumes mainly
reflecting a destock in the US.
Sales in 4Q 2016 decreased 11.1% to $3.8 billion as compared to $4.3 billion in
3Q 2016, primarily due to lower average steel selling prices (-4.7%) and lower
steel shipment volumes as discussed above. Average steel selling price for flat
products and long products declined -3.6% and -3.7%, respectively.
Operating income in 4Q 2016 decreased to $164 million as compared to operating
income of $424 million in 3Q 2016 (see explanation below) and higher as compared
to operating loss of $741 million in 4Q 2015. 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 was impacted by exceptional inventory related charges of
$353 million following the rapid decline of steel prices.
EBITDA in 4Q 2016 decreased 46.9% to $301 million as compared to $566 million in
3Q 2016 primarily due to lower steel shipment volumes (-6.6%) (primarily driven
by a 8.5% decrease in flat products volumes), and 4.7% decline in average steel
selling prices (flat products and long products declined -3.6% and -3.7%,
respectively). EBITDA in 4Q 2016 improved 10.3% as compared to $273 million in
4Q 2015 due to higher steel shipments volumes +9.4% (primarily due to higher
shipments in Mexico).
Brazil
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
Sales 1,751 1,729 2,092 6,223 8,503
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Operating income / (loss) 143 233 (134) 614 628
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Depreciation 70 68 87 258 336
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Impairments - - 176 - 176
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Exceptional charges - - 52 - 91
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EBITDA 213 301 181 872 1,231
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Crude steel production (kt) 2,778 2,888 2,850 11,133 11,612
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Steel shipments (kt) 2,841 2,751 2,873 10,753 11,540
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Average steel selling price (US$/t) 565 582 565 536 647
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Brazil segment crude steel production decreased 3.8% to 2.8 million tonnes in
4Q 2016 as compared to 2.9 million tonnes in 3Q 2016.
Steel shipments in 4Q 2016 increased by +3.3% to 2.8 million tonnes as compared
to 3Q 2016, primarily due to a +8.5% increase in flat steel shipments (primarily
exports) offset in part by a 6.0% decrease in long product shipments.
Sales in 4Q 2016 increased by 1.2% to $1.8 billion as compared to $1.7 billion
in 3Q 2016, due to higher steel shipments as discussed above, offset in part by
2.9% decrease in average steel selling prices primarily in slab exports (both
flat and long steel prices declining -4.6% and -1.7%, respectively).
Operating income in 4Q 2016 decreased to $143 million as compared to an
operating income of $233 million in 3Q 2016 and increased as compared to an
operating loss of $134 million in 4Q 2015. Operating performance in 4Q 2015 was
impacted by impairment of $176 million related to the closure of Point Lisas
(Trinidad and Tobago), and exceptional charges of $52 million relating to
inventory write down in Point Lisas.
EBITDA in 4Q 2016 decreased by 29.1% to $213 million as compared to $301 million
in 3Q 2016 primarily on account of lower average steel selling prices (due in
part to weak product mix) as well as higher costs including repair and
maintenance expenditures. EBITDA in 4Q 2016 was 17.6% higher as compared to $181
million in 4Q 2015 due to improved flat operations profitability offset in part
by lower long products profitability including tubular operations in Venezuela
impacted by currency devaluation[9].
Europe
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
Sales 7,139 7,172 7,075 29,272 31,893
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Operating income/ (loss) 387 414 (506) 1,270 171
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Depreciation 311 303 307 1,184 1,192
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Impairment - - 398 49 398
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Exceptional charges - - 345 - 632
----------------------------------------------------------------------
----------------------------------------------------------------------
EBITDA 698 717 544 2,503 2,393
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Crude steel production (kt) 10,173 10,571 9,988 42,635 43,853
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Steel shipments (kt) 9,535 9,382 9,473 40,247 40,676
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Average steel selling price (US$/t) 590 596 568 568 609
----------------------------------------------------------------------
Europe segment crude steel production decreased by 3.8% to 10.2 million tonnes
in 4Q 2016, as compared to 10.6 million tonnes in 3Q 2016 primarily due to the
planned reline at ArcelorMittal Asturias (Spain).
Steel shipments in 4Q 2016 increased by 1.6% to 9.6 million tonnes as compared
to 9.4 million tonnes in 3Q 2016, primarily due to a 7.3% increase in long
product shipments following a recovery from the weak third quarter 2016 levels.
Sales in 4Q 2016 decreased 0.5% to $7.1 billion as compared to $7.2 billion in
3Q 2016, primarily due to lower average steel selling prices (-0.9%), (driven by
a -6.1% decrease in long product prices offset in part by a +1.0% increase in
flat product prices), offset in part by higher steel shipments as discussed
above.
Operating income in 4Q 2016 was $387 million as compared to $414 million in
3Q 2016 and an operating loss of $506 million in 4Q 2015. 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 as well as by exceptional charges of $345 million relating to the write-
down of inventories following the rapid decline of steel prices.
EBITDA in 4Q 2016 decreased by 2.6% to $698 million as compared to $717 million
in 3Q 2016 primarily due to higher input costs and translation foreign exchange
impacts partially offset by higher steel shipment volumes and higher average
steel prices in euros (+2.4%). EBITDA in 4Q 2016 improved by 28.2% as compared
to 4Q 2015 primarily on account of higher average steel selling prices (+3.9%),
higher steel shipment volumes (+0.7%) as well as cost efficiency improvements
offset in part by higher input costs.
ACIS
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
Sales 1,526 1,586 1,250 5,885 6,128
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Operating income/ (loss) (92) 156 (455) 211 (624)
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Depreciation 78 77 90 311 408
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Impairment 156 - 267 156 294
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Exceptional charges - - 159 - 239
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EBITDA 142 233 61 678 317
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Crude steel production (kt) 3,646 3,552 3,663 14,792 14,219
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Steel shipments (kt) 3,095 3,408 3,078 13,271 12,485
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Average steel selling price (US$/t) 432 419 356 395 432
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ACIS segment crude steel production in 4Q 2016 increased by 2.6% to 3.6 million
tonnes as compared to 3Q 2016 primarily due to the production recovery at Kryvyi
Rih in Ukraine which had been impacted by production outages during the prior
period.
Steel shipments in 4Q 2016 decreased by 9.2% to 3.1 million tonnes as compared
to 3.4 million tonnes in 3Q 2016 primarily due to seasonally lower shipments in
both CIS operations and South Africa.
Sales in 4Q 2016 decreased 3.8% to $1.5 billion as compared to $1.6 billion in
3Q 2016, primarily due to lower steel shipments (-9.2%) offset in part by higher
average steel selling prices (+3.0%).
Operating loss in 4Q 2016 was $92 million, operating income in 3Q 2016 was $156
million and operating loss in 4Q 2015 was $455 million. Operating loss in
4Q 2016 was impacted by impairments of $156 million related to the
Vanderbijlpark and Saldanha plants in South Africa. Operating performance in
4Q 2015 was impacted by impairments of $267 million primarily with respect to
the Saldanha plant in South Africa due to its revised competitive outlook, and
exceptional charges of $159 million primarily relating to a deferred stripping
prepayment[10], a provision in relation to competition cases in South Africa[11]
and the write-down of inventories following the rapid decline of steel prices.
EBITDA in 4Q 2016 of $142 million was lower as compared to $233 million in
3Q 2016. EBITDA in 4Q 2016 was impacted by a one-time charge of $28 million in
relation to environmental liabilities at the Thabazimbi mine in South Africa. In
addition, EBITDA in 4Q 2016 was lower than 3Q 2016 on account of lower steel
shipment volumes and higher input costs partially offset by higher average steel
selling prices. EBITDA in 4Q 2016 was higher as compared to $61 million in
4Q 2015, primarily due to higher average selling prices (+21.2%) offset in part
by higher input costs.
Mining
(USDm) unless otherwise shown 4Q 16 3Q 16 4Q 15 12M 16 12M 15
Sales 896 809 757 3,114 3,387
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Operating income/ (loss) 203 103 (3,442) 366 (3,522)
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Depreciation 94 101 162 396 614
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Impairments - - 3,370 - 3,370
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EBITDA 297 204 90 762 462
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Own iron ore production ((a) )(Mt) 13.9 13.7 15.5 55.2 62.8
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Iron ore shipped externally and internally 8.1 8.1 9.9 33.6 40.3
at market price ((b) )(Mt)
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Iron ore shipment - cost plus basis (Mt) 5.4 5.8 5.8 22.3 22.1
-------------------------------------------------------------------------------
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Own coal production((a) )(Mt) 1.8 1.6 1.4 6.3 6.1
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Coal shipped externally and internally at 0.9 1.0 0.8 3.4 2.8
market price((b) )(Mt)
-------------------------------------------------------------------------------
Coal shipment - cost plus basis (Mt) 0.9 0.9 0.8 3.4 3.2
-------------------------------------------------------------------------------
(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 4Q 2016 increased by 1.9% to 13.9 million metric
tonnes as compared to 13.7 million metric tonnes in 3Q 2016 due to higher
production at Ukraine and Canada, offset in part by lower production in
Kazakhstan and Bosnia.
Own iron ore production in 4Q 2016 was lower by 10.4% as compared to 4Q 2015
primarily due to lower production in Canada, Ukraine, and Liberia. With ongoing
focus on our most competitive iron ore operations: Liberia production is
currently being maintained at approximately 2 million metric tonnes per annum
and the Volcan mine in Mexico was suspended in October 2015 (2 million metric
tonnes annual impact). Iron ore production in Ukraine during 2016 decreased to
reflect a revised mine plan following a delay in accessing new tailings disposal
land (which negatively impacted production by approximately 1Mt). Own iron ore
production for the mining segment is expected to increase in 2017 with the
transition to the Gangra deposit in Liberia (project under review and subject to
board approval) additional production to potentially reach 3Mtpa, representing
an increase of 1Mt versus 2016, until proposed full ramp up to 5Mtpa in 2018);
restart of the Volcan mine in Mexico due to revised mine plan in light of
improved price conditions (additional 2Mt) and production recovery in Ukraine
following resolution of issues described above.
Market-priced iron ore shipments in 4Q 2016 were stable at 8.1 million metric
tonnes as compared to 3Q 2016, primarily driven by lower shipments in
ArcelorMittal Mines Canada offset by increased shipments in Ukraine. Shipments
at ArcelorMittal Mines Canada were impacted by logistics and transportation
issues following severe weather conditions during 4Q 2016. As a result,
ArcelorMittal Mines Canada market-priced iron ore shipments declined to 6.2
million tonnes during 4Q 2016 as compared to 6.6 million tonnes in 3Q 2016 and
recorded FY 2016 market-price iron ore shipments of 25.4 million metric tonnes
(compared to 26.0 million metric tonnes in FY 2015), primarily due to
operational and weather related issues. Market-priced iron ore shipments in
4Q 2016 decreased by 17.5% as compared to 4Q 2015 driven by decreased shipments
primarily in Ukraine, Canada, Brazil and Liberia.
Market-priced iron ore shipments for FY 2016 were 16.6% lower as compared to FY
2015. FY 2017 market-priced iron ore shipments are expected to increase by
approximately 10% versus FY 2016 for the reasons described above.
Own coal production in 4Q 2016 increased 9.1% to 1.8 million metric tonnes as
compared to 1.6 million metric tonnes in 3Q 2016. Own coal production in
4Q 2016 increased 23.1% as compared to 4Q 2015.
Market-priced coal shipments in 4Q 2016 were 7.5% lower at 0.9 million metric
tonnes as compared to 1.0 million metric tonnes in 3Q 2016 primarily due to
decreased shipments at Princeton (US) offset in part by higher shipments in
Kazakhstan. Market-priced coal shipments in 4Q 2016 increased 18.1% as compared
to 4Q 2015 primarily due to increased shipments at Princeton (US).
Operating income in 4Q 2016 increased to $203 million as compared to an
operating income of $103 million in 3Q 2016, and an operating loss of $3.4
billion in 4Q 2015, primarily for the reasons discussed below. Operating
performance in 4Q 2015 was impacted by impairments of $3.4 billion including
$0.9 billion with respect to goodwill and $2.5 billion primarily related to
fixed assets, in respect of iron ore mining operations at ArcelorMittal Liberia
($1.4 billion), Las Truchas in Mexico ($0.2 billion), ArcelorMittal Serra Azul
in Brazil ($0.2 billion) and coal mining operations at ArcelorMittal Princeton
in the United States ($0.7 billion) mainly due to a downward revision of cash
flow projections relating to the expected persistence of a lower raw material
price outlook.
EBITDA in 4Q 2016 increased 45.9% to $297 million as compared to $204 million in
3Q 2016, primarily due to higher seaborne iron ore market reference prices
(+20.8%). EBITDA in 4Q 2016 was significantly higher as compared to $90 million
in 4Q 2015, primarily due to higher seaborne iron ore market reference prices
(+51.7%), offset in part by lower market-priced iron ore shipment volumes (-
17.5%).
Liquidity and Capital Resources
For 4Q 2016, net cash provided by operating activities was $1,653 million as
compared to $876 million in 3Q 2016, including a $495 million release of working
capital in 4Q 2016 as compared to a $565 million investment in working capital
in 3Q 2016[12].
Net cash used in investing activities during 4Q 2016 was $809 million as
compared to net cash used in investing activities of $300 million in 3Q 2016 and
net cash used in investing activities of $646 million in 4Q 2015. Capital
expenditure increased to $802 million in 4Q 2016 as compared to $535 million in
3Q 2016 and $736 million in 4Q 2015. FY 2016 capital expenditure was $2.4
billion which was lower than $2.7 billion for FY 2015.
Cash flows from other investing activities in 3Q 2016 of $235 million primarily
consisted of proceeds from the sale of ArcelorMittal's stake in Hunan Valin
($165 million)(6) and from the sale of ArcelorMittal Zaragoza ($89 million)[13].
Cash flow from other investing activities in 4Q 2015 of $90 million primarily
consisted of proceeds from the partial disposal of the Company's stake in
Stalprodukt and disposal of tangible assets.
Net cash used in financing activities for 4Q 2016 was $468 million as compared
to $741 million for 3Q 2016 and $367 million for 4Q 2015. Net cash used in
financing activities for 4Q 2016 primarily inc
Unternehmensinformation / Kurzprofil:
Datum: 10.02.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 523313
Anzahl Zeichen: 65594
contact information:
Town:
London
Kategorie:
Business News
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Die Pressemitteilung mit dem Titel:
"ArcelorMittal reports fourth quarter 2016 and full year 2016 results"
steht unter der journalistisch-redaktionellen Verantwortung von
ArcelorMittal S.A. (Nachricht senden)
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