ArcelorMittal reports results for the first quarter 2017
(Thomson Reuters ONE) -
ArcelorMittal S.A. /
ArcelorMittal reports results for the first quarter 2017
. Processed and transmitted by Nasdaq Corporate Solutions.
The issuer is solely responsible for the content of this announcement.
Luxembourg, May 12, 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 month period ended March 31, 2017.
Highlights:
* Health and safety: LTIF rate of 0.80x in 1Q 2017 as compared to 0.84x in
4Q 2016 and 0.72x in 1Q 2016
* Operating income increased to $1.6 billion in 1Q 2017 as compared to $0.8
billion in 4Q 2016
* EBITDA of $2.2 billion in 1Q 2017, 34.3% higher as compared to $1.7 billion
in 4Q 2016 primarily reflecting higher steel shipments (+5.1%) and higher
seaborne iron ore prices (+21%)
* Net income of $1.0 billion in 1Q 2017 as compared to $0.4 billion in 4Q 2016
* Steel shipments of 21.1 Mt in 1Q 2017, up 5.1% vs. 4Q 2016 and down 1.9% vs.
1Q 2016 (down 0.9% on comparable basis[2])
* 1Q 2017 iron ore shipments of 13.4 Mt (+1.7% YoY), of which 8.7 Mt shipped
at market prices (+11.2% YoY)
* Due to seasonal working capital investment ($2.2 billion), net debt
increased to $12.1 billion as of March 31, 2017, as compared to $11.1
billion as of December 31, 2016
Financial highlights (on the basis of IFRS(1)):
(USDm) unless otherwise shown 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
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Sales 16,086 14,126 14,523 14,743 13,399
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Operating income 1,576 809 1,204 1,873 275
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Net income/(loss) attributable to equity 1,002 403 680 1,112 (416)
holders of the parent
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Basic earnings/(loss) per share (US$)[3] 0.33 0.13 0.22 0.38 (0.23)
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Operating income/ tonne (US$/t) 75 40 59 85 13
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EBITDA 2,231 1,661 1,897 1,770 927
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EBITDA/ tonne (US$/t) 106 83 93 80 43
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Steel-only EBITDA/ tonne (US$/t) 83 68 83 73 39
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Crude steel production (Mt) 23.6 21.8 22.6 23.1 23.2
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Steel shipments (Mt) 21.1 20.0 20.3 22.1 21.5
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Own iron ore production (Mt) 14.0 13.9 13.7 13.5 14.1
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Iron ore shipped at market price (Mt) 8.7 8.1 8.1 9.6 7.8
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Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
"I am satisfied with the first quarter results, which reflect the anticipated
positive momentum in the market and the progress we are making internally to
make the business stronger. All parts of the business reported improved EBITDA
as steel prices responded to higher raw material costs and strong volume growth
saw steel shipments increase by 5.1% compared with the fourth quarter. Our
mining segment benefitted from an increase in iron-ore shipped at market prices
as well as the higher raw material price environment. Looking ahead, we expect
market conditions to be broadly stable in the second quarter. While this is
encouraging, the steel industry is still impacted by unfair imports in many of
our key markets and we hope to see further progress in ensuring the necessary
trade solutions".
First quarter 2017 earnings analyst conference call
ArcelorMittal will hold a conference call hosted by Heads of Finance and
Investor Relations for members of the investment community to discuss the three-
month period ended March 31, 2017 on:
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Date US Eastern time London CET
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Friday May 12, 2017 9.30am 2.30pm 3.30pm
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The dial in numbers are:
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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 14206907#
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US local: 1 86 6719 2729 +1 24 0645 0345 14206907#
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US (New York): 1 86 6719 2729 + 1 64 6663 7901 14206907#
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France: 0800 914780 +33 1 7071 2916 14206907#
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Germany: 0800 965 6288 +49 692 7134 0801 14206907#
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Spain: 90 099 4930 +34 911 143436 14206907#
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Luxembourg: 800 26908 +352 27 86 05 07 14206907#
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A replay of the conference call will be available for one week by
dialing:
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Number Language Access code
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+49 (0) English 506022#
1805 2047 088
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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 18 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 metric tonnes, while own iron ore production reached 55.2
million metric 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 of 0.80x in the first quarter of 2017
("1Q 2017") as compared to 0.84x for the fourth quarter of 2016 ("4Q 2016") and
0.72x for the first quarter of 2016 ("1Q 2016").
The Company's effort to improve the 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 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
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Mining 0.58 1.39 1.08 0.84 0.75
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NAFTA 0.85 0.87 0.89 0.62 0.91
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Brazil 0.41 0.42 0.20 0.46 0.34
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Europe 1.20 0.92 1.17 1.11 0.78
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ACIS 0.45 0.61 0.55 0.53 0.69
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Total Steel 0.83 0.75 0.80 0.78 0.71
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Total (Steel and Mining) 0.80 0.84 0.84 0.79 0.72
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Key corporate responsibility highlights for 1Q 2017:
* ArcelorMittal's 2016 annual review entitled "Sustainable Progress" was
published on May 3, 2017, demonstrating the significant steps the Company
has taken towards integrated reporting. It sets out the progress towards its
Action 2020 plan, segment by segment, referencing the importance of social
and environmental value drivers in this process. The report also includes a
section on Beyond 2020, which identifies the key drivers for long-term value
creation and outlines several initiatives the Company is undertaking to
deliver on as follows:
* critical breakthrough carbon capture and utilisation technology to
reduce CO2 emissions
* a new Sustainable Innovation tool to ensure all new Global R&D projects
make an improved contribution to sustainable development
* the ResponsibleSteel(TM) scheme, which is bringing together customers,
suppliers, steelmakers and others, to create a common, trusted, social
and environmental certification standard. ArcelorMittal plays a leading
role and began to pilot a draft standard in March 2017.
* ArcelorMittal Zenica (Bosnia & Herzegovina) undertook, in February 2017, an
industrial-scale installation of the Company's new hybrid filter technology,
designed to reduce air emissions at the sinter plant to well below the EU
limit. A second installation will follow.
Analysis of results for 1Q 2017 versus 4Q 2016 and 1Q 2016
Total steel shipments in 1Q 2017 were 5.1% higher at 21.1 million metric tonnes
as compared with 20.0 million metric tonnes for 4Q 2016 primarily due to
improved shipments in NAFTA (+12.0%), Europe (+7.1%) and ACIS (+4.1%) offset in
part by lower shipments in Brazil (-21.7%). Total steel shipments for 1Q 2017
were 1.9% lower as compared to 1Q 2016 primarily due to lower shipment volumes
in Brazil (-9.9%), Europe (-2.3%) and ACIS (-2.8%) offset in part by improved
shipments in NAFTA (+2.7%). 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 1Q 2017 were 0.9%
lower as compared with 21.2 million metric tonnes for 1Q 2016.
Sales in 1Q 2017 were $16.1 billion as compared to $14.1 billion for 4Q 2016 and
$13.4 billion for 1Q 2016. Sales in 1Q 2017 were 13.9% higher as compared to
4Q 2016 primarily due to higher average steel selling prices (+10.2%), higher
steel shipments (+5.1%), higher seaborne iron ore reference prices (+21.0%) and
higher market-priced iron ore shipments (+6.4%). Sales in 1Q 2017 were 20.1%
higher as compared to 1Q 2016 primarily due to higher average steel selling
prices (+24.9%), higher seaborne iron ore reference prices (+77.3%) and higher
market-priced iron ore shipments (+11.2%), offset in part by lower steel
shipments (-1.9%).
Depreciation for 1Q 2017 was lower at $655 million as compared to $696 million
for 4Q 2016 and stable as compared to $652 million in 1Q 2016. FY 2017
depreciation is expected to be approximately $2.8 billion (based on current
exchange rates).
Impairment charges for 1Q 2017 and 1Q 2016 were nil. Impairment charges for
4Q 2016 were $156 million mainly related to the Vanderbijlpark plant in South
Africa.
Operating income for 1Q 2017 was $1.6 billion as compared to $0.8 billion in
4Q 2016 and $275 million in 1Q 2016. Operating income for 4Q 2016 was impacted
by impairments as discussed above. Operating income for 1Q 2017 was higher as
compared to 4Q 2016 primarily due to higher operating results in steel business
as well as improved results in the Mining segment driven primarily by higher
seaborne iron ore prices.
Income from associates, joint ventures and other investments for 1Q 2017 was $86
million as compared to $14 million for 4Q 2016, primarily due to the annual
dividend declared by Erdemir ($45 million) and improved performance of Calvert,
offset in part by a loss on dilution of the Company's stake in China
Oriental[4]. Income from associates, joint ventures and other investments for
1Q 2016 of $324 million included a $329 million gain on disposal of Gestamp[5].
Net interest expense in 1Q 2017 was $223 million as compared to $221 million in
4Q 2016 and $332 million in 1Q 2016. Net interest expense was lower in 1Q 2017
as compared to 1Q 2016 primarily due to debt reduction including early bond
repayment via debt tenders during 2016.
Foreign exchange and other net financing costs in 1Q 2017 were $133 million as
compared to $278 million for 4Q 2016 and a gain in 1Q 2016 of $9 million.
Foreign exchange gains/losses primarily relate to the impact of the USD
movements on Euro denominated deferred tax assets and Euro denominated debt. For
1Q 2017 a foreign exchange gain of $35 million was recorded (as compared to a
loss of $128 million for 4Q 2016) mainly on account of a 1.4% depreciation of
the USD against the Euro (versus 5.6% appreciation in 4Q 2016). Foreign exchange
and other net financing costs for 1Q 2017 includes $159 million in premium
accrued on an early repayment of bonds (settled in April 2017), offset by non-
cash mark to market gains on certain derivatives (primarily mandatory
convertible bonds call options following the market price increase in the
underlying shares). Foreign exchange and other net financing costs in 4Q 2016
included $0.1 billion non-cash expense in connection with the issuance of shares
in the context of the B-BBEE transaction in South Africa[6]. Foreign exchange
and other net financing gain for 1Q 2016 included a foreign exchange gain of
$107 million primarily on account of a 4.6% depreciation of the USD against the
Euro.
ArcelorMittal recorded an income tax expense of $283 million for 1Q 2017 as
compared to an income tax benefit of $13 million for 4Q 2016 and an income tax
expense of $700 million for 1Q 2016. The tax expense in 1Q 2017 largely reflects
improved results in a number of countries. The prior periods were impacted by
the tax rate change and recoverability assessment of deferred tax assets in
Luxembourg.
Net income attributable to non-controlling interests for 1Q 2017 of $21 million
represents minority shareholders' share of net income recorded in ArcelorMittal
Mines Canada[7] and Belgo Bekaert Arames in Brazil offset in part by their share
of losses generated by ArcelorMittal South Africa. Net loss attributable to non-
controlling interests for 4Q 2016 of $66 million and for 1Q 2016 of $8 million
primarily represents their share of losses generated by ArcelorMittal South
Africa.
ArcelorMittal recorded net income for 1Q 2017 of $1,002 million, or $0.33
earnings per share(3), as compared to net income for 4Q 2016 of $403 million, or
$0.13 earnings per share(3), and a net loss for 1Q 2016 of $416 million, or
$0.23 loss per share(3).
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 completion
particulars
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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 3Q 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 2Q 2017((b))
Krakow (Poland) capacity by
0.9Mt/year
HDG increase Increasing HDG 2Q 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 2Q 2017) whilst making
further planned investments totalling ~$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 melt shop project is
currently on hold and is expected to be completed upon Brazil domestic
market recovery, the Company does not expect to increase shipments until
domestic demand improves.
d. ArcelorMittal Liberia is 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 3 million tonnes per annum
(Mtpa) 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 Gangra mine, haul road and related existing plant and equipment upgrades
are on track. 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 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
Sales 4,458 3,795 4,269 3,920 3,822
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Operating income 396 164 424 1,209 205
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Depreciation (128) (137) (142) (136) (134)
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Exceptional income[8] - - - 832 -
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EBITDA 524 301 566 513 339
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Crude steel production (kt) 6,216 5,197 5,632 5,735 5,644
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Steel shipments (kt) 5,610 5,011 5,364 5,443 5,463
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Average steel selling price (US$/t) 719 681 715 660 635
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NAFTA segment crude steel production increased 19.6% to 6.2 million metric
tonnes in 1Q 2017 as compared to 5.2 million metric tonnes for 4Q 2016 in line
with improved demand.
Steel shipments in 1Q 2017 increased by 12.0% to 5.6 million metric tonnes as
compared to 5.0 million metric tonnes in 4Q 2016, primarily driven by a 14.9%
increase in flat products volumes reflecting the end of the destock in the US
which negatively impacted shipments in the prior period.
Sales in 1Q 2017 increased by 17.5% to $4.5 billion as compared to $3.8 billion
in 4Q 2016, primarily due to higher average steel selling prices (+5.6%) and
higher steel shipment volumes as discussed above. Compared to the 4Q 2016,
average steel selling prices for long products improved +10.0% and for flat
products improved +4.1%.
Operating income in 1Q 2017 increased to $396 million as compared to operating
income of $164 million in 4Q 2016 and operating income of $205 million in
1Q 2016.
EBITDA in 1Q 2017 increased by 74% to $524 million as compared to $301 million
in 4Q 2016 primarily due to higher steel shipment volumes (+12.0%) and a
positive price cost impact with average steel selling prices higher by +5.6%.
EBITDA in 1Q 2017 improved 54.4% as compared to $339 million in 1Q 2016 due
primarily to a positive price cost impact with average steel selling prices
higher by +13.2%.
Brazil
(USDm) unless otherwise shown 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
Sales 1,610 1,751 1,729 1,488 1,255
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Operating income 175 143 233 149 89
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Depreciation (71) (70) (68) (64) (56)
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EBITDA 246 213 301 213 145
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Crude steel production (kt) 2,710 2,778 2,888 2,800 2,667
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Steel shipments (kt) 2,226 2,841 2,751 2,689 2,472
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Average steel selling price (US$/t) 678 565 582 515 474
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Brazil segment crude steel production decreased by 2.5% to 2.7 million metric
tonnes in 1Q 2017 as compared to 2.8 million metric tonnes in 4Q 2016, primarily
due to planned maintenance at Tubarao, Brazil.
Steel shipments in 1Q 2017 decreased by 21.7% to 2.2 million metric tonnes as
compared to 2.8 million metric tonnes in 4Q 2016, primarily due to a 27.3%
decrease in flat product steel shipments (primarily export shipments, given the
need to rebuild inventory following maintenance and ahead of the seasonally
stronger demand period, as well as temporary shipment delays) and a 10.2%
decrease in long product steel shipments (primarily reflecting weak domestic
demand).
Sales in 1Q 2017 decreased by 8.0% to $1.6 billion as compared to $1.8 billion
in 4Q 2016, due to lower steel shipments as discussed above, offset in part by
20.1% increase in average steel selling prices, with average US dollar selling
prices for flat products improving by 28% (reflecting higher domestic prices as
well as the mix benefit of lower slab exports) and improving by 11.3% for long
products.
Operating income in 1Q 2017 increased to $175 million as compared to an
operating income of $143 million in 4Q 2016 and operating income of $89 million
in 1Q 2016.
EBITDA in 1Q 2017 increased by 15.3% to $246 million as compared to $213 million
in 4Q 2016 primarily due to a $21 million provision reversal as well as a
positive price cost impact offset in part by lower steel shipment volumes.
EBITDA in 1Q 2017 was 69.1% higher as compared to $145 million in 1Q 2016 due to
a positive price cost impact with a 43.2% increase in average steel selling
prices in US$ terms, offset in part by lower steel shipments by -9.9% (flat
exports down 14.8% and long product down 14.2%).
Europe
(USDm) unless otherwise shown 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
Sales 8,222 7,139 7,172 7,810 7,151
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Operating income 636 387 414 383 86
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Depreciation (273) (311) (303) (293) (277)
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Impairment - - - (49) -
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EBITDA 909 698 717 725 363
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Crude steel production (kt) 11,212 10,173 10,571 10,720 11,171
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Steel shipments (kt) 10,208 9,535 9,382 10,886 10,444
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Average steel selling price (US$/t) 649 590 596 562 530
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Europe segment crude steel production increased by 10.2% to 11.2 million metric
tonnes in 1Q 2017, as compared to 10.2 million metric tonnes in 4Q 2016 (which
was impacted by the planned reline at ArcelorMittal Asturias, Spain).
Steel shipments in 1Q 2017 increased by 7.1% to 10.2 million metric tonnes as
compared to 9.5 million metric tonnes in 4Q 2016, primarily due to a 12.8%
increase in flat product shipments due to improved demand offset partly by a
5.4% decline in long product steel shipments.
Sales in 1Q 2017 increased 15.2% to $8.2 billion as compared to $7.1 billion in
4Q 2016, primarily due to higher average steel selling prices (+9.9%), (with
flat and long products average steel selling prices increasing +9.4% and +9.9%,
respectively), and higher steel shipments as discussed above.
Operating income in 1Q 2017 was $636 million as compared to $387 million in
4Q 2016 and $86 million in 1Q 2016.
EBITDA in 1Q 2017 increased by 30.3% to $909 million as compared to $698 million
in 4Q 2016 primarily due to higher steel volumes. EBITDA in 1Q 2017 improved
150.4% as compared to 1Q 2016 primarily on account of higher average steel
selling prices (+22.3%) and cost efficiency improvements, offset in part by
higher input costs.
ACIS
(USDm) unless otherwise shown 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
Sales 1,807 1,526 1,586 1,581 1,192
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Operating income/ (loss) 116 (92) 156 162 (15)
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Depreciation (75) (78) (77) (80) (76)
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Impairment - (156) - - -
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EBITDA 191 142 233 242 61
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Crude steel production (kt) 3,492 3,646 3,552 3,926 3,668
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Steel shipments (kt) 3,221 3,095 3,408 3,453 3,315
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Average steel selling price (US$/t) 502 432 419 409 320
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ACIS segment crude steel production in 1Q 2017 decreased by 4.2% to 3.5 million
metric tonnes as compared to 3.6 million metric tonnes in 4Q 2016 primarily due
to planned maintenance of BF#9 in Ukraine.
Steel shipments in 1Q 2017 increased by 4.1% to 3.2 million metric tonnes as
compared to 3.1 million metric tonnes in 4Q 2016 primarily due to a seasonal
improvement in South Africa offset in part by lower steel shipments in the CIS
impacted by the planned maintenance as described above.
Sales in 1Q 2017 increased 18.4% to $1.8 billion as compared to $1.5 billion in
4Q 2016, primarily due to higher steel shipments (+4.1%) and higher average
steel selling prices (+16.2%).
Operating income in 1Q 2017 was $116 million as compared to an operating loss of
$92 million in 4Q 2016 and operating loss of $15 million in 1Q 2016. Operating
loss in 4Q 2016 was impacted by impairments of $156 million mainly related to
the Vanderbijlpark plant in South Africa.
EBITDA in 1Q 2017 increased +34.2% to $191 million as compared to $142 million
in 4Q 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.
EBITDA in 1Q 2017 was higher than 4Q 2016 primarily on account of higher steel
shipment volumes (+4.1%). EBITDA in 1Q 2017 was higher as compared to $61
million in 1Q 2016, primarily due to a positive price cost impact.
Mining
(USDm) unless otherwise shown 1Q 17 4Q 16 3Q 16 2Q 16 1Q 16
Sales 1,030 896 809 809 600
-------------------------------------------------------------------------------
Operating income/ (loss) 378 203 103 62 (2)
-------------------------------------------------------------------------------
Depreciation (102) (94) (101) (101) (100)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
EBITDA 480 297 204 163 98
-------------------------------------------------------------------------------
Own iron ore production ((a) )(Mt) 14.0 13.9 13.7 13.5 14.1
-------------------------------------------------------------------------------
Iron ore shipped externally and internally at 8.7 8.1 8.1 9.6 7.8
market price ((b) )(Mt)
-------------------------------------------------------------------------------
Iron ore shipment - cost plus basis (Mt) 4.7 5.4 5.8 5.8 5.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Own coal production((a) )(Mt) 1.7 1.8 1.6 1.4 1.4
-------------------------------------------------------------------------------
Coal shipped externally and internally at market 0.8 0.9 1.0 0.7 0.9
price((b) )(Mt)
-------------------------------------------------------------------------------
Coal shipment - cost plus basis (Mt) 0.9 0.9 0.9 0.8 0.8
-------------------------------------------------------------------------------
(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 1Q 2017 increased by 0.7% to 14.0 million metric
tonnes as compared to 13.9 million metric tonnes in 4Q 2016 due to increased
production in Mexico (Volcan mine restarted February 2017) and Liberia, offset
in part by seasonally lower production in Canada and lower production in the US.
Own iron ore production in 1Q 2017 decreased by 1.0% as compared to 14.1 million
metric tonnes in 1Q 2016 primarily due to decreased production in Liberia and US
offset in part by higher production in Mexico.
Own iron ore production is expected to increase in 2017: In Liberia, based on
Tokadeh ore together with the transition to the new Gangra deposit production is
expected to increase to 3Mt in 2017 (versus 2Mt in 2016) before ramping up to
5Mtpa in 2018; the restart of the Volcan mine in Mexico in February 2017 is
expected to produce an additional 2Mt (in 2017 versus 2016); production in
Ukraine is expected to recover following resolution of a delay in accessing new
tailings disposal land which negatively impacted production in 2016 by
approximately 1Mt.
Market-priced iron ore shipments in 1Q 2017 increased 6.4% to 8.7 million metric
tonnes as compared to 8.1 million metric tonnes in 4Q 2016, primarily driven by
higher shipments in Mexico, Ukraine and ArcelorMittal Mines Canada. During
4Q 2016 market-priced iron ore shipments in ArcelorMittal Mines Canada were
impacted by logistics and transportation issues following severe weather
conditions. Market-priced iron ore shipments in 1Q 2017 increased by +11.2% as
compared to 1Q 2016 driven by increased ArcelorMittal Mines Canada shipments and
Mexico offset in part by lower Liberia shipments. Given expected higher
production described above, FY 2017 market-priced iron ore shipments are
expected to increase by approximately 10% versus FY 2016.
Own coal production in 1Q 2017 decreased marginally by 2.6% to 1.7 million
metric tonnes as compared to 4Q 2016. Own coal production in 1Q 2017 increased
20.0% as compared to 1Q 2016 with increases at both Kazakhstan and Princeton
(US) mines.
Market-priced coal shipments in 1Q 2017 decreased 11.9% to 0.8 million metric
tonnes as compared to 4Q 2016 primarily due to decreased shipments at Princeton
(US). Market-priced coal shipments in 1Q 2017 decreased 7.1% as compared to
1Q 2016 primarily due to decreased shipments at Princeton (US) offset in part by
increased shipments in Kazakhstan.
Operating income in 1Q 2017 increased to $378 million as compared to an
operating income of $203 million in 4Q 2016, and an operating loss of $2 million
in 1Q 2016, primarily for the reasons discussed below.
EBITDA in 1Q 2017 increased 61.5% to $480 million as compared to $297 million in
4Q 2016, primarily due to increased seaborne iron ore market reference prices
(+21.0%) and increased coal prices. EBITDA in 1Q 2017 was significantly higher
as compared to $98 million in 1Q 2016, primarily due to higher seaborne iron ore
reference prices (+77.3%), higher market-priced iron ore shipment volumes
(+11.2%) and higher coal prices.
Liquidity and Capital Resources
For 1Q 2017, net cash used in operating activities was $299 million as compared
to net cash provided by operating activities of $1,653 million in 4Q 2016. The
net cash used in operating activities during 1Q 2017 was impacted by a working
capital investment ($2,181 million) as compared to a working capital release
($495 million) in 4Q 2016. The change in the working capital position reflects
seasonal changes in inventory and receivables as well as the effects of higher
selling and raw material prices.
Net cash used in investing activities during 1Q 2017 was $598 million as
compared to $809 million in 4Q 2016 and $572 million in 1Q 2016. Capital
expenditure decreased to $580 million in 1Q 2017 as compared to $802 million in
4Q 2016 and $586 million in 1Q 2016. FY 2017 capital expenditure is expected to
be $2.9 billion.
Net cash provided by financing activities for 1Q 2017 was $666 million as
compared to net cash used in financing activities of $468 million for 4Q 2016
and net cash provided by financing activities of $140 million for 1Q 2016. Net
cash provided by financing activities for 1Q 2017 primarily includes proceeds
from the European Investment Bank loan[9] of ?350 million ($373 million) and
$0.3 billion of commercial paper issuances. Net cash used in financing
activities for 4Q 2016 primarily includes repayments of a $0.3 billion loan and
$0.5 billion of short term facilities, offset in part by a $0.3 billion increase
in commercial paper issuances. In addition, while not reflected in the above
amounts, the Company used $1,040 million of cash and liquidity resources to
redeem outstanding bonds on April 3, 2017 (see Key recent developments).
During 1Q 2017, the Company paid dividends of $40 million primarily to minority
shareholders in ArcelorMittal Mines Canada. During 4Q 2016 and 1Q 2016, the
Company paid dividends of $7 million and $6 million, respectively, to minority
shareholders in Belgo Bekaert Arames in Brazil.
As of March 31, 2017, the Company's cash and cash equivalents amounted to $2.4
billion as compared to $2.6 billion at December 31, 2016 and $2.9 billion at
March 31, 2016. Gross debt increased to $14.5 billion as at March 31, 2017, as
compared to $13.7 billion at December 31, 2016 and $20.2 billion at March
31, 2016. The above-referenced usage of cash to redeem bonds on April 3, 2017 is
noted in this respect.
As of March 31, 2017, net debt increased to $12.1 billion as compared with $11.1
billion at December 31, 2016 (primarily due to a working capital investment),
but lower as compared to $17.3 billion as of March 31, 2016.
As of March 31, 2017, the Company had liquidity of $7.9 billion, consisting of
cash and cash equivalents of $2.4 billion and $5.5 billion of available credit
lines[10]. The $5.5 billion credit facility contains a financial covenant of
4.25x Net debt / EBITDA. On March 31, 2017, the average debt maturity was 6.4
years.
Key recent developments
* On May 11, 2017, following the approval of the Reverse Stock Split by the
Extraordinary General Meeting of shareholders of ArcelorMittal held on May
10, 2017, ArcelorMittal announced that it will proceed to consolidate each
three existing shares in the Company without nominal value into one share
without nominal value (the "Reverse Stock Split"). The Reverse Stock Split
will become effective on May 22, 2017.
* On May 10, 2017, the Annual and Extraordinary General Meetings of
shareholders of ArcelorMittal held in Luxembourg approved all resolutions on
their respective agendas by a strong majority. A total of 63.19% of the
voting rights were represented at the general meetings. The results of the
votes are posted on corporate.arcelormittal.com under "Investors > Equity
Investors > Shareholders' meetings > General Meetings - 10 May 2017" where
the full documentation regarding to the general meetings is available.
The shareholders re-elected Mr. Lakshmi N. Mittal, Mr. Bruno Lafont and Mr.
Wurth as directors of ArcelorMittal for a term of three years each. The
Board of Directors took note of Mr. Narayanan Vaghul's decision to resign
from the Board of Directors. Mrs. Karyn Ovelmen will succeed Mr. Narayanan
Vaghul as the chairman of the Audit & Risk Committee. Mr. Lewis Kaden was
not re-elected taking into consideration the Company's 12 consecutive years'
term policy for independent directors and will be succeeded by Mr. Bruno
Lafont as the new Lead Independent Director and chairman of the
Appointments, Remuneration and Corporate Governance Committee. The Board of
ArcelorMittal thanked both Mr. Narayanan Vaghul and Mr. Lewis Kaden for
their contribution and service.
* On March 1, 2017, ArcelorMittal's Board of Directors had taken note of Mr.
Wilbur Ross' resignation from the Board as a consequence of his confirmation
as United States Secretary of Commerce. The Board of ArcelorMittal
congratulated Mr. Ross on his new role. Commenting, Mr. Lakshmi N. Mittal,
Chairman & CEO, ArcelorMittal, said: "I've known Wilbur for more than a
decade, since we bought his company International Steel Group in 2004. Since
then he has been a very active and engaged member of our Board and has
always been a trusted and valued source of advice to me. He's a very astute
and successful businessman, whose many years of experience at the heart of
international finance and commerce mean he is very well positioned to shape
policy that promotes economic growth. I am sure he will make an excellent
Commerce Secretary, bringing great energy, experience and wisdom to the
role. It is very good news to have such an accomplished businessman and
investor in government."
* On March 1, 2017, ArcelorMittal announced the publication of the notice to
redeem all of its outstanding $1,500 million 9.850% Notes due June 1, 2019.
The settlement, financed with existing cash and liquidity, occurred on April
3, 2017, with total cash spent of $1,040 million including accrued interest
and premium on early repayment.
* On February 23, 2017, ArcelorMittal Brasil S.A. and Votorantim S.A.
announced the signing of a definitive agreement, pursuant to which
Votorantim's long steel businesses in Brazil, Votorantim Siderurgia, will
become a subsidiary of ArcelorMittal Brasil and Votorantim will hold a
minority stake in ArcelorMittal Brasil. Votorantim's long steel operations
in Argentina (Acerbrag) and Colombia (PazdelRío) were not included in the
transaction. The combination of the businesses will result in a long product
steel producer with annual crude steel capacity of 5.6 million metric tonnes
and annual rolling capacity of 5.4 million metric tonnes. The transaction is
subject to regulatory approvals in Brazil, including the approval of the
Brazilian anti-trust authority CADE. Until closing, ArcelorMittal Brasil and
Votorantim Siderurgia will remain fully separate and independent companies.
* On February 23, 2017, Toyota Europe awarded ArcelorMittal its 'Built in
Quality' supplier award in recognition of the Company's impressive quality
performance. 'Built in Quality' is a Toyota methodology that aims to
continuously improve quality. Toyota trains its suppliers to understand and
implement this methodology in the sites that manufacture products for the
automotive company. ArcelorMittal's 'Built in Quality' award follows the
implementation of the methodology, which began around 10 years ago, and
comes in recognition of ArcelorMittal's quality performance that has
continuously improved over the last three years. Toyota Europe gave a number
of reasons for recognising ArcelorMittal with the award, including:
* A low number of claims (e.g. defects), exceeding Toyota Europe's quality
target by more than 15%
* Recognition as the best steel supplier in Toyota Europe's annual
supplier assessment for the second consecutive year
* The significant and increasing gap between ArcelorMittal's performance
and that of its competitors
* Zero quality problem reports (QPRs) in 2016 for ArcelorMittal Mardyck in
France (part of the Atlantique and Lorraine cluster), the main mill
supplying Toyota Europe with automotive and exposed galvannealed steels
* Recognition as the best quality steel supplier for Toyota Manufacturing
Russia in 2016.
Recent regulatory filings
* On March 28, 2017, ArcelorMittal published the statutory financial
statements of ArcelorMittal parent company for the year ended December
31, 2016. These financial statements have been filed with the electronic
database of the Luxembourg Stock Exchange (www.bourse.lu) and are available
on http://corporate.arcelormittal.com under "Investors > Financial reports >
Annual reports".
* On February 28, 2017, ArcelorMittal published its annual report for the year
ended December 31, 2016. The report has been filed with the electronic
database of the Luxembourg Stock Exchange (www.bourse.lu) and is available
on http://corporate.arcelormittal.com under "Investors > Financial reports
> Annual reports".
* On February 23, 2017, ArcelorMittal filed its Annual Report 2016 on Form 20-
F with the U.S. Securities and Exchange Commission (SEC). The report is
available on ArcelorMittal's
website http://corporate.arcelormittal.com under SEC filings.
Outlook and guidance
The following global apparent steel consumption ("ASC") figures have been
updated to reflect the Company's final 2016 estimates. The outlook for 2017
remains unchanged from those presented in connection with the full year 2016
results announcement.
Global ASC is estimated to have expanded by +1% in 2016. Based on the current
economic outlook, ArcelorMittal expects global ASC to grow further in 2017 by
between ~ +0.5% to +1.5%. By region: ASC in the US (excluding Pipe & tube)
declined in 2016 by approximately -2.0%, driven in large part by a significant
destock in the 2H 2016. However, underlying demand continues to expand, and the
expected absence of a further destock in 2017 should support ASC growth in the
US of approximately +3.0% to 4.0% in 2017. In Europe, ArcelorMittal expects the
pick-up in underlying demand to continue, supported by the strength of the
automotive end market, but apparent demand is expected to be modest at +0.5% to
+1.5% in 2017 (versus growth of +3.0% in 2016). In Brazil, following the
significant decline in ASC in 2016 (-13.8%) ASC is expected to grow by +3.0% to
+4.0% in 2017 as the economy mildly recovers as consumer confidence returns. In
the CIS, following an ASC decline of -3.8% in 2016, the region should stabilize
in 2017 with ASC similar to 2016 levels (-0.5% to +0.5%). In China, following
ASC growth of +1.3% in 2016, demand is expected to stabilise in 2017 (decline of
around 0% to -1.0%).
Capex spend in 2017 is expected to increase to $2.9 billion (from $2.4 billion
in 2016) as the Group seeks to capitalize on opportunities to grow value and
returns. In addition, interest expense is expected to decline to $0.9 billion
(as compared to $1.1 billion in FY 2016); while cash taxes and contributions to
fund pensions are expected to increase by a total of $0.2 billion. As a result,
the Company expects the cash needs of the business in 2017 to increase to $5.0
billion (from $4.5 billion in 2016).
ArcelorMittal Condensed Consolidated Statement of Financial Position(1)
Mar 31, Dec 31, Mar 31,
In millions of U.S. dollars 2017 2016 2016
-------------------------------------------------------------------------------
ASSETS
-------------------------------------------------------------------------------
Cash and cash equivalents 2,402 2,615 2,863
-------------------------------------------------------------------------------
Trade accounts receivable and other 3,971 2,974 3,325
-------------------------------------------------------------------------------
Inventories 16,393 14,734 12,866
-------------------------------------------------------------------------------
Prepaid expenses and other current assets 2,251 1,665 2,793
-------------------------------------------------------------------------------
Assets held for sale[11] 126 259 301
-------------------------------------------------------------------------------
Total Current Assets 25,143 22,247 22,148
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Goodwill and intangible assets 5,716 5,651 5,689
-------------------------------------------------------------------------------
Property, plant and equipment 35,049 34,831 36,213
-------------------------------------------------------------------------------
Investments in associates and joint ventures 4,470 4,297 4,45
Unternehmensinformation / Kurzprofil:
Datum: 12.05.2017 - 07:01 Uhr
Sprache: Deutsch
News-ID 542085
Anzahl Zeichen: 65619
contact information:
Town:
London
Kategorie:
Business News
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