Luxembourg, February 4, 2013Aperam (referred to as “Aperam” or the “Company”) (Amsterdam, Luxembourg, Paris: APAM and NYRS: APEMY), today announced results for the three month and twelve month periods ending December 31, 2012
Highlights
-
Health and Safety frequency rate[2] of 1.3x in 2012 compared to 0.7x in 2011
- Shipments of 1,683 thousand tonnes in full year 2012, a 4% decrease compared to full year 2011
-
EBITDA[3] of USD 214 million in full year 2012, compared to USD 356 million in full year 2011
- Basic loss per share of USD 1.39 in 2012
- Cash inflow from operations amounted to USD 278 million in 2012
- Net debt of USD 816 million at December 31, 2012, representing a gearing of 26%, compared to a net debt of USD 878 million at December 31, 2011
Prospects
- EBITDA in Q1 2013 is expected to improve compared to Q4 2012. Due to higher activity, net debt is expected to increase in Q1 2013 compared to Q4 2012
Plan 2013-2014
- Expansion of Leadership Journey® to 2014. USD 150 million targeted over next 2 years
- Dividend stopped to accelerate net debt reduction. Target of net debt of USD 650 million by the end of 2014
Philippe Darmayan, CEO of Aperam, commented:
“In a difficult environment Aperam has been able in 2012 to successfully progress with its Leadership Journey® and reduce its net debt.
Looking ahead ,we continue to remain cautious considering the current general environment and industry volatility despite some positive signs of market improvement.
We have decided to expand our Leadership Journey® and accelerate our net debt reduction to be in a good position to capture industry opportunities.”
|
(USDm) unless otherwise stated |
12M ’12 | 12M ’11 | Q4 ’12 | Q3 ’12 | Q4 ’11 |
| Sales | 5,261 | 6,345 | 1,294 | 1,207 | 1,436 |
| EBITDA | 214 | 356 | 43 | 42 | 53 |
| Operating (loss) income | (106) | 45 | (45) | (29) | (29) |
| Net loss | (108) | (60) | (52) | (17) | (46) |
| Steel shipments (000t) | 1,683 | 1,749 | 407 | 410 | 429 |
| EBITDA/tonne (USD) | 127 | 204 | 106 | 102 | 124 |
| Basic loss per share (USD) | 1.39 | 0.76 | 0.68 | 0.21 | 0.57 |
Health & Safety results analysis
Health and Safety performance, based on Aperam personnel figures and contractors lost time injury frequency rate2, was 1.9x in the fourth quarter of 2012 compared to 1.3x in the third quarter of 2012.
Financial results analysis
Sales in the fourth quarter of 2012 increased by 7% to USD 1,294 million compared to USD 1,207 million in the third quarter of 2012. Shipments in the fourth quarter of 2012 were flat at 407 thousand tonnes compared to 410 thousand tonnes in the third quarter of 2012.
Depreciation and impairment expense in the fourth quarter of 2012 was USD 88 million, including USD 14 million of impairment relating to damaged assets in Gueugnon.
Aperam had an operating loss in the fourth quarter of USD 45 million compared to an operating loss of USD 29 million in the previous quarter.
Net interest expense and other financing costs in the fourth quarter of 2012 were USD 19 million, including financing costs of USD 19 million. Unrealized foreign exchange and derivative losses were USD 4 million in the fourth quarter of 2012.
The Company recorded a net loss of USD 52 million, inclusive of an income tax benefit of USD 15 million, in the fourth quarter of 2012.
Cash flows from operations in the fourth quarter were a positive USD 221 million, with a working capital decrease of USD 213 million. CAPEX in the fourth quarter was USD 37 million.
As of December 31, 2012, shareholder’s equity was USD 3,190 million and net financial debt was USD 816 million (gross financial debt as of December 31, 2012 was USD 1,042 million and cash & cash equivalents were USD 226 million).
Operating segment results analysis
Stainless & Electrical Steel
The Stainless & Electrical Steel segment had sales of USD 1,020 million in the fourth quarter of 2012. This represents an increase of 10% compared to sales of USD 930 million in the third quarter of 2012. Shipments during the fourth quarter were 400 thousand tonnes, including 249 thousand tonnes in Europe and 151 thousand tonnes in South America. This is an increase of 8% compared to shipments in the previous quarter of 370 thousand tonnes (219 thousand tonnes in Europe and 151 thousand tonnes in South America). Volume increased of 14% in Europe whereas volumes were flat in South America due to seasonal slowdown. Overall, average steel selling prices for the Stainless & Electrical Steel segment were slightly lower for the quarter.
The segment had EBITDA of USD 35 million in the fourth quarter of 2012 compared to USD 14 million in the third quarter of 2012. EBITDA from South America decreased from USD 26 million in the third quarter of 2012 to USD 24 million in the fourth quarter of 2012. The decrease in EBITDA in South America was primarily due to the seasonality impact but was partially offset by some positive mix improvement. EBITDA from Europe increased from negative USD 12 million in the third quarter of 2012 to positive USD 11 million in the fourth quarter of 2012. The improvement in EBITDA in Europe was primarily driven by a reduced seasonality, the impact from some positive price movements and the continuing progress of the Leadership Journey®.
The Stainless & Electrical Steel segment had an operating loss of USD 42 million during the fourth quarter of 2012 compared to an operating loss of USD 43 million in the third quarter of 2012. Depreciation and amortization expense was USD 77 million in the fourth quarter of 2012, including USD 14 million of impairment relating to damaged assets in Gueugnon.
Services & Solutions
The Services & Solutions segment had a 4% decrease in sales during the period, from USD 526 million in the third quarter of 2012 to USD 504 million in the fourth quarter of 2012. In the fourth quarter of 2012, shipments were 158 thousand tonnes compared to 165 thousand tonnes in the previous quarter. The Services & Solutions segment had slightly higher average selling prices for the period.
The segment had negative EBITDA in the fourth quarter of 2012 of USD 4 million compared to positive EBITDA of USD 9 million in the third quarter of 2012. The decrease in EBITDA was primarily driven by losses in the precision business units and some underperforming service centres. In the third quarter, there was a USD 8 million capital gain resulting from the disposal of assets related to the key Leadership Journey® project of Campinas.
Depreciation and amortization expense in the fourth quarter of 2012 was USD 7 million.
The Services & Solutions segment had an operating loss of USD 11 million in the fourth quarter of 2012 compared to an operating income of USD 2 million in the third quarter of 2012.
Alloys & Specialties
The Alloys & Specialties segment had sales in the fourth quarter of 2012 of USD 170 million, representing an increase of 22% compared to USD 139 million in the third quarter of 2012. Shipments were higher in the fourth quarter of 2012 at 9 thousand tonnes compared to 8 thousand tonnes in the third quarter of 2012, while average selling prices also increased quarter over quarter.
The Alloys & Specialties segment achieved EBITDA of USD 13 million in the fourth quarter of 2012 compared to USD 16 million in the third quarter of 2012. Despite higher volumes, EBITDA was down in the fourth quarter compared to the third quarter primarily as a result of the mix deterioration.
Depreciation and amortization expense in the quarter was USD 2 million.
The Alloys & Specialties segment had operating income of USD 11 million in the fourth quarter of 2012 compared to operating income of USD 15 million in the third quarter of 2012.
Recent developments
- On November 8, 2012, Moody’s downgraded the corporate family rating for Aperam S.A. to B1 from Ba3. Moody’s maintained the company’s negative outlook.
- On November 30, 2012, S&P lowered the long term corporate credit rating on Aperam to ‘B+’ from ‘BB-‘. S&P maintained its negative outlook on Aperam.
- On December 19, 2012, Aperam announced its financial calendar for the year 2013.
- On December 23, 2012, an accidental fire damaged the RD79 pickling and annealing line at the Gueugnon plant in France. Aperam is mitigating the resulting production fallout by stepping up production at its other active pickling and annealing lines and has in addition decided to temporarily relaunch two production lines at its plants in Genk, Belgium (BUL1) and Isbergues, France (Inox3) which were kept as capacity reserve. With these measures, Aperam will be able to supply its customers while the RD79 line is being rebuilt. The RD79 line is expected to be restarted before the second half of the year 2013.
New developments
- On February 4, 2013, Aperam announces that the Board of Directors will submit to a shareholder’s vote, at the next annual general meeting, a proposal to stop the dividend payment to accelerate the net debt reduction target of USD 650 million by the end of 2014. Capex is also expected to be reduced in full year 2013 compared to full year 2012 and concentrated on security, environment and cost reduction.
- On February 4, 2013, Aperam announces that in response to the current economic uncertainty and in a continuing effort to improve its cost competitiveness and profitability, the Company targets an expansion of the Leadership Journey® to 2014 with USD 150 million targeted over the next 2 years. This expansion of the Leadership Journey® in combination with the achievements realized under the previous Leadership Journey® target of USD 350 million by 2013 leads to a new combined target of USD 425 million by 2014.
- On February 4, 2013, Aperam announces that it obtained an in-principle refinancing commitment to extend a portion of 600 million USD of its current Secured Borrowing Base Revolving Credit Facility from March 2014 until March 2015.