Luxembourg, November 6, 2015 – 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 nine month periods ended September 30, 2015.
Highlights:
- Health and safety: LTIF rate of 0.78x in 3Q 2015, comparable to 3Q 2014 levels
- EBITDA of $1.4 billion in 3Q 2015, stable compared with 2Q 2015
- Steel shipments of 21.1Mt in 3Q 2015, 2.1% lower YoY; Steel shipments of 64.8Mt in 9M 2015, up 1.4% YoY
- 3Q 2015 own iron ore production of 15.4 Mt, down 2.9% YoY; 10.3Mt iron ore shipped and reported at market prices, an increase of 3.1% YoY
- 9M 2015 own iron ore production of 47.3 Mt, stable YoY; 30.5Mt iron ore shipped and reported at market prices, an increase of 2.0% YoY
- 9M 2015 iron ore unit cash costs reduced by 17% YoY, exceeding the 15% target for 2015
- Net loss of $0.7 billion in 3Q 2015 including $0.5 billion exceptional charge related to the write-down of inventory following the rapid decline of international steel prices[2]
- Liquidity at $9.6 billion remains strong as of September 30, 2015
- Net debt of $16.8 billion as of September 30, 2015 compared to $16.6 billion as of June 30, 2015 due largely to seasonal working capital investments ($0.1 billion); Net debt lower by $1.0 billion as compared to September 30, 2014
Outlook and guidance:
- Operating conditions have deteriorated in recent months, both in terms of the international steel price environment (driven by unsustainably low export prices from China) and order volumes (as customers adopt a “wait and see” mind-set). As a result, the Company now expects full year 2015 EBITDA of $5.2-$5.4 billion.
- Full year 2015 capital expenditure is expected to be approximately $2.8 billion as compared to previous guidance of approximately $3.0 billion; net interest expense is expected to be approximately $1.3 billion from previous guidance of approximately $1.4 billion. The Company continues to expect positive free cash flow generation in 2015 and to end the year with net debt below $15.8 billion.
Key developments supporting outlook:
- A combination of Company actions and known developments are expected to improve EBITDA in 2016 by $1 billion relative to the 4Q 2015 run-rate level. More specifically by region:
- Americas: uplift from ramp-up of Calvert and improved value-added mix; benefits of Americas Asset Optimization Program and Brazil Value Plan;
- ACIS: improvement driven by new iron ore supply agreement and tariffs in South Africa, as well as the benefits of new coke battery and increased PCI usage in CIS;
- Europe: further benefits from transformation programme; and
- Mining: a further >10% reduction in average unit iron ore cash costs.
- In addition, the Company is reducing its cash requirements in 2016 by approximately $1 billion as compared to 2015. This is achieved through lower capex spend, lower cash interest costs, lower cash taxes and suspending the dividend for the financial year 2015.
- These actions and developments are expected to ensure that the Company continues to generate positive free cash flow, reduce net debt and maintain strong liquidity.
Financial highlights (on the basis of IFRS[1]):
| (USDm) unless otherwise shown | 3Q 15 | 2Q 15 | 3Q 14 | 9M 15 | 9M 14 |
|---|---|---|---|---|---|
| Sales | 15,589 | 16,890 | 20,067 | 49,597 | 60,559 |
| EBITDA | 1,351 | 1,399 | 1,905 | 4,128 | 5,422 |
| Operating income | 20 | 579 | 959 | 1,170 | 2,465 |
| Net (loss) / income attributable to equity holders of the parent | (711) | 179 | 22 | (1,260) | (131) |
| Basic (loss) / income per share (US$) | (0.40) | 0.10 | 0.01 | (0.70) | (0.08) |
| Own iron ore production (Mt) | 15.4 | 16.4 | 15.8 | 47.3 | 47.2 |
| Iron ore shipped at market price (Mt) | 10.3 | 10.8 | 10.0 | 30.5 | 29.9 |
| Crude steel production (Mt) | 23.1 | 24.0 | 23.9 | 70.8 | 70.0 |
| Steel shipments (Mt) | 21.1 | 22.2 | 21.5 | 64.8 | 63.9 |
| EBITDA/tonne (US$/t) | 64 | 63 | 89 | 64 | 85 |
| Steel-only EBITDA/tonne (US$/t) | 57 | 58 | 76 | 58 | 68 |
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
“Whilst we have delivered stable EBITDA compared with the second quarter, the already challenging operating conditions have further deteriorated during recent months, largely due to additional declines in steel prices caused by exceptionally low Chinese export prices. Our focus is on ensuring we take all the necessary steps to strengthen our competitiveness in this difficult environment. Measures we have taken so far are yielding results; costs in our mining division have reduced by 17% so far in 2015 versus an initial target of 15%, and net debt is $1 billion lower than a year ago. Whilst we expect market conditions to remain challenging in 2016, we have a number of important programs underway across the business which will structurally improve EBITDA in 2016 and we also expect a significant reduction in our cash requirements.”
“Whilst we are confident our actions are the right ones, there are also important issues for governments to address, specifically relating to unfair trade. We are encouraged by various examples of trade action being initiated in response to dumping, but the process needs to be faster in order to be fully effective.”
About ArcelorMittal
ArcelorMittal is the world’s leading steel and mining company, with a presence in 60 countries and an industrial footprint in 19 countries. Guided by a philosophy to produce safe, sustainable steel, we are the leading supplier of quality steel in the major global steel markets including automotive, construction, household appliances and packaging, with world-class research and development and outstanding distribution networks.
Through our core values of sustainability, quality and leadership, we operate responsibly with respect to the health, safety and wellbeing of our employees, contractors and the communities in which we operate.
For us, steel is the fabric of life, as it is at the heart of the modern world from railways to cars and washing machines. We are actively researching and producing steel-based technologies and solutions that make many of the products and components people use in their everyday lives more energy efficient.
We are one of the world’s five largest producers of iron ore and metallurgical coal and our mining business is an essential part of our growth strategy. With a geographically diversified portfolio of iron ore and coal assets, we are strategically positioned to serve our network of steel plants and the external global market. While our steel operations are important customers, our supply to the external market is increasing as we grow.
In 2014, ArcelorMittal had revenues of $79.3 billion and crude steel production of 93.1 million tonnes, while own iron ore production reached 63.9 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/