Luxembourg, May 7, 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 month period ended March 31, 2015.
Highlights:
- Health and safety: LTIF rate of 0.88x in 1Q 2015 as compared to 0.89x in 4Q 2014
- EBITDA of $1.4 billion in 1Q 2015 (including $0.1 billion onerous contract provision)[2], versus $1.8 billion in 1Q 2014
- Despite significant forex headwinds, 1Q 2015 underlying steel-only EBITDA stable versus 1Q 2014[3]
- Net loss of $0.7 billion in 1Q 2015 (primarily forex driven) as compared to a net loss of $0.2 billion in 1Q 2014
- Steel shipments of 21.6Mt, an increase of 3% as compared to 21Mt in 1Q 2014
- 15.6 Mt own iron ore production, an increase of 5% as compared to 14.8 Mt in 1Q 2014; 9.4 Mt shipped and reported at market prices as compared to 9.3 Mt in 1Q 2014
- Iron ore unit cash costs down 13% YoY; FY 2015 cost reduction target increased to 15% (from 10% previously)
- Net debt of $16.6 billion as of March 31, 2015 as compared to $18.5 billion at March 31, 2014
Outlook and guidance:
- Whilst steel markets have evolved largely as per expectations, the subsequent deterioration of iron ore prices as well as a weaker U.S. market results in a headwind to guidance. Although the Company expects to benefit from further improvement in costs, both in mining and steel segments (including lower raw material costs), the Company now expects 2015 EBITDA within the range of $6.0 – $7.0 billion
- Due to the benefits of foreign exchange as well as the postponement of some investment projects the Company has further reduced the FY 2015 capital expenditure budget to approximately $3.0 billion
- The Company continues to expect positive free cash flow in 2015 and to achieve progress towards the medium term net debt target of $15 billion
- The Company expects net interest expense of approximately $1.4 billion in 2015
Financial highlights (on the basis of IFRS[1]):
| (USDm) unless otherwise shown | 1Q 15 | 4Q 14 | 3Q 14 | 2Q 14 | 1Q 14 |
|---|---|---|---|---|---|
| Sales | 17,118 | 18,723 | 20,067 | 20,704 | 19,788 |
| EBITDA | 1,378 | 1,815 | 1,905 | 1,763 | 1,754 |
| Operating income | 571 | 569 | 959 | 832 | 674 |
| Net (loss) / income attributable to equity holders of the parent | (728) | (955) | 22 | 52 | (205) |
| Basic (loss) /earnings per share (USD) | (0.41) | (0.53) | 0.01 | 0.03 | (0.12) |
| Own iron ore production (Mt) | 15.6 | 16.7 | 15.8 | 16.6 | 14.8 |
| Iron ore shipped at market price (Mt) | 9.4 | 9.9 | 10.0 | 10.5 | 9.3 |
| Crude steel production (Mt) | 23.7 | 23.2 | 23.9 | 23.1 | 23.0 |
| Steel shipments (Mt) | 21.6 | 21.2 | 21.5 | 21.5 | 21.0 |
| EBITDA/tonne (US$/t) | 64 | 86 | 89 | 82 | 84 |
| Steel-only EBITDA/tonne (US$/t) | 59 | 75 | 76 | 64 | 63 |
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:
“We faced a number of headwinds in the first quarter, including a declining iron-ore price, a stronger dollar and surge of imports in the United States. As a result of which EBITDA declined to US$1.4 billion, although the underlying performance of our steel business remained similar to the first quarter of 2014. The performance in Europe was of particular note, with EBITDA improving 15% year-on-year. Off-setting the impact of these headwinds is a priority and we are focused on achieving a 15% reduction in mining costs and improving the competitive position of our US operations. Importantly, we still expect to remain free cash flow positive and further reduce net debt over the course of the year.”
[1]The financial information in this press release has been prepared consistently with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). While the interim financial information included in this announcement has been prepared in accordance with IFRS applicable to interim periods, this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting”. The numbers in this press release have not been audited. The financial information and certain other information presented in a number of tables in this press release have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this press release reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. This press release also includes certain non-GAAP financial measures.
[2]EBITDA in 1Q 2015 of $1,378 million was negatively impacted by a $69 million provision primarily related to onerous hot rolled and cold rolled in the US. EBITDA in 4Q 2014 of $1,815 million was negatively impacted by a $76 million provision related to onerous annual tin plate contracts at Weirton in the US, offset by the positive impact from the $79 million gain on disposal of Kuzbass coal mines in Russia.
[3]Underlying steel-only EBITDA in 1Q 2015 of $1,333 million is calculated as EBITDA of $1,378 million plus $69 million provision for onerous contracts in the US less $114 million Mining EBITDA. Steel-only EBITDA in 1Q 2014 of $1,321 million is calculated as EBITDA of 1,754 million less $433 million Mining EBITDA.