ArcelorMittal Announces Global Results for Third Quarter
10/31/2012 - ArcelorMittal, the world’s largest integrated steel and mining company, announced results for the quarter ended 30 September 2012, commenting that operating conditions remain very challenging due to the slowdown in China.
ArcelorMittal, the world’s leading integrated steel and mining company, announced results for the three and nine- month periods ended 30 September 2012.
Highlights:
- Health and safety performance: LTIF rate of 1.0x in 3Q 2012 as compared to 0.8x in 2Q 2012 and 1.5x in 3Q 2011
- EBITDA of $1.3 billion in 3Q 2012 (including negative $0.1 billion from employee benefit charges) as compared to $2.4 billion in 2Q 2012 (which included positive $0.3 billion of gains on subsidiary divestments)
- Steel shipments of 19.9 million tonnes in 3Q 2012, a decrease of 8.3% as compared to 2Q 2012 and 5.7% below 3Q 2011
- 14.3 million tonnes iron ore produced in 3Q 2012, up +1.3% YoY; 7.1million tonnes shipped and reported at market price, up +6.7% YoY
- Net debt increased by $1.2 billion during 3Q 2012 to $23.2 billion, driven by negative operating cash flow (including a $0.3 billion investment in working capital) and negative foreign exchange impacts partially offset by proceeds from asset disposal and an issuance of perpetual securities
- Liquidity of $13.4 billion at end 3Q 2012, with an average debt maturity of 6.2 years
- Asset optimization plan progressing: Closure of liquid phase at Liege, Belgium agreed; announced intention to launch a project to permanently close the liquid phase of Florange in France
- Management gains plan completed with $4.8 billion savings achieved ahead of schedule
Outlook and guidance:
- The Q3 2012 fall in the iron ore price and the weaker global economic backdrop adversely impacted steel prices and steel volumes as well as the profitability of our mining operations, affecting our previous expectations for group profitability in 2H 2012
- The Company now expects to achieve FY 2012 EBITDA of approximately $7 billion
- Iron ore shipments remain on track to increase by approximately 10% in FY 2012 compared to FY 2011
- Excluding any proceeds from future asset sales, net debt is expected to be approximately $22 billion by year end; deleveraging is a priority as the Company continues to target an investment grade credit rating
- Considering the challenging global economic conditions, and the Company’s priority to deleverage, ArcelorMittal’s Board of Directors proposes reducing the annual dividend payment to $0.20/share from 2013 (from $0.75/share in 2012)
- 2012 capex is expected to be approximately $4.5 billion; ArcelorMittal Mines Canada expansion to 24 million tonnes per year on track for ramp up during 1H 2013
Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal, commented, “The already fragile global economy was further impacted in the third quarter of 2012 by the slowdown in China. This resulted in very challenging operating conditions for ArcelorMittal, which are expected to continue in the fourth quarter. Against this backdrop, the Company is focused on delivering its plan of asset optimization, net debt reduction and productivity and efficiency improvements.”
