ArcelorMittal Reports Results for "Challenging" First Half of Year
08/02/2013 - As it reported its results for the first half of 2013, ArcelorMittal said the second half of the year should deliver a clear underlying improvement relative to the second half of 2012, which it believes marked the lowest point in the cycle.
ArcelorMittal, the world’s leading steel company, announced results for the three and six month periods ended 30 June 2013.
Highlights:
- Health and safety performance maintained in 2Q 2013 with a LTIF rate of 0.9x
- EBITDA of US$1.7 billion in 2Q 2013, representing a 19% underlying improvement compared to 1Q 2013
- Steel shipments of 21.3 million metric tons in 2Q 2013, an increase of 1.7% as compared to 1Q 2013
- 2Q 2013 own iron ore production of 15 million metric tons, up +3.8% y-o-y; 8.2 million metric tons shipped and reported at market price, flat y-o-y
- Net debt decreased to US$16.2 billion as of 30 June 2013, driven by improved cash flow from operations (US$2.4 billion) and M&A proceeds (US$0.3 billion)
- US$0.6 billion annualized management gains achieved during 1H 2013, in line with plan to achieve US$3 billion of cost improvement by the end of 2015
- Completion of AMMC capacity expansion from 16 million metric tons to 24 million metric tons; iron ore production to ramp-up during 2H 2013
Outlook and guidance:
- In line with our guidance framework, underlying profitability is still expected to improve in 2013, driven by three factors: a) a 1-2% increase in steel shipments; b) an approximate 20% increase in marketable iron ore shipments; and c) the realized benefits from Asset Optimization and Management Gains initiatives
- Nevertheless, due largely to lower than forecast apparent demand and lower than anticipated raw material prices, the Company now expects to report 2013 EBITDA greater than US$6.5 billion
- Due to an expected investment in working capital and the payment of the annual dividend, net debt is expected to increase in 2H 2013 to approximately US$17 billion; the US$15 billion medium term net debt target is unchanged
- 2013 capital expenditures are now expected to be approximately US$3.7 billion
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal chairman and CEO, said: “The operating environment in the first half continued to be challenging but we have delivered progress in a number of important areas. The benefits of our restructuring efforts — particularly in Europe — are evident; strong cash-flow performance has enabled us to reduce net debt to below our mid-year target; and the expansion of ArcelorMittal Mines Canada is largely complete and will ramp up during the second half.
“Although we have revised our full year guidance, the second half should deliver a clear underlying improvement relative to the second half of 2012, which we believe marked the lowest point in the cycle.”
