11/06/2015

ArcelorMittal, Luxembourg

Third quarter 2015 and nine months 2015 results

ArcelorMittal, the world’s leading integrated steel and mining company, announced results 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

  • 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.


ArcelorMittal, Luxembourg