ArcelorMittal, the world’s leading integrated steel and mining company, announced results for the three and nine month periods ended September 30, 2015.
- 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.