ArcelorMittal reports first quarter 2020 results
Luxembourg, May 7, 2020 - 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 results1 for
the three-month period ended March 31, 2020.
COVID-19 impacts
- Faced with a significant humanitarian challenge from the
COVID-19 pandemic, the Company’s first priority has been to take
all the necessary actions to safeguard the wellbeing of our people
and to provide support to the extent required in the communities in
which we operate
- Economic activity and steel market conditions have
significantly deteriorated since measures were introduced by
governments worldwide to contain the COVID-19 pandemic
- The Company has responded swiftly: aligning production to a
lower order book, and taking measures to reduce all costs in line
with exceptionally low capacity utilization levels
Highlights of 1Q
2020:
- Health and safety performance: LTIF rate2 of 1.01x in 1Q
2020
- Improved operating performance in 1Q 2020 reflects the positive
market developments prior to the escalation of the COVID-19
pandemic in March; operating loss of $0.4bn (vs. loss of $1.5bn in
4Q 2019); EBITDA increased to $1.0bn (4.5% higher than 4Q
2019)
- Net loss of $1.1bn in 1Q 2020 (adjusted net loss of $0.6bn,
excluding impairment and exceptional items)3
- Strong cash management during the quarter, including a working
capital investment limited to $0.1bn; gross debt of $13.8bn and a
marginal increase in net debt to $9.5bn (down $1.7bn vs 1Q
2019)
- Liquidity at the end of 1Q 2020 stood at $9.8bn (consisting of
cash and cash equivalents of $4.3bn and $5.5bn of available credit
lines5); further supplemented by a recently signed new $3bn credit
facility5
Outlook and
guidance:
- The Company has moved swiftly to secure its assets and match
production to the evolving orderbook, with steel shipments for 2Q
2020 expected within the range of 13.5Mt to 14.5Mt; the actions
taken to reduce all costs in line with reduced operating rates is
expected to yield a reduction in fixed costs10 by 25%-30% in 2Q
2020, essentially maintaining fixed costs per-tonne at the 1Q 2020
level; EBITDA for 2Q 2020 is expected to be within the range of
$0.4bn to $0.6bn
- Certain cash needs of the business are now expected to be
approximately $3.5bn in 2020 (vs. $4.5bn previous guidance), due to
lower planned capex (reduced to $2.4bn from $3.2bn previous
guidance) and lower taxes
- Annual working capital needs will be determined by the extent
market conditions recover in 2H 2020, but the Company still expects
to release the $1bn in working capital previously targeted
- The Company’s $2 billion asset portfolio optimization program
continues to progress. Given suitable and viable buyers have
expressed serious interest in certain assets, the Company remains
confident in completing the program by mid-2021
- While the impacts of COVID-19 have introduced unanticipated
challenges, the Company continues to target achievement of its $7bn
net debt objective in the near term
- Against the backdrop of significant cost savings measures being
taken across the business, the Board determined it both appropriate
and prudent to suspend dividend payments until such a time as the
operating environment normalizes.
Financial highlights (on the basis of
IFRS1):
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
14,844 |
|
15,514 |
|
16,634 |
|
19,279 |
|
19,188 |
|
Operating (loss) / income |
(353) |
|
(1,535) |
|
297 |
|
(158) |
|
769 |
|
Net (loss)/income attributable to equity holders of the parent |
(1,120) |
|
(1,882) |
|
(539) |
|
(447) |
|
414 |
|
Basic (loss)/earnings per common share (US$) |
(1.11) |
|
(1.86) |
|
(0.53) |
|
(0.44) |
|
0.41 |
|
|
|
|
|
|
|
Operating (loss) / income / tonne (US$/t) |
(18) |
|
(78) |
|
15 |
|
(7) |
|
35 |
|
EBITDA |
967 |
|
925 |
|
1,063 |
|
1,555 |
|
1,652 |
|
EBITDA/ tonne (US$/t) |
50 |
|
47 |
|
53 |
|
68 |
|
76 |
|
Steel-only EBITDA/ tonne (US$/t) |
34 |
|
32 |
|
34 |
|
43 |
|
56 |
|
|
|
|
|
|
|
Crude steel production (Mt) |
21.1 |
19.8 |
22.2 |
23.8 |
24.1 |
Steel shipments (Mt) |
19.5 |
19.7 |
20.2 |
22.8 |
21.8 |
Own iron ore production (Mt) |
14.4 |
14.8 |
13.6 |
14.6 |
14.1 |
Iron ore shipped at market price (Mt) |
8.6 |
9.6 |
8.4 |
9.9 |
9.2 |
Commenting, Mr. Lakshmi N. Mittal,
ArcelorMittal Chairman and CEO, said:
"The improved operating performance in the first quarter has
been considerably overshadowed by the COVID-19 crisis. Faced with a
significant humanitarian challenge, the Company’s first priority
has been to take all the necessary actions to safeguard the
wellbeing of our people and to provide support to the extent
required in the communities in which we operate. But we have also
moved decisively to protect the business in the face of the
completely unprecedented scenario we are facing where social and
economic lockdown has contributed to a significant decline in
demand. We moved swiftly to temporary idle furnaces, cutting
production across markets and reducing operating and capital costs
to match this environment. We have continued to meet remaining
customer demand from a reduced level of production and are very
thankful to our employees and stakeholders for their support in
enabling plants to keep running.
“There are still too many uncertainties to accurately predict
what the rest of the year holds. However, it seems likely that over
the course of this month countries will start to announce details
of their “exit” strategies. Whilst these are likely to be an
easing, not an immediate ending of lockdown, construction and
manufacturing are expected to be among the first sectors to be
permitted to re-start operations and indeed we are seeing signs of
customers re-starting production. Rigorous planning to ensure we
can meet customer demand whilst protecting the health and safety of
our people has been undertaken, leaning on the experience of our
plants which have already been on this journey.
“The remainder of this year will be challenging, but I am
confident that ArcelorMittal has the experience and inherent
resilience, to manage through these difficult times. As a
result of the hard work undertaken in recent years to strengthen
the balance sheet, we went into the COVID-19 crisis with the lowest
net debt since the creation of the Company, which is a matter of
considerable comfort.
“I am particularly grateful for the commitment shown by our
teams in these recent weeks. Crises do tend to bring out the best
in people and we have many examples of this, from our employees
working in our plants to produce steels for essential products, to
our facilities around the world looking to see how they can support
their local communities, to our research and development teams
harnessing their skills and expertise in ways quite unconnected
with steel-making, for example in the design of 3D printers and
ventilators. Together we will continue to navigate these
extraordinary times and ensure that ArcelorMittal is able to secure
the wellbeing of its people and its position as the world’s leading
steel Company.”
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Health and safety of the Company’s workforce is of paramount
importance. Following the spread of COVID-19 pandemic, where
possible, employees are working remotely and where assets continue
to operate, we are following the recommendations of local
governments as well as the World Health Organisation (‘WHO’). We
continue to ensure extensive monitoring, sanitation and social
distancing measures applied at all operations, alongside provision
of essential personal protective equipment.
Health and safety performance2 (inclusive of ArcelorMittal
Italia (previously known as Ilva)), based on own personnel and
contractors lost time injury frequency (LTIF) rate was 1.01x in the
first quarter of 2020 ("1Q 2020") as compared to 1.25x in fourth
quarter of 2019 ("4Q 2019") and 1.14x as of the first quarter of
2019 ("1Q 2019").
Excluding the impact of ArcelorMittal Italia, the LTIF was 0.72x
for 1Q 2020 as compared to 0.84x for 4Q 2019 and 0.66x for the
first quarter of 2019 (“1Q 2019”).
The Company’s efforts to improve its health and safety record
remain focused on both further reducing the rate of severe injuries
and preventing fatalities.
Own personnel and contractors -
Frequency rate
Lost
time injury frequency rate |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Mining |
0.79 |
|
1.27 |
|
1.53 |
|
0.64 |
|
0.38 |
|
NAFTA |
0.56 |
|
0.63 |
|
0.54 |
|
0.46 |
|
0.58 |
Brazil |
0.45 |
|
0.32 |
|
0.21 |
|
0.43 |
|
0.48 |
Europe |
1.04 |
|
1.06 |
|
1.18 |
|
1.00 |
|
0.85 |
ACIS |
0.82 |
|
0.83 |
|
0.59 |
|
0.58 |
|
0.75 |
Total Steel |
0.72 |
|
0.78 |
|
0.71 |
|
0.69 |
|
0.71 |
Total (Steel and Mining) excluding ArcelorMittal
Italia |
0.72 |
|
0.84 |
|
0.82 |
|
0.68 |
|
0.66 |
ArcelorMittal Italia |
7.93 |
|
10.61 |
|
13.45 |
|
13.73 |
|
11.05 |
Total (Steel and Mining) including ArcelorMittal
Italia |
1.01 |
|
1.25 |
|
1.36 |
|
1.26 |
|
1.14 |
Key sustainable development highlights
for 1Q 2020:
We are attempting to harness our skills and resources in a
useful and collaborative way to help address the challenges
presented by COVID-19. Specifically, we have focused our actions on
collaborating to address the severe lack of the required safety and
medical equipment for the public health effort, including 3D
printing face shields and ventilators in Europe and Brazil.
Our businesses across the world have now made cash and in-kind
donations to various community and public health initiatives. We
have also been utilizing our global network to help facilitate the
transfer of equipment to and from regions most impacted; and
coordinating private sector support to fight the pandemic in West
Africa.
- The Company is preparing a report on its 2030 target to reduce
CO2 in Europe by 30%, laying out the constituent elements of its
roadmap to 2030, including supportive policy frameworks to enable
the roll out of technology. A second Group wide Climate Action
report, with a new global CO2 target, is expected in 2H 2020.
- The Company’s 2019 sustainability performance was published in
the Factbook (the full Integrated Annual Review will be published
in mid-May). Highlight includes:
- In 2019 the Company avoided the emission of over 11 million
tonnes CO2 in the cement industry through the sale of 15 million
tonnes of blast furnace slag for use as cement – 19% more than in
2018. ArcelorMittal’s own CO2 footprint from its steelmaking
operations fell by over 4.4% year on year.
- The Company’s programme to certify 100% of its integrated sites
in Europe against the ResponsibleSteel™ site standard started in 1Q
2020, and has been subsequently delayed due to COVID-19.
Analysis of results for 1Q 2020 versus
4Q 2019 and 1Q 2019
Total steel shipments in 1Q 2020 were 1.2% lower at 19.5Mt as
compared with 19.7Mt for 4Q 2019 primarily due to lower steel
shipments in Brazil (-13.5%) and ACIS (-12.4%), offset in part by
an improvement in NAFTA (+10.1%) whilst Europe remained broadly
stable. Total steel shipments in 1Q 2020 were 10.7% lower as
compared with 21.8Mt for 1Q 2019. Excluding the impact of the
remedy asset sales related to the ArcelorMittal Italia acquisition
(completed June 30, 2019) steel shipments were 6.5% lower as
compared to 1Q 2019.
During the latter part of 1Q 2020, the global escalation of the
COVID-19 pandemic and subsequent measures introduced by governments
worldwide to contain it has negatively impacted economic activity
and industrial supply chains in many parts of the world.
Consequently, the Company is experiencing a significant decline in
industrial activity in all the geographic markets in which it
operates. The Company has responded swiftly by significantly
reducing production (including temporarily idling steelmaking and
finishing assets) globally in alignment with reduced demand and
government requirements. As a result, the Company expects a
significant negative impact on volumes until industrial activity
normalizes.
Sales in 1Q 2020 were $14.8 billion as compared to $15.5 billion
for 4Q 2019 and $19.2 billion for 1Q 2019. Sales in 1Q 2020 were
4.3% lower as compared to 4Q 2019 primarily due to lower steel
shipments (-1.2%) due in part to COVID-19 impacts, and lower
market-priced iron ore shipments (-11.0%). Sales in 1Q 2020 were
22.6% lower as compared to 1Q 2019 primarily due to lower average
steel selling prices (-13.8%), lower steel shipments (-10.7%) due
in part to COVID-19 impacts, and lower market-priced iron ore
shipments (-6.2%) offset in part by higher seaborne iron ore
reference prices (+9.1%).
Depreciation for 1Q 2020 was lower at $771 million as compared
to $802 million for 4Q 2019 and higher than $733 million in 1Q
2019. FY 2020 depreciation is expected to be approximately $3.0
billion (based on current exchange rates).Impairment charges12 for
1Q 2020 were $92 million and relate to the permanent closure of the
coke plant in Florange (France), at the end of April 2020.
Impairment charges for 4Q 2019 were $830 million and related to
impairment of the fixed assets of ArcelorMittal USA ($0.7 billion)
and in South Africa ($0.1 billion). Impairment charges for 1Q 2019
were $150 million related to the remedy asset sales for the
ArcelorMittal Italia acquisition.
Exceptional items of $457 million for 1Q 2020 primarily include
inventory related charges in NAFTA and Europe due to a weaker steel
pricing outlook driven by COVID-19 impacts. Exceptional items of
$828 million for 4Q 2019, primarily include inventory related
charges in NAFTA and Europe following a period of exceptionally
weak steel pricing. Exceptional items for 1Q 2019 were nil.
Operating loss for 1Q 2020 was $353 million as compared to
$1,535 million in 4Q 2019 and an operating income of $769 million
in 1Q 2019. Operating results for 1Q 2020 and 4Q 2019 were impacted
by impairment charges and exceptional items as discussed above.
Income from associates, joint ventures and other investments for
1Q 2020 was $142 million as compared to $20 million for 4Q 2019 and
$208 million in 1Q 2019. 1Q 2020 income was positively impacted by
income from AMNS India9. 1Q 2019 was positively impacted by the
dividend declared by Erdemir of $93 million.
Net interest expense in 1Q 2020 decreased to $115 million as
compared to $140 million in 4Q 2019 and $161 million in 1Q 2019.
Interest costs decrease in 1Q 2020 was primarily due to savings
after bond repayments at the end of 4Q 2019.
Foreign exchange and other net financing losses in 1Q 2020 were
$451 million as compared to $117 million for 4Q 2019 and $231
million in 1Q 2019. Foreign exchange loss for 1Q 2020 was $111
million as compared to foreign exchange gain of $130 million and
loss of $48 million, in 4Q 2019 and 1Q 2019, respectively. 1Q 2020
includes non-cash mark-to-market losses of $118 million related to
the mandatory convertible bonds call option following the market
price decrease of the underlying share; such losses amounted to $52
million in 4Q 2019 and $6 million in 1Q 2019. 1Q 2020 also includes
early bond redemption premium expenses of $66 million.
ArcelorMittal recorded an income tax expense of $340 million in
1Q 2020 as compared to $125 million for 4Q 2019 and $135 million
for 1Q 2019. Income tax expense in 1Q 2020 includes deferred tax
expense of $178 million.
ArcelorMittal recorded a net loss for 1Q 2020 of $1.1 billion
(or $1.11 basic loss per common share), as compared to a net loss
for 4Q 2019 of $1.9 billion (or $1.86 basic loss per common share),
and a net income for 1Q 2019 of $0.4 billion (or $0.41 basic
earnings per common share).
Analysis of segment
operations
NAFTA
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
4,304 |
|
4,020 |
|
4,395 |
|
5,055 |
|
5,085 |
|
Operating (loss) / income |
(120) |
|
(912) |
|
(24) |
|
(539) |
|
216 |
|
Depreciation |
(126) |
|
(152) |
|
(147) |
|
(137) |
|
(134) |
|
Impairment |
— |
|
(700) |
|
— |
|
(600) |
|
— |
|
Exceptional items |
(241) |
|
(200) |
|
— |
|
— |
|
— |
|
EBITDA |
247 |
|
140 |
|
123 |
|
198 |
|
350 |
|
Crude steel production (kt) |
5,503 |
|
5,261 |
|
5,658 |
|
5,590 |
|
5,388 |
|
Steel shipments (kt) |
5,536 |
|
5,029 |
|
5,135 |
|
5,438 |
|
5,319 |
|
Average steel selling price (US$/t) |
715 |
|
731 |
|
792 |
|
836 |
|
874 |
|
NAFTA segment crude steel production increased by 4.6% to 5.5Mt
in 1Q 2020 as compared to 5.3Mt in 4Q 2019, partly due to recovery
following planned outages both in flat and long product operations
during 4Q 2019 due to weak demand.
Steel shipments in 1Q 2020 increased by 10.1% to 5.5Mt as
compared to 5.0Mt in 4Q 2019, primarily due to a 12.2% increase in
flat steel shipments following the end of destocking which had
suppressed demand in the prior quarter. Steel shipments started to
decline towards the second half of March 2020 due to weaker demand
driven by the COVID-19 pandemic.
Sales in 1Q 2020 increased by 7.1% to $4.3 billion as compared
to $4.0 billion in 4Q 2019, primarily due to a 10.1% increase in
steel shipments offset in part by a decline in average steel
selling prices (with flat and long products down 2.6% and 2.5%,
respectively).
Exceptional items for 1Q 2020 of $241 million primarily include
inventory related charges due to a weaker steel pricing outlook
driven by COVID-19 impacts. Exceptional items of $200 million in 4Q
2019 primarily included inventory related charges following a
period of exceptionally weak steel pricing.
Operating loss in 1Q 2020 was $120 million as compared to a loss
of $912 million in 4Q 2019 and an operating income of $216 million
in 1Q 2019. Operating results for 1Q 2020 and 4Q 2019 were impacted
by exceptional items noted above, and operating results for 4Q 2019
were also impacted by impairment charges related to a further
impairment of the fixed assets of ArcelorMittal USA.
Despite the negative impact of COVID-19, EBITDA in 1Q 2020 of
$247 million was higher as compared to $140 million in 4Q 2019
primarily driven by the positive impact of higher steel shipment
volumes offset in part by a negative price-cost effect. EBITDA in
1Q 2020 decreased by 29.5% as compared to $350 million in 1Q 2019
primarily due to negative price-cost effect offset in part by
higher steel shipments.
The escalation of the COVID-19 pandemic during the latter part
of 1Q 2020 has impacted ArcelorMittal's key end markets in the US
and Canada. The Company has responded immediately by significantly
adapting its capacity. The Company has to date announced the safe
and orderly temporary blow down of blast furnace No.3 at
ArcelorMittal Dofasco, Canada, blast furnace No.6 at ArcelorMittal
Cleveland and blast furnace No.4 at Indiana Harbor in the United
States with the necessary precautions taken to preserve the assets
for future production.
In order to mitigate in part the effect of weaker demand on
production levels, the Company is temporarily reducing fixed costs
(including alignment of the workforce to demand) and implementing
other cost saving measures.
Brazil
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
1,592 |
|
1,902 |
|
1,929 |
|
2,126 |
|
2,156 |
|
Operating income |
150 |
|
177 |
|
196 |
|
234 |
|
239 |
|
Depreciation |
(69) |
|
(63) |
|
(62) |
|
(79) |
|
(70) |
|
Exceptional items |
— |
|
— |
|
— |
|
— |
|
— |
|
EBITDA |
219 |
|
240 |
|
258 |
|
313 |
|
309 |
|
Crude steel production (kt) |
2,679 |
|
2,489 |
|
2,669 |
|
2,830 |
|
3,013 |
|
Steel shipments (kt) |
2,351 |
|
2,717 |
|
2,810 |
|
2,785 |
|
2,880 |
|
Average steel selling price (US$/t) |
642 |
|
628 |
|
676 |
|
705 |
|
704 |
|
Brazil segment crude steel production increased by 7.6% to 2.7Mt
in 1Q 2020 as compared to 2.5Mt for 4Q 2019, which had been
impacted by planned maintenance in the Long products business.
Steel shipments in 1Q 2020 decreased by 13.5% to 2.4Mt as
compared to 2.7Mt in 4Q 2019, primarily due to seasonality and
lower flat product exports. Overall long products shipments
decreased by 7.7% while flat products declined by 17.7%.
Sales in 1Q 2020 declined by 16.3% to $1.6 billion as compared
to $1.9 billion in 4Q 2019. Sales in 1Q 2020 were impacted by 13.5%
lower steel shipments offset in part by 2.2% higher average steel
selling prices.
Operating income in 1Q 2020 declined to $150 million as compared
to $177 million in 4Q 2019 and $239 million in 1Q 2019.
EBITDA in 1Q 2020 decreased by 8.8% to $219 million as compared
to $240 million in 4Q 2019 primarily due to lower steel shipments
(including initial COVID-19 impacts) offset in part by a positive
price-cost effect. EBITDA in 1Q 2020 was 29.2% lower as compared to
$309 million in 1Q 2019 primarily due to lower steel shipment
volumes (-18.4%).
The effects of the COVID-19 pandemic and government response and
containment efforts have been felt in Latin America regions later
than in some other regions. Nevertheless, end markets and in
particular automotive have now been increasingly impacted. The
Company is in the process of reducing production further with the
idling of ArcelorMittal Tubarão's blast furnace #3 from April 21,
2020, together with production curtailments in Argentina and in
long product capacity in Brazil, to match demand levels.
In order to mitigate in part the effect of weaker demand on the
production levels, the Company is temporarily reducing fixed costs
(including alignment of the workforce to demand) and implementing
other cost saving measures.
Europe
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
7,654 |
|
8,035 |
|
8,796 |
|
10,396 |
|
10,494 |
|
Operating (loss) / income |
(426) |
|
(649) |
|
(168) |
|
(301) |
|
11 |
|
Depreciation |
(347) |
|
(323) |
|
(311) |
|
(313) |
|
(309) |
|
Impairment charges |
(92) |
|
(28) |
|
— |
|
(347) |
|
(150) |
|
Exceptional items |
(191) |
|
(456) |
|
— |
|
— |
|
— |
|
EBITDA |
204 |
|
158 |
|
143 |
|
359 |
|
470 |
|
Crude steel production (kt) |
9,912 |
|
9,030 |
|
10,432 |
|
12,079 |
|
12,372 |
|
Steel shipments (kt) |
9,300 |
|
9,290 |
|
9,698 |
|
11,811 |
|
11,553 |
|
Average steel selling price (US$/t) |
638 |
|
654 |
|
686 |
|
704 |
|
729 |
|
Europe segment crude steel production increased by 9.8% to 9.9Mt
in 1Q 2020 as compared to 9.0Mt in 4Q 2019 with increases in both
long and flat products as production began to normalize following
destock-driven curtailment in 4Q 2019. Europe segment crude steel
production decreased by 19.9% to 9.9Mt in 1Q 2020 as compared to
12.4Mt in 1Q 2019 (12.2% lower excluding the impact of remedy
assets associated with the ArcelorMittal Italia acquisition).
Steel shipments in 1Q 2020 remained stable at 9.3Mt as compared
to 4Q 2019 primarily driven by higher flat steel shipments (+2.9%)
offset by lower long products shipments (-6.6%). Steel shipments
were 19.5% lower in 1Q 2020 as compared to 1Q 2019 (12.0% lower
excluding the impact of remedy assets associated with the
ArcelorMittal Italia acquisition). Steel shipments in Europe
started to decline in the latter part of March due to the COVID-19
containment measures implemented in the various countries.
Sales in 1Q 2020 were $7.7 billion, 4.7% lower as compared to
$8.0 billion in 4Q 2019, with average steel selling prices 2.3%
lower, primarily due to lower flat products prices (down 3.1%).
The coke plant in Florange, France, was closed at the end of
April 2020, in order to reduce costs. As a result, impairment
charges of $92 million were booked in 1Q 2020. Impairment charges
for 4Q 2019 were $28 million. Impairment charges for 1Q 2019 were
$150 million related to the remedy asset sales for the
ArcelorMittal Italia acquisition.
Exceptional items for 1Q 2020 of $191 million primarily include
inventory related charges due to a weaker steel pricing outlook
driven by COVID-19 impacts. Exceptional items for 4Q 2019 of $456
million primarily included inventory related charges following a
period of exceptionally weak steel pricing. Exceptional charges for
1Q 2019 were nil.
Operating loss in 1Q 2020 was $426 million as compared to a loss
of $649 million for 4Q 2019 and an operating income of $11 million
in 1Q 2019. Operating results for 1Q 2020, 4Q 2019 and 1Q 2019 were
impacted by impairment charges and exceptional items as discussed
above.
Despite the effects COVID-19, EBITDA in 1Q 2020 of $204 million
was 29.5% higher as compared to $158 million in 4Q 2019. This was
largely due to a positive sales mix (higher flat products shipments
and lower long products shipments). EBITDA in 1Q 2020 decreased by
56.5% as compared to $470 million in 1Q 2019 primarily due to 19.5%
lower steel shipments (12.0% lower excluding the impact of the
remedy asset sales related to the ArcelorMittal Italia
acquisition).
The COVID-19 pandemic containment measures began impacting
European industrial activity in mid-March. The Company first
announced measures on March 19, 2020 to reduce production and the
temporary idling of steelmaking and finishing assets across its
European operations. Production reduction measures have been
undertaken in Italy, France, Spain, Germany, Belgium and
Poland.
In order to mitigate in part the effect of weaker demand on the
production levels, the Company is temporarily reducing fixed costs
(including alignment of the workforce to demand) and implementing
other cost saving measures.
ACIS
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
1,446 |
|
1,632 |
|
1,654 |
|
1,906 |
|
1,645 |
|
Operating (loss) / income |
(60) |
|
(238) |
|
35 |
|
114 |
|
64 |
|
Depreciation |
(86) |
|
(105) |
|
(93) |
|
(85) |
|
(81) |
|
Impairment |
— |
|
(102) |
|
— |
|
— |
|
— |
|
Exceptional items |
(21) |
|
(76) |
|
— |
|
— |
|
— |
|
EBITDA |
47 |
|
45 |
|
128 |
|
199 |
|
145 |
|
Crude steel production (kt) |
2,998 |
|
2,973 |
|
3,450 |
|
3,252 |
|
3,323 |
|
Steel shipments (kt) |
2,614 |
|
2,985 |
|
2,718 |
|
3,182 |
|
2,662 |
|
Average steel selling price (US$/t) |
471 |
|
460 |
|
532 |
|
536 |
|
541 |
|
ACIS segment crude steel production in 1Q 2020 remained broadly
stable at 3.0Mt as compared to 4Q 2019 primarily due to lower
production in Kazakhstan (due to weather related disruptions)
offset by improved volumes in Ukraine and South Africa.Steel
shipments in 1Q 2020 decreased by 12.4% to 2.6Mt as compared to
3.0Mt as at 4Q 2019, mainly due to the decline of shipments in
Ukraine (4Q 2019 was positively impacted by timing of shipments
postponed from 3Q 2019).
Sales in 1Q 2020 decreased by 11.4% to $1.4 billion as compared
to $1.6 billion in 4Q 2019 primarily due to lower steel shipments
(-12.4%) offset in part by higher average steel selling prices
(+2.5%).
The 4Q 2019 results included impairment charges of $0.1 billion
related to the Newcastle steel works in South Africa as well as $76
million of exceptional items related to South Africa including the
closure costs of Saldanha and retrenchment costs related to the
Section 189 process.
Operating loss in 1Q 2020 was $60 million as compared to loss of
$238 million in 4Q 2019 (including the impairment charges and
exceptional items as discussed above) and an operating income of
$64 million in 1Q 2019.
EBITDA was broadly stable at $47 million in 1Q 2020 as compared
to $45 million in 4Q 2019 primarily due to a positive price-cost
effect offset by lower steel shipment volumes (due in small part to
COVID-19 impact). EBITDA in 1Q 2020 was lower as compared to $145
million in 1Q 2019, primarily due to negative price-cost effect and
COVID-19 impact.
The direct COVID-19 impact in the CIS region was limited in 1Q
2020 although more stringent lockdown measures have since been
implemented, and production has since been reduced in the Ukraine
and Kazakhstan due to demand weakness. ArcelorMittal South Africa
has taken several steps (including significant production cuts
across all operations) to support the country's lockdown (i.e.
restrictions on activity limited only to essential services) that
has since ended on April 30, 2020, which required the closure of
all offices and operations across the country, except essential
operational staff required for care and maintenance to avoid damage
to plant and equipment. Since May 1, 2020 South Africa is operating
within a partial lockdown environment which will be lifted in
phases. ArcelorMittal will adopt a phased response to restarting
operations and only then ramping up production as the demand for
steel returns.
ArcelorMittal South Africa has implemented several cost
reduction measures in response. These actions follow the critical
steps already taken during 2019 to ensure the sustainability of
ArcelorMittal South Africa. Similarly, in the CIS, in order to
mitigate in part, the effect of weaker demand on production levels,
the Company is temporarily reducing fixed costs (including
alignment of the workforce to demand) and implementing other cost
saving measures.
Mining
(USDm) unless otherwise shown |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Sales |
990 |
|
1,105 |
|
1,182 |
|
1,423 |
|
1,127 |
|
Operating income |
168 |
|
185 |
|
260 |
|
457 |
|
313 |
|
Depreciation |
(129) |
|
(116) |
|
(112) |
|
(113) |
|
(107) |
|
EBITDA |
297 |
|
301 |
|
372 |
|
570 |
|
420 |
|
|
|
|
|
|
|
Own iron ore production (Mt) |
14.4 |
|
14.8 |
|
13.6 |
|
14.6 |
|
14.1 |
|
Iron ore shipped externally and internally at market price (a)
(Mt) |
8.6 |
|
9.6 |
|
8.4 |
|
9.9 |
|
9.2 |
|
Iron ore shipment - cost plus basis (Mt) |
4.8 |
|
5.8 |
|
6.2 |
|
5.6 |
|
4.6 |
|
Own coal production (Mt) |
1.3 |
|
1.4 |
|
1.4 |
|
1.5 |
|
1.2 |
|
Coal shipped externally and internally at market price (a)
(Mt) |
0.8 |
|
0.7 |
|
0.7 |
|
0.7 |
|
0.7 |
|
Coal shipment - cost plus basis (Mt) |
0.6 |
|
0.7 |
|
0.8 |
|
0.7 |
|
0.7 |
|
(a) Iron ore and coal shipments of market-priced based materials
include the Company’s own mines and share of production at other
mines
Own iron ore production in 1Q 2020 decreased by 3.0% to 14.4Mt
as compared to 14.8Mt in 4Q 2019. The lower production was due to
seasonal factors, unplanned maintenance and slowdown related to
COVID-19 restrictions at ArcelorMittal Mines Canada4 (AMMC), offset
in part by improved production at ArcelorMittal Liberia. Own iron
ore production in 1Q 2020 increased by 2.3% as compared to 1Q 2019
primarily due to higher production in Brazil (mainly due to
temporary suspension of Serra Azul operation in 1Q 2019 post the
Brumadinho incident) and Kazakhstan offset in part by lower AMMC
production as explained above.
Market-priced iron ore shipments in 1Q 2020 decreased by 11.0%
to 8.6Mt as compared to 9.6Mt in 4Q 2019, primarily driven by lower
shipments in AMMC (due to seasonality, unplanned maintenance and
COVID-19 pandemic restrictions). Market-priced iron ore shipments
in 1Q 2020 were 6.2% lower as compared to 1Q 2019 driven by lower
shipments in AMMC and Liberia offset by higher shipments in Brazil
and Ukraine.
Own coal production in 1Q 2020 of 1.3Mt decreased by 2.6% as
compared to 4Q 2019 primarily due to lower production at Princeton
(US) and Temirtau (Kazakhstan). Own coal production in 1Q 2020
increased by 8.9% to 1.3Mt as compared to 1.2Mt in 1Q 2019
primarily due to higher production at Temirtau (Kazakhstan).
Market-priced coal shipments in 1Q 2020 improved to 0.8Mt as
compared to 0.7Mt in 4Q 2019 and 1Q 2019.
Operating income in 1Q 2020 decreased by 8.8% to $168 million as
compared to $185 million in 4Q 2019 and decreased by 46.2% as
compared to $313 million in 1Q 2019.
EBITDA in 1Q 2020 was broadly stable at $297 million as compared
to $301 million in 4Q 2019, as the impact of lower market-priced
iron ore shipments (-11.0%) in part due to COVID-19 impact on the
market was largely offset by lower freight costs. EBITDA in 1Q 2020
was 29.2% lower as compared to $420 million in 1Q 2019, primarily
due to lower market-priced iron ore shipments (-6.2%), lower coking
coal reference prices and significantly lower iron ore pellet
premia offset in part by higher seaborne iron ore reference prices
(+9.1%).
The impact of the COVID 19 pandemic on the group's mining
operations has to date been largely at ArcelorMittal Mines Canada.
A directive from the Québec Government restricted mining activities
to a minimum level in the province of Québec, Canada, from March
24, 2020 until May 3, 2020. ArcelorMittal Mining Canada has now
resumed normal operations. Nevertheless, it is not expected to be
possible to recover all the volumes that have been impacted
(including volume loss due to unplanned maintenance) and
accordingly market-priced iron ore shipments for FY 2020 are now
expected to be 5-10% lower as compared to FY 2019 (from previous
guidance of stable year on year).
Liquidity and Capital
Resources
For 1Q 2020 net cash provided by operating activities was $594
million as compared to $2,932 million in 4Q 2019 and $971 million
in 1Q 2019. Net cash provided by operating activities in 1Q 2020
includes a small working capital investment of $109 million,
significantly reduced compared to 1Q 2019 due to cash conservation
measures taken plus a reduction in activity levels compared to a
working capital release of $2.6 billion in 4Q 2019 and a working
capital investment of $553 million in 1Q 2019.
Net cash used in investing activities during 1Q 2020 was $755
million as compared to $1,751 million during 4Q 2019 and $693
million in 1Q 2019. Capex of $850 million in 1Q 2020 compares to
$815 million in 4Q 2019 and $947 million in 1Q 2019. As described
previously, the Company has responded to the COVID-19 impact with
actions taken to reduce production and is adapting its capex plans
to the operating environment. All non-essential capex has been
suspended, while the Mexico hot strip mill project, the agreed
Italian projects and certain projects to reduce CO2 emissions
continue.
Maintenance capex spend is expected to be lower to match the
reduced operating rates. Consequently, the previous FY 2020 capex
guidance of approximately $3.2 billion has now been reduced to $2.4
billion.
Net cash provided by other investing activities in 1Q 2020 of
$95 million includes $127 million from the sale of the 50% stake in
Global Chartering Limited (GCL)8 offset in part by the revised
quarterly lease payment under the amended ArcelorMittal Italia
agreement signed in March 2020. Net cash used in other investing
activities in 4Q 2019 of $936 million primarily included the final
$0.6 billion equity contribution to the AMNS India JV and $0.4
billion cash outflow upon the close out of the Indian rupee rolling
hedge entered into in connection with the acquisition of ESIL7.
Net cash used in financing activities in 1Q 2020 was $386
million as compared to net cash provided by financing activities in
4Q 2019 of $19 million and net cash used in financing activities in
1Q 2019 of $344 million. Net cash used in financing activities in
1Q 2020 includes a net outflow primarily related to the make whole
redemption of the remaining outstanding amount ($659 million) of
its 6.250% Notes due February 25, 2022.
In 4Q 2019, net cash provided by financing activities included
net inflow of $126 million primarily related to the bond issuances
of €1.5 billion ($1,640 million), offset by debt repurchases via
tender offer and a make whole redemption of bond. In 1Q 2019, net
outflow of debt repayments and issuances of $136 million included
$1 billion repayment of amounts borrowed in connection with the
purchase of the Uttam Galva and KSS Petron debts, $0.9 billion
repayment of the €750 million 5-year, 3% bond at maturity; offset
in part by $1.6 billion cash received from two new bond issuances
and $0.2 billion of commercial paper issuance.During 1Q 2020, the
Company paid dividends of $103 million mainly to minority
shareholders of ArcelorMittal Mines Canada (AMMC) as compared to
$21 million in 4Q 2019 mainly paid to the minority shareholders in
Bekaert (Brazil). During 1Q 2019, the Company paid dividends of $46
million to minority shareholders in AMMC (Canada).
Outflows from lease payments and other financing activities
(net) were $59 million for 1Q 2020, $86 million for 4Q 2019 and $72
million in 1Q 2019.
As of March 31, 2020, the Company’s cash and cash equivalents
amounted to $4.3 billion as compared to $5.0 billion as of December
31, 2019 and $2.2 billion as of March 31, 2019. Gross debt declined
to $13.8 billion as of March 31, 2020, as compared to $14.3 billion
as of December 31, 2019 and increased as compared to $13.4 billion
as of March 31, 2019. As of March 31, 2020, net debt increased
marginally to $9.5 billion as compared to $9.3 billion as of
December 31, 2019.
As of March 31, 2020, the Company had liquidity of $9.8 billion,
consisting of cash and cash equivalents of $4.3 billion and $5.5
billion of available credit lines5. Confirming the continued strong
support of its key relationship banks, on May 5, 2020 ArcelorMittal
and a syndicate of banks signed a new $3 billion credit facility5
further supplementing its liquidity. Both the $5.5 billion and $3.0
billion credit facilities contain a financial covenant not to
exceed 4.25x Net debt / LTM EBITDA. As of March 31, 2020, the
average debt maturity was 5.2 years.
Key recent developments
- On May 5, 2020, ArcelorMittal and a syndicate of banks signed a
credit facility with tranches of $0.7 billion and €2.1 billion (the
“New Credit Facility”). The Credit Facility further enhances the
Company's already strong liquidity position of $9.8 billion as of
March 31, 2020, including a $5.5 billion revolving credit facility,
which remains undrawn and is available until December 2024. The New
Credit Facility has a maturity of 12 months and can be used for
general corporate purposes. While the Company has no immediate need
to draw on this New Credit Facility, it provides additional
financial flexibility in the current extraordinary circumstances.
- On March 17, 2020, AMNS Luxembourg Holding S.A. (“AMNS”), the
parent company of the AMNS India joint venture in partnership with
Nippon Steel Corporation (“NSC”), entered into a $5.146 billion
ten-year term loan agreement with Japan Bank for International
Cooperation (“JBIC”) and MUFG BANK, LTD., SUMITOMO MITSUI BANKING
CORPORATION, MIZUHO BANK EUROPE N.V., and SUMITOMO MITSUI TRUST
BANK, LIMITED (LONDON BRANCH). The proceeds of the loan have been
used to refinance in full the amounts borrowed by AMNS in
connection with the acquisition of ArcelorMittal Nippon Steel India
Limited (formerly known as Essar Steel India Limited), including
the amounts borrowed under the $7 billion bridge term facilities
agreement guaranteed by ArcelorMittal. ArcelorMittal is the
guarantor of the debt in proportion to its ownership interest
(60%).
- On March 9, 2020, ArcelorMittal redeemed all of the outstanding
$659 million of its 6.250% Notes due February 25, 2022 for a total
aggregate purchase price including accrued interest and premium on
early repayment of $725 million.
- On March 4, 2020, ArcelorMittal announced that AM InvestCo and
the Ilva Commissioners had signed an amendment (the ‘Amendment
Agreement’) to the original lease and purchase agreement for Ilva.
The Amendment Agreement outlines the terms for a significant
investment by Italian state-sponsored entities into AM InvestCo,
thereby forming the basis for an important new partnership between
ArcelorMittal and the Italian government. The equity investment by
the Italian Government in Ilva, to be captured in an agreement (the
‘Investment Agreement’) to be executed by November 30, 2020, will
be at least equal to AM InvestCo’s remaining liabilities against
the original purchase price for Ilva. The Amendment Agreement is
structured around a new industrial plan for Ilva, which involves
investment in lower-carbon steelmaking technologies. In the event
that the Investment Agreement is not executed by November 30, 2020,
AM InvestCo has a withdrawal right, subject to an agreed payment.
Final closing of the lease and purchase agreement is now scheduled
by May 2022, subject to various conditions precedent.
- On March 3, 2020, ArcelorMittal published its annual report for
the year ended December 31, 2019. The report has been filed with
the electronic database of the Luxembourg Stock Exchange
(www.bourse.lu) and is available on corporate.arcelormittal.com
under "Investors > Financial reports > Annual reports".
- On March 3, 2020, ArcelorMittal filed its Annual Report for
2019 on Form 20-F with the U.S. Securities and Exchange Commission
(SEC). The report is now available on ArcelorMittal's website.
ArcelorMittal will send a hard copy of the Annual Report for 2019
on Form 20-F, which includes the audited financial statements, to
shareholders free of charge upon request.
Dividend
Against the backdrop of significant cost savings measures being
taken across the business, the Board determined it both appropriate
and prudent to suspend dividend payments until such a time as the
operating environment normalizes. As a result, no dividend from
2019 results will be proposed to shareholders at the Annual General
Meeting now scheduled in June 2020.
Outlook and guidance
The Company has moved swiftly to secure its assets and match
production to the evolving orderbook, with steel shipments for 2Q
2020 expected to be within the range of 13.5Mt to 14.5Mt; the
actions taken to reduce all costs in line with reduced operating
rates are expected to yield a reduction in fixed costs10 by 25%-30%
in 2Q 2020 as compared to 1Q 2020, essentially maintaining fixed
costs per-tonne at the 1Q 2020 level; as a result EBITDA for 2Q
2020 is expected to be within the range of $0.4 billion to $0.6
billion.
Given this uncertainty, the Company has withdrawn its forecasts
for apparent steel consumption and consequently expects steel
shipments in 2020 to be below the 2019 level.
The Company will continue to make ongoing decisions to adjust
production in various geographies in accordance with the level of
steel demand and government requirements.
The Company expects certain cash needs of the business
(including capex, interest, cash taxes, pensions and certain other
cash costs but excluding working capital movements) to total $3.5
billion in 2020 versus the $4.5 billion previous guidance. This
includes a reduction of FY 2020 capex to $2.4 billion (down from
the previous guidance of $3.2 billion). Interest expense in 2020 is
expected to remain at $0.5 billion while cash taxes, pensions and
other cash costs are expected to be $0.6 billion (versus previous
guidance of $0.8 billion).
Whilst it cannot at this stage provide specific guidance for
working capital needs in 2020 (due to the fact that it will be
determined by the extent market conditions recover in 2H 2020) the
Company still expects to release the $1 billion in working capital
as previously targeted.
While the impacts of COVID-19 have introduced unanticipated
challenges, the achievement of the Company's $7 billion net debt
objective remains a key near term target.
Despite the challenges caused by COVID-19, the Company’s $2
billion asset portfolio optimization program continues to progress.
Given that suitable and viable buyers have expressed serious
interest in certain assets, the Company remains confident in
completing the program by mid-2021.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
In millions of U.S. dollars |
Mar 31, 2020 |
Dec 31, 2019 |
Mar 31, 2019 |
ASSETS |
|
|
|
Cash and
cash equivalents |
4,298 |
|
4,995 |
|
2,246 |
|
Trade
accounts receivable and other |
3,456 |
|
3,569 |
|
5,131 |
|
Inventories |
15,626 |
|
17,296 |
|
20,583 |
|
Prepaid
expenses and other current assets |
2,551 |
|
2,756 |
|
3,000 |
|
Assets held
for sale6 |
— |
|
— |
|
1,950 |
|
Total Current Assets |
25,931 |
|
28,616 |
|
32,910 |
|
|
|
|
|
Goodwill and
intangible assets |
4,911 |
|
5,432 |
|
5,549 |
|
Property,
plant and equipment |
33,522 |
|
36,231 |
|
36,647 |
|
Investments
in associates and joint ventures |
6,334 |
|
6,529 |
|
5,000 |
|
Deferred tax
assets |
8,669 |
|
8,680 |
|
8,318 |
|
Other
assets |
1,961 |
|
2,420 |
|
4,236 |
|
Total Assets |
81,328 |
|
87,908 |
|
92,660 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
Short-term
debt and current portion of long-term debt |
3,147 |
|
2,869 |
|
2,739 |
|
Trade
accounts payable and other |
11,968 |
|
12,614 |
|
14,232 |
|
Accrued
expenses and other current liabilities |
5,645 |
|
5,804 |
|
5,699 |
|
Liabilities
held for sale6 |
— |
|
— |
|
828 |
|
Total Current Liabilities |
20,760 |
|
21,287 |
|
23,498 |
|
|
|
|
|
Long-term
debt, net of current portion |
10,650 |
|
11,471 |
|
10,591 |
|
Deferred tax
liabilities |
2,075 |
|
2,331 |
|
2,337 |
|
Other
long-term liabilities |
11,820 |
|
12,336 |
|
11,945 |
|
Total Liabilities |
45,305 |
|
47,425 |
|
48,371 |
|
|
|
|
|
Equity
attributable to the equity holders of the parent |
34,249 |
|
38,521 |
|
42,286 |
|
Non-controlling interests |
1,774 |
|
1,962 |
|
2,003 |
|
Total Equity |
36,023 |
|
40,483 |
|
44,289 |
|
Total Liabilities and Shareholders’ Equity |
81,328 |
|
87,908 |
|
92,660 |
|
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
Three months ended |
In
millions of U.S. dollars unless otherwise shown |
Mar 31, 2020 |
Dec 31, 2019 |
Sept 30, 2019 |
Jun 30, 2019 |
Mar 31, 2019 |
Sales |
14,844 |
|
15,514 |
|
16,634 |
|
19,279 |
|
19,188 |
|
Depreciation
(B) |
(771) |
|
(802) |
|
(766) |
|
(766) |
|
(733) |
|
Impairment
charges (B) |
(92) |
|
(830) |
|
— |
|
(947) |
|
(150) |
|
Exceptional
items3 (B) |
(457) |
|
(828) |
|
— |
|
— |
|
— |
|
Operating (loss) / income (A) |
(353) |
|
(1,535) |
|
297 |
|
(158) |
|
769 |
|
Operating
margin % |
(2.4) |
% |
(9.9) |
% |
1.8 |
% |
(0.8) |
% |
4.0 |
% |
|
|
|
|
|
|
Income from
associates, joint ventures and other investments |
142 |
|
20 |
|
25 |
|
94 |
|
208 |
|
Net interest
expense |
(115) |
|
(140) |
|
(152) |
|
(154) |
|
(161) |
|
Foreign
exchange and other net financing loss |
(451) |
|
(117) |
|
(524) |
|
(173) |
|
(231) |
|
(Loss) / income before taxes and non-controlling
interests |
(777) |
|
(1,772) |
|
(354) |
|
(391) |
|
585 |
|
Current tax expense |
(162) |
|
(260) |
|
(121) |
|
(225) |
|
(180) |
|
Deferred tax (expense) / benefit |
(178) |
|
135 |
|
(64) |
|
211 |
|
45 |
|
Income tax
expense |
(340) |
|
(125) |
|
(185) |
|
(14) |
|
(135) |
|
(Loss) / income including non-controlling
interests |
(1,117) |
|
(1,897) |
|
(539) |
|
(405) |
|
450 |
|
Non-controlling interests income / (loss) |
(3) |
|
15 |
|
— |
|
(42) |
|
(36) |
|
Net
(loss) / income attributable to equity holders of the
parent |
(1,120) |
|
(1,882) |
|
(539) |
|
(447) |
|
414 |
|
|
|
|
|
|
|
Basic (loss) / earnings per common share ($) |
(1.11) |
|
(1.86) |
|
(0.53) |
|
(0.44) |
|
0.41 |
|
Diluted (loss) / earnings per common share ($) |
(1.11) |
|
(1.86) |
|
(0.53) |
|
(0.44) |
|
0.41 |
|
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,012 |
|
1,012 |
|
1,012 |
|
1,014 |
|
1,014 |
|
Diluted weighted average common shares outstanding (in
millions) |
1,012 |
|
1,012 |
|
1,012 |
|
1,014 |
|
1,017 |
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
EBITDA (C =
A-B) |
967 |
|
925 |
|
1,063 |
|
1,555 |
|
1,652 |
|
EBITDA
Margin % |
6.5 |
% |
6.0 |
% |
6.4 |
% |
8.1 |
% |
8.6 |
% |
|
|
|
|
|
|
Own iron ore
production (Mt) |
14.4 |
|
14.8 |
|
13.6 |
|
14.6 |
|
14.1 |
|
Crude steel
production (Mt) |
21.1 |
|
19.8 |
|
22.2 |
|
23.8 |
|
24.1 |
|
Steel shipments (Mt) |
19.5 |
|
19.7 |
|
20.2 |
|
22.8 |
|
21.8 |
|
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
Three months ended |
In
millions of U.S. dollars |
Mar 31, 2020 |
Dec 31, 2019 |
Sept 30, 2019 |
Jun 30, 2019 |
Mar 31, 2019 |
Operating activities: |
|
|
|
|
|
(Loss)/income attributable to equity holders of the parent |
(1,120) |
|
(1,882) |
|
(539) |
|
(447) |
|
414 |
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
|
|
Non-controlling interests (income) / loss |
3 |
|
(15) |
|
— |
|
42 |
|
36 |
|
Depreciation
and impairment |
863 |
|
1,632 |
|
766 |
|
1,713 |
|
883 |
|
Exceptional
items3 |
457 |
|
828 |
|
— |
|
— |
|
— |
|
Income from
associates, joint ventures and other investments |
(142) |
|
(20) |
|
(25) |
|
(94) |
|
(208) |
|
Deferred tax
expense / (benefit) |
178 |
|
(135) |
|
64 |
|
(211) |
|
(45) |
|
Change in
working capital |
(109) |
|
2,600 |
|
(203) |
|
353 |
|
(553) |
|
Other
operating activities (net) |
464 |
|
(76) |
|
265 |
|
430 |
|
444 |
|
Net
cash provided by operating activities (A) |
594 |
|
2,932 |
|
328 |
|
1,786 |
|
971 |
|
Investing activities: |
|
|
|
|
|
Purchase of
property, plant and equipment and intangibles (B) |
(850) |
|
(815) |
|
(941) |
|
(869) |
|
(947) |
|
Other
investing activities (net) |
95 |
|
(936) |
|
125 |
|
305 |
|
254 |
|
Net
cash used in investing activities |
(755) |
|
(1,751) |
|
(816) |
|
(564) |
|
(693) |
|
Financing activities: |
|
|
|
|
|
Net
(payments) / proceeds relating to payable to banks and long-term
debt |
(224) |
|
126 |
|
804 |
|
468 |
|
(136) |
|
Dividends
paid |
(103) |
|
(21) |
|
(61) |
|
(204) |
|
(46) |
|
Share
buyback |
— |
|
— |
|
— |
|
— |
|
(90) |
|
Lease
payments and other financing activities (net) |
(59) |
|
(86) |
|
(84) |
|
(84) |
|
(72) |
|
Net
cash (used in) / provided by financing activities |
(386) |
|
19 |
|
659 |
|
180 |
|
(344) |
|
Net
(decrease) / increase in cash and cash equivalents |
(547) |
|
1,200 |
|
171 |
|
1,402 |
|
(66) |
|
Cash and
cash equivalents transferred from/(to) assets held for sale |
— |
|
— |
|
— |
|
21 |
|
(11) |
|
Effect of
exchange rate changes on cash |
(131) |
|
131 |
|
(155) |
|
17 |
|
(15) |
|
Change in cash and cash equivalents |
(678) |
|
1,331 |
|
16 |
|
1,440 |
|
(92) |
|
|
|
|
|
|
|
Free cash flow (C=A+B) |
(256) |
|
2,117 |
|
(613) |
|
917 |
|
24 |
|
Appendix 1: Product shipments by
region(1)
(000'kt) |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Flat |
4,853 |
|
4,325 |
|
4,454 |
|
4,732 |
|
4,750 |
|
Long |
846 |
|
819 |
|
847 |
|
873 |
|
721 |
|
NAFTA |
5,536 |
|
5,029 |
|
5,135 |
|
5,438 |
|
5,319 |
|
Flat |
1,277 |
|
1,553 |
|
1,513 |
|
1,563 |
|
1,699 |
|
Long |
1,085 |
|
1,176 |
|
1,312 |
|
1,236 |
|
1,194 |
|
Brazil |
2,351 |
|
2,717 |
|
2,810 |
|
2,785 |
|
2,880 |
|
Flat |
7,023 |
|
6,827 |
|
7,225 |
|
8,824 |
|
8,647 |
|
Long |
2,170 |
|
2,323 |
|
2,333 |
|
2,883 |
|
2,821 |
|
Europe |
9,300 |
|
9,290 |
|
9,698 |
|
11,811 |
|
11,553 |
|
CIS |
1,827 |
|
2,087 |
|
1,657 |
|
2,064 |
|
1,617 |
|
Africa |
786 |
|
890 |
|
1,060 |
|
1,113 |
|
1,049 |
|
ACIS |
2,614 |
|
2,985 |
|
2,718 |
|
3,182 |
|
2,662 |
|
Note: “Others and eliminations” are not presented in the
tableAppendix 2a: Capital expenditures(1)
(USDm) |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
NAFTA |
205 |
|
191 |
|
210 |
|
144 |
|
182 |
|
Brazil |
67 |
|
96 |
|
68 |
|
80 |
|
84 |
|
Europe |
323 |
|
273 |
|
390 |
|
337 |
|
353 |
|
ACIS |
122 |
|
108 |
|
153 |
|
115 |
|
137 |
|
Mining |
121 |
|
133 |
|
107 |
|
125 |
|
115 |
|
Total |
850 |
|
815 |
|
941 |
|
869 |
|
947 |
|
Note: “Others” are not presented in the table
Appendix 2b: Capital expenditure
projects
The following tables summarize the Company’s principal growth
and optimization projects involving significant capex.
Completed projects in most recent
quarter
Segment |
Site
/ unit |
Project |
Capacity / details |
Actual completion |
Europe |
Sosnowiec
(Poland) |
Modernization of
Wire Rod Mill |
Upgrade rolling
technology improving the mix of HAV products and increase volume by
90kt |
4Q 2019 |
ACIS |
ArcelorMittal Kryvyi Rih (Ukraine) |
New LF&CC 3 |
Facilities upgrade to switch from ingot to continuous caster route.
Additional billets of up to 145kt over ingot route through yield
increase |
2Q 2019 |
ACIS |
ArcelorMittal Kryvyi Rih (Ukraine) |
New LF&CC 2 |
Facilities upgrade to switch from ingot to continuous caster route.
Additional billets of up to 145kt over ingot route through yield
increase |
1Q 2020 |
Ongoing projects
Segment |
Site
/ unit |
Project |
Capacity / details |
Forecasted completion |
NAFTA |
Mexico |
New Hot strip mill |
Production capacity of 2.5Mt/year |
2021(a) |
NAFTA |
ArcelorMittal Dofasco (Canada) |
Hot Strip Mill Modernization |
Replace existing three end of life coilers with two states of the
art coilers and new runout tables |
2021(b) |
NAFTA |
Burns Harbor (US) |
New Walking Beam Furnaces |
Two new walking beam reheat furnaces bringing benefits on
productivity, quality and operational cost |
2021 |
Brazil |
ArcelorMittal Vega Do Sul |
Expansion project |
Increase hot dipped / cold rolled coil capacity and construction of
a new 700kt continuous annealing line (CAL) and continuous
galvanising line (CGL) combiline |
2023(c) |
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in meltshop capacity by 0.2Mt/year |
On hold(d) |
Brazil |
Monlevade |
Sinter plant, blast furnace and melt shop |
Increase in liquid steel capacity by 1.2Mt/year;Sinter feed
capacity of 2.3Mt/year |
On hold(d) |
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15Mt/year |
Under review(e) |
a) On September 28, 2017, ArcelorMittal announced a major $1.0
billion, investment programme at its Mexican operations, which is
focused on building ArcelorMittal Mexico’s downstream capabilities,
sustaining the competitiveness of its mining operations and
modernizing its existing asset base. The programme is designed to
enable ArcelorMittal Mexico to meet the anticipated increased
demand requirements from domestic customers, realize in full
ArcelorMittal Mexico’s production capacity of 5.3 million tonnes
and significantly enhance the proportion of higher added-value
products in its product mix, in-line with the Company’s Action 2020
plan. The main investment will be the construction of a new hot
strip mill. Upon completion, the project will enable ArcelorMittal
Mexico to produce c. 2.5 million tonnes of flat rolled steel, long
steel c. 1.8 million tonnes and the remainder made up of
semi-finished slabs. Coils from the new hot strip mill will be
supplied to domestic, non-auto, general industry customers. The hot
strip mill project commenced late 4Q 2017 and is expected to be
completed in 2021.
b) Investment in ArcelorMittal Dofasco (Canada) to modernize the
hot strip mill. The project is to install two new state of the art
coilers and runout tables to replace three end of life coilers. The
strip cooling system will be upgraded and include innovative power
cooling technology to improve product capability. The project is
expected to be completed in 2021.
c) In August 2018, ArcelorMittal announced the resumption of the
Vega Do Sul expansion to provide an additional 700kt of cold-rolled
annealed and galvanized capacity to serve the growing domestic
market. The ~$0.3 billion investment programme to increase rolling
capacity with construction of a new continuous annealing line and
CGL combiline (and the option to add a ca. 100kt organic coating
line to serve construction and appliance segments), and upon
completion, will strengthen ArcelorMittal’s position in the fast
growing automotive and industry markets through Advanced High
Strength Steel products. The investments will look to facilitate a
wide range of products and applications whilst further optimizing
current ArcelorMittal Vega facilities to maximize site capacity and
its competitiveness, considering comprehensive digital and
automation technology. Given the exceptional circumstances the
project has been slowed and project completion is now expected at
the end of 2023.
d) Although the Monlevade wire rod expansion project and Juiz de
Fora rebar expansion were completed in 2015, both the melt
shop expansion (in Juiz de Fora) and the sinter plant, blast
furnace and meltshop (in Monlevade) projects are currently on hold
and are expected to be completed upon Brazil domestic market
recovery.
e) ArcelorMittal had previously announced a Phase 2 project that
envisaged the construction of 15 million tonnes of concentrate
sinter fines capacity and associated infrastructure. The Phase 2
project was initially delayed due to the declaration of force
majeure by contractors in August 2014 due to the Ebola virus
outbreak in West Africa, and then reassessed following rapid iron
ore price declines over the ensuing period. ArcelorMittal Liberia
has completed the detailed feasibility study and is working on the
final investment submission.
Appendix 3: Debt repayment schedule as
of March 31, 2020
(USD billion) |
2020 |
2021 |
2022 |
2023 |
2024 |
≥2024 |
Total |
Bonds |
0.5 |
0.3 |
0.8 |
1.4 |
1.8 |
3.7 |
8.5 |
Commercial paper |
1.1 |
— |
|
— |
|
— |
|
— |
|
— |
|
1.1 |
Other loans |
1.4 |
0.7 |
0.5 |
0.8 |
0.2 |
0.6 |
4.2 |
Total gross debt |
3.0 |
1.0 |
1.3 |
2.2 |
2.0 |
4.3 |
13.8 |
Appendix 4: Reconciliation of gross debt
to net debt
(USD
million) |
March 31, 2020 |
December 31, 2019 |
March 31, 2019 |
Gross debt (excluding that held as part of the liabilities
held for sale) |
13,797 |
|
14,340 |
|
13,330 |
|
Gross debt held as part of the liabilities held for sale |
— |
|
— |
|
96 |
|
Gross debt |
13,797 |
|
14,340 |
|
13,426 |
|
Less: |
|
|
|
Cash and cash equivalents |
(4,298) |
|
(4,995) |
|
(2,246) |
|
Cash and cash equivalents held as part of the assets held for
sale |
— |
|
— |
|
(21) |
|
Net debt (including that held as part of the assets and the
liabilities held for sale) |
9,499 |
|
9,345 |
|
11,159 |
|
|
|
|
|
Net debt / LTM EBITDA |
2.1 |
|
1.8 |
|
1.2 |
|
Appendix 5: Terms and
definitions
Unless indicated otherwise, or the context otherwise requires,
references in this earnings release report to the following terms
have the meanings set out next to them below:
Adjusted net (loss) / income: refers to
reported net (loss)/income less impairment and exceptional
items.Apparent steel consumption: calculated as
the sum of production plus imports minus exports.Average
steel selling prices: calculated as steel sales divided by
steel shipments.Cash and cash equivalents:
represents cash and cash equivalents, restricted cash and
short-term investments.Capex: represents the
purchase of property, plant and equipment and
intangibles.Crude steel production: steel in the
first solid state after melting, suitable for further processing or
for sale.EBITDA: operating results plus
depreciation, impairment charges and exceptional
items.EBITDA/tonne: calculated as EBITDA divided
by total steel shipments.Exceptional items: income
/ (charges) relate to transactions that are significant, infrequent
or unusual and are not representative of the normal course of
business of the period.Foreign exchange and other net
financing (loss): include foreign currency exchange
impact, bank fees, interest on pensions, impairment of financial
assets, revaluation of derivative instruments and other charges
that cannot be directly linked to operating results.Free
cash flow (FCF): refers to net cash provided by operating
activities less capex.Gross debt: long-term debt
and short-term debt (including that held as part of the liabilities
held for sale).Liquidity: cash and cash
equivalents plus available credit lines excluding back-up lines for
the commercial paper program.LTIF: lost time
injury frequency rate equals lost time injuries per 1,000,000
worked hours, based on own personnel and
contractors.MT: refers to million metric
tonnesMarket-priced tonnes: represent amounts of
iron ore and coal from ArcelorMittal mines that could be sold to
third parties on the open market. Market-priced tonnes that are not
sold to third parties are transferred from the Mining segment to
the Company’s steel producing segments and reported at the
prevailing market price. Shipments of raw materials that do not
constitute market-priced tonnes are transferred internally and
reported on a cost-plus basis.Mining segment
sales: i) “External sales”: mined product sold to third
parties at market price; ii) “Market-priced tonnes”: internal sales
of mined product to ArcelorMittal facilities and reported at
prevailing market prices; iii) “Cost-plus tonnes” - internal sales
of mined product to ArcelorMittal facilities on a cost-plus basis.
The determinant of whether internal sales are reported at market
price or cost-plus is whether the raw material could practically be
sold to third parties (i.e. there is a potential market for the
product and logistics exist to access that market).Net
debt: long-term debt and short-term debt less cash and
cash equivalents (including those held as part of assets and
liabilities held for sale).Net debt/LTM EBITDA:
refers to Net debt divided by EBITDA (as used in the Company’s
financial reporting) over the last twelve months.Net
interest expense: includes interest expense less interest
incomeOn-going projects: refer to projects for
which construction has begun (excluding various projects that are
under development), even if such projects have been placed on hold
pending improved operating conditions.Operating
results: refers to operating
income/(loss).Operating segments: NAFTA segment
includes the Flat, Long and Tubular operations of USA, Canada and
Mexico. The Brazil segment includes the Flat, Long and Tubular
operations of Brazil and its neighbouring countries including
Argentina, Costa Rica and Venezuela. The Europe segment comprises
the Flat, Long and Tubular operations of the European business, as
well as Downstream Solutions. The ACIS segment includes the Flat,
Long and Tubular operations of Kazakhstan, Ukraine and South
Africa. Mining segment includes iron ore and coal
operations.Own iron ore production: includes total
of all finished production of fines, concentrate, pellets and lumps
and includes share of production.Seaborne iron ore
reference prices: refers to iron ore prices for 62% Fe CFR
ChinaShipments: information at segment and group
level eliminates intra-segment shipments (which are primarily
between Flat/Long plants and Tubular plants) and inter-segment
shipments respectively. Shipments of Downstream Solutions are
excluded.Steel-only EBITDA: calculated as EBITDA
total less Mining segment EBITDA.Steel-only
EBITDA/tonne: calculated as steel-only EBITDA divided by
total steel shipments.Working capital change (working
capital investment / release): Movement of change in
working capital - trade accounts receivable plus inventories less
trade and other accounts payable.
Appendix 6: Adjusted net (loss) / income
(USDm) |
1Q 20 |
4Q 19 |
3Q 19 |
2Q 19 |
1Q 19 |
Net (loss) / income |
(1,120) |
|
(1,882) |
|
(539) |
|
(447) |
|
414 |
|
Impairment |
(92) |
|
(830) |
|
— |
|
(947) |
|
(150) |
|
Exceptional items |
(457) |
|
(828) |
|
— |
|
— |
|
— |
|
Adjusted net (loss) / income |
(571) |
|
(224) |
|
(539) |
|
500 |
|
564 |
|
Footnotes
- 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”) and as adopted by the European Union. The
interim financial information included in this announcement has
also been also prepared in accordance with IFRS applicable to
interim periods, however this announcement does not contain
sufficient information to constitute an interim financial report as
defined in International Accounting Standard 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/alternative performance measures.
ArcelorMittal presents EBITDA, and EBITDA/tonne, which are non-GAAP
financial/alternative performance measures and calculated as shown
in the Condensed Consolidated Statement of Operations, as
additional measures to enhance the understanding of operating
performance. ArcelorMittal believes such indicators are relevant to
describe trends relating to cash generating activity and provides
management and investors with additional information for comparison
of the Company’s operating results to the operating results of
other companies. Segment information presented in this press
release are prior to inter-segment eliminations and certain
adjustments made to operating result of the segments to reflect
corporate costs, income from non-steel operations (e.g., logistics
and shipping services) and the elimination of stock margins between
the segments. ArcelorMittal also presents net debt and change in
working capital as additional measures to enhance the understanding
of its financial position, changes to its capital structure and its
credit assessment. ArcelorMittal also presents Adjusted net (loss)
/ income as it believes it is a useful measure for the underlying
business performance excluding impairment and exceptional items.
ArcelorMittal also presents free cash flow (FCF), which is a
non-GAAP financial/alternative performance measure calculated as
shown in the Condensed Consolidated Statement of Cash Flows,
because it believes it is a useful supplemental measure for
evaluating the strength of its cash generating capacity. The
Company also presents the ratio of net debt to EBITDA for the last
twelve month period, which investors may find useful in
understanding the Company's ability to service its debt. The
Company’s guidance as to the EBITDA range for 2020 is based on the
same accounting policies as those applied in the Company’s
financial statements prepared in accordance with IFRS. Non-GAAP
financial/alternative performance measures should be read in
conjunction with, and not as an alternative for, ArcelorMittal's
financial information prepared in accordance with IFRS. Such
non-GAAP/alternative performance measures may not be comparable to
similarly titled measures applied by other companies.
- Excluding the impact of ArcelorMittal Italia, the LTIF was
0.72x for 1Q 2020 as compared to 0.84x for 4Q 2019 and 0.66x for 1Q
2019.
- Impairment charges for 1Q 2020 were $92 million and relate to
the permanent coke plant closure in Florange, France, at the end of
April 2020. Impairment charges for 4Q 2019 were $830 million and
related to impairment of the fixed assets of ArcelorMittal USA
($0.7 billion) following impairment assessments performed during
the quarter, resulting from a further decrease in the near-term
average selling price assumption and $0.1 billion in South Africa
(primarily related to the fixed assets of Newcastle Works in South
Africa following lower domestic volumes). Impairment charges for 1Q
2019 were $150 million related to the remedy asset sales for the
ArcelorMittal Italia acquisition. Exceptional items of $457 million
for 1Q 2020 primarily include inventory related charges in NAFTA
and Europe due to a weaker steel pricing outlook driven by COVID-19
impacts. Exceptional items of $828 million for 4Q 2019, primarily
included inventory related charges in NAFTA and Europe following a
period of exceptionally weak steel pricing.
- ArcelorMittal Mines Canada, otherwise known as ArcelorMittal
Mines and Infrastructure Canada.
- On December 19, 2018, ArcelorMittal signed a $5,500,000,000
Revolving Credit Facility, with a five-year maturity plus two
one-year extension options. During the fourth quarter of
2019, ArcelorMittal executed the option to extend the facility to
December 19, 2024. The extension was completed for $5.4 billion of
the available amount, with the remaining $0.1 billion remaining
with a maturity of December 19, 2023 as of March 31, 2020. The
facility may be further extended for an additional year in December
2020. As of March 31, 2020, the $5.5 billion revolving credit
facility was fully available. On May 5, 2020, ArcelorMittal and a
syndicate of banks signed a credit facility with tranches of $0.7
billion and €2.1 billion (the “New Credit Facility”). The Credit
Facility further enhances the Company's already strong liquidity
position of $9.8 billion as of March 31, 2020, including a $5.5
billion revolving credit facility, which remains undrawn and is
available until December 2024. The New Credit Facility has a
maturity of 12 months and can be used for general corporate
purposes. While the Company has no immediate need to draw on this
New Credit Facility, it provides additional financial flexibility
in the current extraordinary circumstances.
- Assets and liabilities held for sale, as of March 31, 2019
include the ArcelorMittal Italia remedy package assets (as
previously disclosed in the 1Q 2018 earnings release) and sold in
June 2019, and the carrying value of the USA long product
facilities at Steelton (“Steelton”). Steelton is no longer held for
sale as of March 31, 2020.
- Relates to the rollover of the Indian rupee hedge at market
price which protects the dollar funds needed for the Essar
transaction as per the resolution plan approved by the Committee of
Creditors and the National Company Law Tribunal in Ahmedabad. The
hedge was unwound on the closing of the acquisition in 4Q 2019. On
October 17, 2018, the Company announced that it had approved a
payment of 7,469 crore rupees (c.$1 billion, subsequently paid) to
the financial creditors of Uttam Galva and KSS Petron to clear
overdue debts in order that the offer it submitted for ESIL on
April 2, 2018 would be eligible and considered by ESIL’s CoC.
- On December 23, 2019, ArcelorMittal, announced it had signed a
share purchase agreement with DryLog Ltd (DryLog) for the sale of a
50% stake in Global Chartering Limited (GCL), its wholly owned
shipping business, and will subsequently form a 50:50 shipping
joint venture with DryLog. The transaction closed on December 31,
2019. The stake sale and JV formation impacted ArcelorMittal’s net
debt by $527 million, with $400 million on completion in 4Q 2019
and $127 million received in 1Q 2020. The transaction is part of
ArcelorMittal’s commitment to unlock up to $2 billion of value from
its asset portfolio by mid-year 2021.
- AMNS India key performance indicators for 1Q 2020 are as
follows: 1Q 2020 crude steel production of 1.7Mt (7.0Mt annualized
run rate) and EBITDA of $140 million (annualized $560 million).
AMNS India’s operations have now been impacted by the COVID-19
pandemic and lockdown measures introduced in the country during
late 1Q 2020, with the assets currently running at low utilization
levels. The cash needs (i.e. maintenance capex, interest and tax)
are less than $250 million per annum. Progress on value chain
integration: On March 3, 2020 the Company welcomed judgment by NCLT
Cuttack approving AMNS resolution plan for the Odisha Slurry
Pipeline Infrastructure Ltd (OSPIL). The 253km pipeline connects
AMNS India’s iron ore beneficiation plant in Dabuna to its pellet
plant in Paradip in the state of Odisha. On March 3, 2020, AMNS
India announced completion of the acquisition of Bhander Power
Plant in Hazira, Gujarat from Edelweiss Asset Reconstruction
Company for approximately $70 million. Bhander, a natural gas-based
thermal plant with an installed capacity of 500MW, will remain
captive to AMNS India’s steel manufacturing operations at
Hazira. In early March 2020, ArcelorMittal India Private
Limited (AMIPL) was selected as the preferred bidder for a 5.5Mtpa
iron ore mine license in Odisha following an auction process
facilitated by the state government, with an acquisition cost of
approximately $15 million. On conclusion of the license award
process, AMIPL will seek requisite clearances, as well as mine
development and production agreements, ahead of commencing mining
operations. This is consistent with AMNS India’s medium to long
term strategy to significantly grow its production capacity in
India.
- The Company is temporarily reducing fixed cost in line with
lower production rates. As a result, 2Q 2020 fixed cost are
expected to be 25-30% below 1Q 2020 levels. The steps taken by the
Company include: a) temporary labour cost savings: senior
management / Board of Directors salary reduction; utilizing
available economic unemployment schemes; temporary layoffs; federal
and state subsidy/grants; salary cuts; reduction/elimination of
contractors, overtime reduction etc. b) reduction in repairs and
maintenance (R&M) expenses: spend expected to be lower due to
lower operating rates; and c) reduced SG&A expenses: Fixed cost
savings achieved from countries in which we operate where the
currency has depreciated, as well as reduced SG&A expenses such
as IT, travel, sales and marketing expenses, consultancy fees
etc.
- On April 3, 2020, ArcelorMittal South Africa made an
announcement related to the impact of the COVID-19 pandemic. This
referred to the critical steps taken during 2019 to ensure the
sustainability of ArcelorMittal South Africa, including the
large-scale labour reorganisation concluded at the beginning of the
year, the Strategic Asset Footprint Review, which resulted in the
decision to place the Saldanha Works into care and maintenance and
the review of the Newcastle Works, which is now primarily focused
on servicing the domestic and Africa Overland markets. It announced
that the anticipated impact of COVID-19 on the economy has led
ArcelorMittal South Africa to consider further measures to ensure
its sustainability. Several temporary interventions have been
implemented, including curtailment of expenditure on non-critical
goods and services, and salary reductions for all employees with
effect from April 2020 for a likely period of three months.
- The Company considered the impact of the COVID-19 outbreak as
an impairment indicator as of 1Q 2020 for its main steel
operations. Accordingly, it updated future cash flow
projections to reflect latest forecasts available for 2Q 2020
and 3Q 2020 and, as a result, concluded that no impairment charge
was required as of March 31, 2020.
First quarter 2020 earnings analyst
conference call
ArcelorMittal management (including CEO and CFO) will host a
conference call for members of the investment community to present
and comment on the three-month and twelve-month periods ended March
31, 2020 on: Thursday May 7, 2020 at 9.30am US Eastern
time; 14.30pm London time and 15.30pm CET.
The dial in numbers are: |
|
|
Location |
Toll free
dial in numbers |
Local dial in numbers |
Participant |
UK
local: |
0808 238
0676 |
+44 (0)203 057 6900 |
7995055# |
US local: |
+1 866 220 1433 |
+1 347 903 0960 |
7995055# |
France: |
0805 101 469 |
+33 1 7070 6079 |
7995055# |
Germany: |
0800 588 9185 |
+49 69 2222 2624 |
7995055# |
Spain: |
900 828 532 |
+34 914 144 464 |
7995055# |
Luxembourg: |
800 23 023 |
+352 2786 0311 |
7995055# |
Join the call via telephone or alternatively use the live audio
webcast link
https://interface.eviscomedia.com/player/1120/index.en.html where
the replay will also be available afterwards.
To listen to the webcast recording, please visit the results
section on our website once the event has finished
Forward-Looking Statements
This document may contain forward-looking information and
statements about ArcelorMittal and its subsidiaries. These
statements include financial projections and estimates and their
underlying assumptions, statements regarding plans, objectives and
expectations with respect to future operations, products and
services, and statements regarding future performance.
Forward-looking statements may be identified by the words
“believe”, “expect”, “anticipate”, “target” or similar expressions.
Although ArcelorMittal’s management believes that the expectations
reflected in such forward-looking statements are reasonable,
investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to
numerous risks and uncertainties, many of which are difficult to
predict and generally beyond the control of ArcelorMittal, that
could cause actual results and developments to differ materially
and adversely from those expressed in, or implied or projected by,
the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings
with the Luxembourg Stock Market Authority for the Financial
Markets (Commission de Surveillance du Secteur Financier) and the
United States Securities and Exchange Commission (the “SEC”) made
or to be made by ArcelorMittal, including ArcelorMittal’s latest
Annual Report on Form 20-F on file with the SEC. ArcelorMittal
undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
About ArcelorMittal
ArcelorMittal is the world's leading steel and mining company,
with a presence in 60 countries and an industrial footprint in 18
countries. Guided by a philosophy to produce safe, sustainable
steel, we are the leading supplier of quality steel in the major
global steel markets including automotive, construction, household
appliances and packaging, with world-class research and development
and outstanding distribution networks.
Through our core values of sustainability, quality and
leadership, we operate responsibly with respect to the health,
safety and wellbeing of our employees, contractors and the
communities in which we operate. For us, steel is the fabric of
life, as it is at the heart of the modern world from railways to
cars and washing machines. We are actively researching and
producing steel-based technologies and solutions that make many of
the products and components people use in their everyday lives more
energy efficient.
We are one of the world’s five largest producers of iron ore and
metallurgical coal. With a geographically diversified portfolio of
iron ore and coal assets, we are strategically positioned to serve
our network of steel plants and the external global market. While
our steel operations are important customers, our supply to the
external market is increasing as we grow. In 2019, ArcelorMittal
had revenues of $70.6 billion and crude steel production of 89.8
million metric tonnes, while own iron ore production reached 57.1
million metric tonnes.
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish
stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please
visit: http://corporate.arcelormittal.com/
EnquiriesArcelorMittal investor relations: +44
207 543 1128; Retail: +44 207 543 1156; SRI: +44 207 543 1156 and
Bonds/credit: +33 1 71 92 10 26.
ArcelorMittal corporate communications (E-mail:
press@arcelormittal.com) +44 0207 629 7988. Contact: Paul Weigh +44
203 214 2419.
- ArcelorMittal reports first quarter 2020 results
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