Luxembourg, August 1, 2019 - 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 and six-month periods ended June 30, 2019.
Highlights:
- Health and safety: LTIF rate2 of 1.26x in 2Q 2019 and 1.19x in
1H 2019
- Operating loss of $0.2bn in 2Q 2019 including $0.9bn of
impairments ($0.3bn related to the remedy asset sales for the
ArcelorMittal Italia acquisition and $0.6bn impairment of the fixed
assets of ArcelorMittal USA following a sharp decline in steel
prices and high raw material costs); 1H 2019 operating income of
$0.6bn including $1.1bn of impairments3
- EBITDA of $1.6bn in 2Q 2019; 1H 2019 EBITDA of $3.2bn, -42.6%
lower YoY reflecting a negative price-cost effect
- Net loss of $0.4bn in 2Q 2019 (including $0.9bn of
impairments3); 1H 2019 net loss of $33 million (including $1.1bn of
impairments3)
- Steel shipments of 22.8Mt in 2Q 2019, up 4.3% vs. 1Q 2019 and
up 4.8% vs. 2Q 2018; 1H 2019 steel shipments of 44.6Mt, up 3.5% YoY
largely reflecting the impact of the ArcelorMittal Italia
acquisition
- 2Q 2019 iron ore shipments of 15.5Mt (+6.1% YoY), of which
9.9Mt shipped at market prices (-1.0% YoY); 1H 2019 iron ore
shipments of 29.3Mt (+3.0% YoY), of which 19.1Mt shipped at market
prices (-0.4% YoY)
- Gross debt of $13.8bn as of June 30, 2019 as compared to
$13.4bn as of March 31, 2019. Net debt decreased by $1.0bn during
the quarter to $10.2bn as of June 30, 2019, due in part to M&A
proceeds and working capital release ($0.4bn) (despite higher raw
materials costs and higher steel shipments). Excluding IFRS 16
impact4, net debt as of June 30, 2019 was $1.5bn lower YoY
Strategic actions:
- Given weak demand and high import levels in Europe, the Company
has taken steps to align its European production levels to the
current market demand. As a result of previously announced European
production curtailments, approximately 4.2Mt of annualized
production curtailment is scheduled for 2H 2019
- Further temporary cost initiatives undertaken to navigate the
current weak market backdrop
- Excluding IFRS 16 impact, net debt at the end of June 30, 2019
was the lowest level achieved since the ArcelorMittal merger.
Deleveraging remains the Group’s priority.
- Cash needs of the business for 2019 have been reduced by $1.0bn
to $5.4bn, due to lower expected capex and tax and others
- To complement the expected deleveraging through FCF generation,
the Company has identified opportunities to unlock up to $2bn of
value from its asset portfolio over the next two years
Outlook:
- The Company now expects global steel demand in 2019 to grow
+0.5% to +1.5% (ex-China steel demand growth of +0.5% to +1.0%; US
+0% to +1.0%; and Europe to contract by between -2.0% to
-1.0%)
- Against this backdrop and considering scope changes
(ArcelorMittal Italia acquisition, remedy asset sales and European
production curtailments) steel shipments are still expected to
increase YoY, which should provide support for the Group's Action
2020 program
Financial highlights (on the basis of
IFRS1):
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Sales |
19,279 |
|
19,188 |
|
19,998 |
|
38,467 |
|
39,184 |
|
|
Operating (loss)/income |
(158 |
) |
769 |
|
2,361 |
|
611 |
|
3,930 |
|
|
Net (loss)/income attributable to equity holders of the parent |
(447 |
) |
414 |
|
1,865 |
|
(33 |
) |
3,057 |
|
|
Basic (loss) / earnings per common share (US$) |
(0.44 |
) |
0.41 |
|
1.84 |
|
(0.03 |
) |
3.01 |
|
|
|
|
|
|
|
|
|
Operating (loss) / income/ tonne (US$/t) |
(7 |
) |
35 |
|
109 |
|
14 |
|
91 |
|
|
EBITDA |
1,555 |
|
1,652 |
|
3,073 |
|
3,207 |
|
5,585 |
|
|
EBITDA/ tonne (US$/t) |
68 |
|
76 |
|
141 |
|
72 |
|
130 |
|
|
Steel-only EBITDA/ tonne (US$/t) |
43 |
|
56 |
|
127 |
|
50 |
|
114 |
|
|
|
|
|
|
|
|
|
Crude steel production (Mt) |
23.8 |
24.1 |
23.2 |
47.8 |
46.5 |
|
Steel shipments (Mt) |
22.8 |
21.8 |
21.8 |
44.6 |
43.1 |
|
Own iron ore production (Mt) |
14.6 |
14.1 |
14.5 |
28.7 |
29.1 |
|
Iron ore shipped at market price (Mt) |
9.9 |
9.2 |
10.0 |
19.1 |
19.1 |
Commenting, Mr. Lakshmi N. Mittal,
ArcelorMittal Chairman and CEO, said:
"After a strong 2018, market conditions in the first half of
2019 have been very tough, with the profitability of our steel
segments suffering due to lower steel prices combined with higher
raw material costs. This has been only partially offset by improved
profitability from our mining segment, but I am pleased that we
have generated healthy free cash flow demonstrating the improved
robustness of the business thanks to our Action 2020 plan.
Global overcapacity remains a clear challenge. We have reduced
capacity in Europe in response to the current weak demand
environment, which has also impacted the turnaround of the ex-Ilva
facilities in Italy. Further action needs to be taken to address
the increasing level of imports entering the continent due to
ineffective safeguard measures and we continue to engage with the
European Commission to create a level playing field for the sector.
A supportive regulatory and funding environment is also crucial to
our ambition to significantly reduce our emissions as announced in
our recent Climate Action report.
We are taking further actions to adapt and strengthen the
Company, ensuring we make continued progress towards our net debt
target and increase returns to shareholders. Despite the current
challenges, the Company is well positioned to benefit from any
improvement in market conditions and the current very low spread
environment".
Sustainable development and safety
performance
Health and safety - Own personnel and
contractors lost time injury frequency rate
Health and safety performance (inclusive of ArcelorMittal Italia
(previously known as Ilva)), based on own personnel figures and
contractors lost time injury frequency (LTIF) rate was 1.26x in
second quarter of 2019 ("2Q 2019") as compared to 1.14x in the
first quarter of 2019 (“1Q 2019”). Health and safety performance
(inclusive of ArcelorMittal Italia) in the first six months of 2019
(“1H 2019”) was 1.19x.
Excluding the impact of ArcelorMittal Italia, the LTIF was 0.68x
for 2Q 2019 as compared to 0.66x for 1Q 2019 and 0.71x for the
second quarter of 2018 (“2Q 2018”). Health and safety
performance (excluding the impact of ArcelorMittal Italia) improved
to 0.66x in 1H 2019 as compared to 0.67x for the first six months
of 2018 (“1H 2018”).
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 |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
|
Mining |
0.64 |
|
0.38 |
|
0.62 |
|
0.51 |
|
0.53 |
|
|
NAFTA |
0.46 |
|
0.58 |
|
0.64 |
|
0.50 |
|
0.52 |
|
|
Brazil |
0.43 |
|
0.48 |
|
0.35 |
|
0.45 |
|
0.36 |
|
|
Europe |
1.00 |
|
0.85 |
|
1.02 |
|
0.91 |
|
0.92 |
|
|
ACIS |
0.58 |
|
0.75 |
|
0.52 |
|
0.66 |
|
0.64 |
|
|
Total Steel |
0.69 |
|
0.71 |
|
0.72 |
|
0.69 |
|
0.69 |
|
|
Total (Steel and Mining) |
0.68 |
|
0.66 |
|
0.71 |
|
0.66 |
|
0.67 |
|
|
ArcelorMittal Italia |
13.73 |
11.05 |
- |
12.35 |
- |
|
Total (Steel and Mining) including ArcelorMittal
Italia |
1.26 |
1.14 |
- |
1.19 |
- |
Key sustainable development highlights
for 2Q 2019:
- ArcelorMittal published its first Climate Action report with a
stated ambition to significantly reduce its carbon footprint by
2050; ArcelorMittal's European business specifically targets to be
carbon neutral by 2050.
- ArcelorMittal has become a member of the Energy Transition
Commission.
- ArcelorMittal hosted a consultation at the ArcelorMittal Orbit
in London on the draft ResponsibleSteel™ standard - the steel
industry’s first, multi-stakeholder standard for the entire
‘mine-to-metal’ steel value chain. The standard is due to
launch to the market at the end of 2019.
- ArcelorMittal won Fiat Chrysler Automobiles' best raw material
supplier award, recognizing our commitment to deliver value through
innovation, quality and competitiveness.
- ArcelorMittal was named Steel Sustainability Champion by the
World Steel Association for the second consecutive year.
Analysis of results for the six months
ended June 30, 2019 versus results for the six months ended June
30, 2018
Total steel shipments for 1H 2019 were 44.6 million metric
tonnes representing an increase of 3.5% as compared to 1H
2018,primarily due to higher steel shipments in Europe (+10.1%) due
to the impact of ArcelorMittal Italia (following its consolidation
from November 1, 2018) and in Brazil (+6.6%), offset in part by
lower shipments in ACIS (-4.0%) and NAFTA (-5.3%). Excluding the
impact of ArcelorMittal Italia and Votorantim, steel shipments in
1H 2019 were 1.9% lower as compared to 1H 2018.
Sales for 1H 2019 decreased by 1.8% to $38.5 billion as compared
with $39.2 billion for 1H 2018, primarily due to lower average
steel selling prices (-6.1%) offset in part by higher steel
shipments (+3.5%).
Depreciation of $1.5 billion for 1H 2019 was higher as compared
with $1.4 billion in 1H 2018. Depreciation charges for 2019 include
the depreciation of right-of-use assets recognized in property,
plant and equipment under IFRS 16 lease accounting, which were
previously recorded in cost of sales and selling, general and
administrative expenses. FY 2019 depreciation is expected to be
approximately $3.1 billion (based on current exchange rates).
Impairment charges for 1H 2019 were $1.1 billion related to the
remedy asset sales for the ArcelorMittal Italia acquisition ($0.5
billion) and impairment of the fixed assets of ArcelorMittal USA
($0.6 billion) following a sharp decline in steel prices and high
raw material costs. Impairment charges for 1H 2018 were $86 million
related to the agreed remedy package required for the approval of
the Votorantim acquisition5.
Exceptional items for 1H 2019 were nil. Exceptional charges for
1H 2018 were $146 million related to a provision taken in respect
of a case that has been settled6.
Operating income for 1H 2019 was lower at $0.6 billion as
compared to $3.9 billion in 1H 2018 primarily driven by impairments
as discussed above, as well as weaker operating conditions
(negative price-cost effect in steel segments) reflecting both the
impact of the decline in steel prices since 4Q 2018 and higher raw
material costs offset in part by improved mining segment
performance.
Income from associates, joint ventures and other investments for
1H 2019 was higher at $302 million as compared to $242 million for
1H 2018. Performance of Calvert and Chinese investee weakened in 1H
2019 as compared to 1H 2018, whilst 1H 2018 was negatively impacted
by $132 million impairment of ArcelorMittal’s investment in
Macsteel (South Africa) following the announced sale of its 50%
stake in May 2018. Income from investments in associates, joint
ventures and other investments in 1H 2019 and 1H 2018 include the
annual dividend income from Erdemir of $93 million and $87 million,
respectively.
Net interest expense in 1H 2019 was slightly lower at $315
million as compared to $323 million in 1H 2018. The Company expects
full year 2019 net interest expense to be approximately $650
million.
Foreign exchange and other net financing losses were $404
million for 1H 2019 as compared to $564 million for 1H 2018.
Foreign exchange losses for 1H 2019 were $14 million as compared to
foreign exchange losses of $237 million in 1H 2018.
ArcelorMittal recorded an income tax expense of $149 million for
1H 2019 as compared to $184 million for 1H 2018. The deferred tax
benefit of $340 million in 1H 2018 is the result of recording a
deferred tax asset primarily due to the expectation of higher
future profits mainly in Luxembourg, following the share capital
conversion.
ArcelorMittal’s net loss for 1H 2019 was $33 million, or $0.03
basic loss per common share, as compared to a net income in 1H 2018
of $3.1 billion, or $3.01 basic earnings per common share.
Analysis of results for 2Q 2019 versus
1Q 2019 and 2Q 2018Total steel shipments in 2Q 2019 were
4.3% higher at 22.8Mt as compared with 21.8Mt for 1Q 2019 primarily
due to higher steel shipments in ACIS (+19.5%) due to normalization
of production in Temirtau (Kazakhstan), seasonally higher shipments
in Europe (+2.2%), higher shipments in NAFTA (+2.2%), primarily due
to ramp up of the blast furnace in Mexico, offset by lower
shipments in Brazil (-3.3%) due to weaker export conditions.
Total steel shipments in 2Q 2019 were 4.8% higher as compared
with 21.8Mt for 2Q 2018 primarily due to higher steel shipments in
Europe (+12.3%) due to the acquisition of ArcelorMittal Italia,
ACIS (+4.1%) due to operational issues in Ukraine last year offset
by lower steel shipments in NAFTA (-6.3%) and in Brazil (-1.6%).
Excluding the impact of the ArcelorMittal Italia acquisition, steel
shipments were -0.7% lower as compared to 2Q 2018.
Sales in 2Q 2019 were 0.5% higher at $19.3 billion as compared
to $19.2 billion for 1Q 2019 primarily due to higher steel
shipments (+4.3%) offset in part by lower average steel selling
prices (-3.9%). Sales in 2Q 2019 were 3.6% lower as compared to $20
billion for 2Q 2018 primarily due to lower average steel selling
prices (-8.8%), partially offset by higher steel shipments
(+4.8%).
Depreciation for 2Q 2019 was higher at $766 million as compared
to $733 million for 1Q 2019. 2Q 2019 depreciation expense was
higher than $712 million in 2Q 2018 primarily due to the impact of
IFRS 16.
Impairment charges for 2Q 2019 were $947 million related to the
remedy asset sales for the ArcelorMittal Italia acquisition ($347
million) and impairment of the fixed assets of ArcelorMittal USA
($600 million) following a sharp decline in steel prices and high
raw material costs. Impairment charges for 1Q 2019 of $150 million
related to the remedy asset sales for the ArcelorMittal Italia
acquisition. Impairment charges for 2Q 2018 were nil.
Operating loss for 2Q 2019 was $0.2 billion as compared to an
operating income of $0.8 billion in 1Q 2019 and an operating income
of $2.4 billion in 2Q 2018 primarily driven by impairments as
discussed above, as well as weaker operating conditions (negative
price-cost effect in the steel segments) reflecting both the impact
of the decline in steel prices since 1Q 2019 and higher raw
material prices, offset in part by the impact of higher seaborne
iron ore reference prices.
Income from associates, joint ventures and other investments for
2Q 2019 was $94 million as compared to $208 million for 1Q 2019 and
$30 million for 2Q 2018. 2Q 2019 was impacted by weaker Chinese and
Calvert investee performances. 1Q 2019 was positively impacted by
the annual dividend declared by Erdemir ($93 million). 2Q 2018 was
impacted by $132 million impairment of ArcelorMittal’s investment
in Macsteel (South Africa) following the announced sale of its 50%
stake in May 2018.
Net interest expense in 2Q 2019 was $154 million as compared to
$161 million in 1Q 2019 and lower than $159 million in 2Q
2018.
Foreign exchange and other net financing losses in 2Q 2019 were
$173 million as compared to $231 million for 1Q 2019 and $390
million in 2Q 2018. Foreign exchange gain for 2Q 2019 was $34
million as compared to foreign exchange losses of $48 million and
$309 million, in 1Q 2019 and 2Q 2018, respectively. 2Q 2019
includes non-cash mark-to-market losses of $55 million related to
the mandatory convertible bonds call option as compared to losses
of $6 million in 1Q 2019 and gains of $91 million in 2Q 2018.
ArcelorMittal recorded an income tax expense of $14 million in
2Q 2019 as compared to an income tax expense of $135 million for 1Q
2019 and an income tax benefit of $19 million for 2Q 2018.
Income attributable to non-controlling interests was $42 million
for 2Q 2019 as compared to $36 million for 1Q 2019 and losses
attributable to non-controlling interests of $4 million in 2Q
2018.
ArcelorMittal recorded a net loss for 2Q 2019 of $0.4 billion,
or $0.44 basic loss per common share, as compared to net income for
1Q 2019 of $0.4 billion, or $0.41 basic earnings per common share,
and a net income for 2Q 2018 of $1.9 billion, or $1.84 basic
earnings per common share.
Analysis of segment operations
NAFTA
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
|
Sales |
5,055 |
|
5,085 |
|
5,356 |
|
10,140 |
|
10,108 |
|
|
Operating (loss) / income |
(539 |
) |
216 |
|
660 |
|
(323 |
) |
968 |
|
|
Depreciation |
(137 |
) |
(134 |
) |
(131 |
) |
(271 |
) |
(263 |
) |
|
Impairments |
(600 |
) |
— |
|
— |
|
(600 |
) |
— |
|
|
EBITDA |
198 |
|
350 |
|
791 |
|
548 |
|
1,231 |
|
|
Crude steel production (kt) |
5,590 |
|
5,388 |
|
5,946 |
|
10,978 |
|
11,810 |
|
|
Steel shipments (kt) |
5,438 |
|
5,319 |
|
5,803 |
|
10,757 |
|
11,362 |
|
|
Average steel selling price (US$/t) |
836 |
|
874 |
|
853 |
|
855 |
|
817 |
|
NAFTA segment crude steel production increased by 3.7% to 5.6Mt
in 2Q 2019 as compared to 5.4Mt in 1Q 2019. This increase was
primarily due to ramp up of the blast furnace in Mexico (which had
suffered delays following scheduled maintenance in 3Q 2018).
Steel shipments in 2Q 2019 increased by 2.2% to 5.4Mt as
compared to 5.3Mt in 1Q 2019 primarily due to a 21.1% improvement
in the long product shipments (mainly in Mexico as discussed
above).
Sales in 2Q 2019 were stable at $5.1 billion as compared to 1Q
2019, primarily due to higher steel shipments (+2.2%) offset by a
4.3% decline in average steel selling prices (with both flat and
long products down 3.6% and 5.7%, respectively). US prices have
deteriorated through 2Q 2019 reflecting weaker demand exacerbated
by prolonged customer destocking and increased domestic supply with
prices well below import parity.
Impairment charges for 2Q 2019 were $600 million related to
impairment of the fixed assets of ArcelorMittal USA following a
sharp decline in steel prices and high raw material costs. As a
result, there was an operating loss in 2Q 2019 of $539 million as
compared to operating income of $216 million in 1Q 2019 and $660
million in 2Q 2018.
EBITDA in 2Q 2019 decreased by 43.4% to $198 million as compared
to $350 million in 1Q 2019 primarily due to negative price-cost
effect offset in part by higher steel shipment volumes. EBITDA in
2Q 2019 decreased by 75.0% as compared to $791 million in 2Q 2018
primarily due to a negative price-cost effect and lower steel
shipments (-6.3%).
Brazil
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Sales |
2,126 |
|
2,156 |
|
2,191 |
|
4,282 |
|
4,179 |
|
|
Operating income |
234 |
|
239 |
|
369 |
|
473 |
|
584 |
|
|
Depreciation |
(79 |
) |
(70 |
) |
(74 |
) |
(149 |
) |
(143 |
) |
|
Impairment |
— |
|
— |
|
— |
|
— |
|
(86 |
) |
|
EBITDA |
313 |
|
309 |
|
443 |
|
622 |
|
813 |
|
|
Crude steel production (kt) |
2,830 |
|
3,013 |
|
3,114 |
|
5,843 |
|
5,915 |
|
|
Steel shipments (kt) |
2,785 |
|
2,880 |
|
2,831 |
|
5,665 |
|
5,314 |
|
|
Average steel selling price (US$/t) |
705 |
|
704 |
|
728 |
|
705 |
|
739 |
|
Brazil segment crude steel production decreased by 6.1% to 2.8Mt
in 2Q 2019 as compared to 3.0Mt for 1Q 2019, due in part to the
decision to stop ArcelorMittal Tubarão's blast furnace #2 in June,
two months earlier than its initial maintenance schedule due to
deteriorating export market conditions, as well as lower production
in the long business.
Steel shipments in 2Q 2019 decreased by 3.3% to 2.8Mt as
compared to 2.9Mt in 1Q 2019, due to a decrease in flat products
(-8.0%) primarily due to lower exports.
Sales in 2Q 2019 decreased by 1.4% to $2.1 billion as compared
to $2.2 billion in 1Q 2019, primarily due to lower steel shipments
as discussed above. Average steel selling prices remained stable as
increases in local currency sales prices were offset by currency
depreciation.
Operating income in 2Q 2019 marginally declined to $234 million
as compared to $239 million in 1Q 2019 and was lower than $369
million in 2Q 2018.
EBITDA in 2Q 2019 increased by 1.2% to $313 million as compared
to $309 million in 1Q 2019. EBITDA in 2Q 2019 was 29.3% lower as
compared to $443 million in 2Q 2018 primarily due to negative
price-cost effect and foreign exchange translation impact.
Europe
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Sales |
10,396 |
|
10,494 |
|
10,527 |
|
20,890 |
|
21,168 |
|
|
Operating (loss) / income |
(301 |
) |
11 |
|
853 |
|
(290 |
) |
1,433 |
|
|
Depreciation |
(313 |
) |
(309 |
) |
(292 |
) |
(622 |
) |
(610 |
) |
|
Impairment |
(347 |
) |
(150 |
) |
— |
|
(497 |
) |
— |
|
|
Exceptional charges |
— |
|
— |
|
— |
|
— |
|
(146 |
) |
|
EBITDA |
359 |
|
470 |
|
1,145 |
|
829 |
|
2,189 |
|
|
Crude steel production (kt) |
12,079 |
|
12,372 |
|
11,026 |
|
24,451 |
|
22,272 |
|
|
Steel shipments (kt) |
11,811 |
|
11,553 |
|
10,516 |
|
23,364 |
|
21,213 |
|
|
Average steel selling price (US$/t) |
704 |
|
729 |
|
800 |
|
716 |
|
800 |
|
Europe segment crude steel production decreased by 2.4% to
12.1Mt in 2Q 2019 as compared to 12.4Mt in 1Q 2019, primarily due
to weaker than expected market conditions.
Steel shipments in 2Q 2019 seasonally increased by 2.2% to
11.8Mt as compared to 11.6Mt in 1Q 2019, whilst they were 12.3%
higher than 2Q 2018 (due to the scope impact from the ArcelorMittal
Italia acquisition which was consolidated from November 1, 2018),
the impact of floods in Asturias, Spain and the impact of rail
strikes in France in 2Q 2018.
Sales in 2Q 2019 were $10.4 billion, -0.9% lower as compared to
$10.5 billion in 1Q 2019, with lower average steel selling prices
-3.5% (with both flat and long products declining 3.5% and 3.7%,
respectively) offset in part by higher steel shipments, as
discussed above.
Impairment charges for 2Q 2019 and 1Q 2019 were $347 million and
$150 million, respectively, related to remedy asset sales related
to ArcelorMittal Italia. Impairment charges for 2Q 2018 were
nil.
Operating loss in 2Q 2019 was $301 million as compared to
operating income of $11 million in 1Q 2019 and $853 million in 2Q
2018. Operating results were impacted by impairment charges as
discussed above.
Despite seasonally higher steel shipments, EBITDA in 2Q 2019
decreased by -23.7% to $359 million as compared to $470 million in
1Q 2019 primarily due to a negative price-cost effect. EBITDA in 2Q
2019 decreased by -68.7% as compared to $1,145 million in 2Q 2018,
primarily due to negative price-cost effect, foreign exchange
impact, and continued losses of ArcelorMittal Italia. Assuming
existing market conditions and no ongoing license to operate
issues, an accelerated action plan has been implemented to
significantly reduce ArcelorMittal Italia losses by 4Q
2019.ACIS
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Sales |
1,906 |
|
1,645 |
|
2,129 |
|
3,551 |
|
4,209 |
|
|
Operating income |
114 |
|
64 |
|
312 |
|
178 |
|
602 |
|
|
Depreciation |
(85 |
) |
(81 |
) |
(85 |
) |
(166 |
) |
(158 |
) |
|
EBITDA |
199 |
|
145 |
|
397 |
|
344 |
|
760 |
|
|
Crude steel production (kt) |
3,252 |
|
3,323 |
|
3,087 |
|
6,575 |
|
6,487 |
|
|
Steel shipments (kt) |
3,182 |
|
2,662 |
|
3,057 |
|
5,844 |
|
6,086 |
|
|
Average steel selling price (US$/t) |
536 |
|
541 |
|
621 |
|
538 |
|
616 |
|
ACIS segment crude steel production in 2Q 2019 was broadly
stable at 3.3Mt as compared to 1Q 2019 primarily due to
normalization of production in Temirtau (Kazakhstan) following an
explosion at a gas pipeline in 4Q 2018 offset by lower production
in Ukraine due to planned blast furnace repair and in South Africa
following a scheduled maintenance.
Steel shipments in 2Q 2019 increased by 19.5% to 3.2Mt as
compared to 2.7Mt as at 1Q 2019, primarily due to the improved
shipments in all three regions particularly in Kazakhstan.
Sales in 2Q 2019 increased by 15.8% to $1.9 billion as compared
to $1.6 billion in 1Q 2019 primarily due to higher steel
shipments.
Operating income in 2Q 2019 was higher at $114 million as
compared to $64 million in 1Q 2019 and lower as compared to $312
million in 2Q 2018.
EBITDA in 2Q 2019 increased by 37.5% to $199 million as compared
to $145 million in 1Q 2019 primarily due to higher steel shipment
volumes. EBITDA in 2Q 2019 was 49.7% lower as compared to $397
million in 2Q 2018, primarily due to negative price-cost effect
partially offset by higher shipments.
Mining
|
(USDm) unless otherwise shown |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Sales |
1,423 |
|
1,127 |
|
1,065 |
|
2,550 |
|
2,089 |
|
|
Operating income |
457 |
|
313 |
|
198 |
|
770 |
|
440 |
|
|
Depreciation |
(113 |
) |
(107 |
) |
(107 |
) |
(220 |
) |
(214 |
) |
|
EBITDA |
570 |
|
420 |
|
305 |
|
990 |
|
654 |
|
|
|
|
|
|
|
|
|
Own iron ore production (Mt) |
14.6 |
|
14.1 |
|
14.5 |
|
28.7 |
|
29.1 |
|
|
Iron ore shipped externally and internally at market price (a)
(Mt) |
9.9 |
|
9.2 |
|
10.0 |
|
19.1 |
|
19.1 |
|
|
Iron ore shipment - cost plus basis (Mt) |
5.6 |
|
4.6 |
|
4.6 |
|
10.2 |
|
9.3 |
|
|
Own coal production (Mt) |
1.5 |
|
1.2 |
|
1.6 |
|
2.7 |
|
3.1 |
|
|
Coal shipped externally and internally at market price (a)
(Mt) |
0.7 |
|
0.7 |
|
0.7 |
|
1.4 |
|
1.1 |
|
|
Coal shipment - cost plus basis (Mt) |
0.7 |
|
0.7 |
|
0.9 |
|
1.4 |
|
1.8 |
|
(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 2Q 2019 increased by 4.0% to 14.6Mt
as compared to 14.1Mt in 1Q 2019, primarily due to seasonally
higher production in ArcelorMittal Mines Canada7 (AMMC). Own iron
ore production in 2Q 2019 increased by 1.2% as compared to 2Q 2018
primarily due to higher AMMC and Ukraine production offset in part
by lower production in Liberia and Kazakhstan and the Volcan mine
in Mexico which reached end of life in May 2019.
Market-priced iron ore shipments in 2Q 2019 increased by 7.7% to
9.9Mt as compared to 9.2Mt in 1Q 2019, primarily driven by
seasonally higher market-priced iron ore shipments in AMMC offset
in part by lower shipments in Liberia and at the Volcan mine in
Mexico (as discussed above). Market-priced iron ore shipments in 2Q
2019 were largely stable as compared to 2Q 2018 driven by higher
shipments in AMMC and Serra Azul offset by lower shipments in
Ukraine. Market-priced iron ore shipments for FY 2019 are expected
to be stable as compared to FY 2018 with increases in Liberia and
AMMC to be offset by lower volume at the Volcan mine.
Own coal production in 2Q 2019 increased by 18.1% to 1.5Mt as
compared to 1.2Mt in 1Q 2019 primarily due to higher production at
Princeton (US) and Temirtau (Kazakhstan). Own coal production in 2Q
2019 decreased by 9.0% as compared to 1.6Mt in 2Q 2018 due to lower
production at Temirtau (Kazakhstan).
Market-priced coal shipments in 2Q 2019 were stable at 0.7Mt as
compared to 1Q 2019 and 2Q 2018.
Operating income in 2Q 2019 increased by 46.2% to $457 million
as compared to $313 million in 1Q 2019 and $198 million in 2Q
2018.
EBITDA in 2Q 2019 increased by 35.8% to $570 million as compared
to $420 million in 1Q 2019, primarily due to the impact of higher
seaborne iron ore reference prices (+22.5%) and higher
market-priced iron ore shipments (+7.7%). EBITDA in 2Q 2019 was
86.7% higher as compared to $305 million in 2Q 2018, primarily due
to higher seaborne iron ore reference prices (+53.0%).
Liquidity and Capital Resources
For 2Q 2019 net cash provided by operating activities was $1,786
million as compared to $971 million in 1Q 2019 and $1,232 million
in 2Q 2018. The cash provided by operating activities during 2Q
2019 reflects in part a working capital release of $353 million as
compared to a working capital investment of $553 million in 1Q 2019
and a working capital investment of $1,232 million in 2Q 2018.
Due to a smaller than anticipated release in 4Q 2018, the Group
invested more in working capital than expected in 2018 ($4.4
billion versus guidance of $3.0-3.5 billion). The Group expects
this additional investment of approximately $1 billion to be
released in full over the course of 2019. The 1H 2019 working
capital investment of $0.2 billion was significantly less
pronounced than in previous years despite seasonally higher
shipments and higher raw material prices reflecting the Company’s
focus on the structural release of the excess working capital.
Given the 1H 2019 working capital investment of $0.2 billion this
implies a release of $1.2 billion in 2H 2019.
Net cash used in investing activities during 2Q 2019 was $564
million as compared to $693 million during 1Q 2019 and $556 million
in 2Q 2018. Capex decreased to $869 million in 2Q 2019 as compared
to $947 million in 1Q 2019 and increased as compared to $616
million in 2Q 2018. Whilst no significant delays to growth
investments are expected, the Company has reduced overall expected
capex across all segments in FY 2019 by $0.5 billion and now
expects FY 2019 capex to be $3.8 billion versus previous guidance
of $4.3 billion.
Net cash provided by other investing activities in 2Q 2019 of
$305 million primarily includes net proceeds from remedy asset
sales for the ArcelorMittal Italia acquisition of $0.5 billion,
offset by $0.1 billion partial reversal of the Indian rupee rolling
hedge (see below) and by the quarterly lease payment for the
ArcelorMittal Italia acquisition ($51 million). Net cash provided
by other investing activities in 1Q 2019 of $254 million primarily
includes $0.3 billion due 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, offset in part by the quarterly lease payment for the
ArcelorMittal Italia acquisition ($51 million).
Net cash provided by financing activities in 2Q 2019 was $180
million as compared to net cash used in financing activities of
$344 million in 1Q 2019 and net cash provided by financing
activities in 2Q 2018 of $352 million.
In 2Q 2019, net cash provided by financing activities included a
net inflow of $0.5 billion for new bank financing. In 1Q 2019, net
outflow of debt repayments and issuances of $136 million includes
$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; and
offset in part by $1.6 billion cash received from the issuance of
two new bonds (€750 million 2.25% notes due 2024 and $750 million
4.55% notes due 2026) and $0.2 billion commercial paper issuance.
Net cash provided by financing activities in 2Q 2018 of $352
million primarily includes proceeds from a $1 billion short-term
loan facility entered into on May 14, 2018 offset by repayment of a
€400 million ($491 million) bond at maturity on April 9, 2018.
During 2Q 2019, the Company paid dividends of $204 million
mainly to ArcelorMittal shareholders. During 1Q 2019, the Company
paid dividends of $46 million to minority shareholders in AMMC
(Canada). During 2Q 2018, the Company paid dividends of $101
million to ArcelorMittal shareholders. During 1Q 2019, the Company
completed its share buyback programme having repurchased 4 million
shares for a total value of $90 million (€80 million) at an
approximate average price per share of $22.42 (€19.89 per
share).
Outflows from lease principal payments and other financing
activities (net) were $84 million in 2Q 2019 as compared $72
million in 1Q 2019 and $21 million in 2Q 2018. The increase is as a
result of the first-time application of IFRS 16 effective from
January 1, 2019, as the repayments of the principal portion of the
operating leases are presented under financing activities
(previously reported under operating activities).
As of June 30, 2019, the Company’s cash and cash equivalents
amounted to $3.7 billion as compared to $2.2 billion at March 31,
2019 and $2.4 billion at December 31, 2018.
Gross debt increased to $13.8 billion as of June 30, 2019, as
compared to $13.4 billion at March 31, 2019 and $12.6 billion in
December 31, 2018. As of June 30, 2019, net debt decreased by $1.0
billion to $10.2 billion as compared to $11.2 billion as of March
31, 2019. Net debt as of December 31, 2018, was $10.2 billion.
As of June 30, 2019, the Company had liquidity of $9.2 billion,
consisting of cash and cash equivalents of $3.7 billion and $5.5
billion of available credit lines8. The $5.5 billion credit
facility contains a financial covenant not to exceed 4.25x Net debt
/ LTM EBITDA (as defined in the facility). As of June 30, 2019, the
average debt maturity was 4.7 years.
Key recent developments
- On May 6, 2019, ArcelorMittal announced its intention to
temporarily reduce annualized European primary steelmaking
production by 3Mt in the 2H 2019. These measures included
temporarily idling production at its steelmaking facilities in
Kraków, Poland and reduce production in Asturias, Spain as well as
the slow down at ArcelorMittal Italia following a decision to
optimise cost and quality over volume in this environment.
Furthermore, on May 29, 2019, the Company announced additional
steps to adjust its European production levels to the current
market demand by a further 1.2Mt to take total annualized
productions cuts to 4.2Mt in 2H 2019. These include:
- Reduce primary steelmaking production at its facilities in
Dunkirk, France and Eisenhüttenstadt, Germany;
- Reduce primary steelmaking production at its facility in
Bremen, Germany in the fourth quarter of this year, where a planned
blast furnace stoppage for repair works will be extended;
- Extend the stoppage planned in the fourth quarter of this year
to repair a blast furnace at its plant in Asturias, Spain.
ArcelorMittal stated that these
actions were taken in light of difficult operating conditions in
Europe with a combination of weakening demand, rising imports, high
energy costs and rising carbon costs.
- On May 29, 2019, ArcelorMittal published its first Climate
Action report in which it announced its ambition to significantly
reduce CO2 emissions globally and be carbon neutral in Europe by
2050. To achieve this goal the Company is building a strategic
roadmap linked to the evolution of public policy and developments
in low-emissions steelmaking technologies. A target to 2030 will be
launched in 2020, replacing the Company’s current target of an 8%
carbon footprint reduction by 2020, against a 2007 baseline. The
report explains in greater detail the future challenges and
opportunities for the steel industry, the plausible technology
pathways the Company is exploring as well as its views on the
policy environment required for the steel industry to succeed in
meeting the targets of the Paris Agreement.
- In June 2017, ArcelorMittal signed an agreement for the lease
(for a period up to August 2023) and subsequent acquisition of
Ilva’s business assets, providing for total maximum payments of EUR
1.8 billion. The lease period started on November 1, 2018.
According to the legal framework in force at the time of signing
and closing of the lease agreement, Ilva’s insolvency trustees, as
well as the lessee and purchaser of Ilva’s assets, were granted
protection from criminal liability related to environmental, health
and safety, and workplace security issues at Ilva’s Taranto plant,
pending the timely implementation of the EUR 1.15 billion
environmental investment program approved by the Italian Government
in September 2017. In September 2017 and then August 2018 the
Italian State Solicitor-General issued an opinion confirming that
the term of the protection coincided with the term of the Company’s
environmental plan, namely to August 23, 2023. On June 28, 2019,
however, the Italian Parliament ratified a law decree enacted by
the Government, which has removed the protection for criminal
liability related to public health and safety, and workplace
security matters and, as from September 7, 2019, will also remove
such protection as it relates to environmental matters.
ArcelorMittal considers that the removal of this protection could
impair any operator’s ability to operate the Taranto plant while
implementing the environmental plan. ArcelorMittal remains in
discussions with the Italian authorities on this matter, in view of
reaching before September 7, 2019 an appropriate solution
compatible with the continued operation of the Taranto plant. No
assurance can be given at this stage as to the outcome of such
discussions.In addition, on July 9, 2019 the public prosecutor of
Taranto ordered the shutdown of blast furnace No. 2 of the Taranto
plant. The order was in the context of a procedure dating from a
fatality in 2015, as a result of which the blast furnace was put
under seizure and improvements were required to be undertaken by
the Special Commissioners as a condition to the continued operation
of the blast furnace. The timeline of the shutdown of blast furnace
No. 2 remains to be determined and will be set forth in a plan the
judicial custodian appointed by the public prosecutor of Taranto is
currently preparing and whose implementation would take 60 days.
ArcelorMittal Italia is assessing technical aspects and is working
with the relevant authorities towards an acceptable solution so
that the blast furnace (which has an annual production target of
1.5 million tonnes) may remain operational.
- On July 1, 2019, ArcelorMittal announced the completion of the
sale to Liberty House Group (‘Liberty’) of several steelmaking
assets that form the divestment package the Company agreed with the
European Commission (‘EC’) during its merger control investigation
into the Company’s acquisition of Ilva S.p.A. The assets included
in the divestment package are: ArcelorMittal Ostrava (Czech
Republic), ArcelorMittal Galati (Romania), ArcelorMittal Skopje
(Macedonia), ArcelorMittal Piombino (Italy), ArcelorMittal
Dudelange (Luxembourg) and several finishing lines at ArcelorMittal
Liège (Belgium). The total net consideration (consisting of amounts
payable upon closing and subsequently in part contingent upon
certain criteria, net of EUR 110 million placed in escrow) for the
assets payable to ArcelorMittal is €740 million subject to
customary closing adjustments. Of this total amount, €610 million
was received on June 28, 2019. The Company has deposited €110
million in escrow to be used by Liberty for certain capital
expenditure projects to satisfy commitments given in the EC
approval process.
- On July 4, 2019, ArcelorMittal announced the completion of an
issuance of €250 million of its 2.250% notes due January 17, 2024
(the “Notes”), which will be consolidated and form a single series
with the existing €750 million 2.250 per cent. notes due January
17, 2024, originally issued on January 17, 2019. At the time of
pricing the “tap” issuance, the yield to maturity (representing the
actual annual cost of the issuance for ArcelorMittal) was 0.984%.
The issuance closed on July 4, 2019. The Notes were issued under
ArcelorMittal’s €10 billion wholesale Euro Medium Term Notes
Programme. The proceeds of the issuance will be used for general
corporate purposes.
- On July 4, 2019, the National Company Law Appellate Tribunal
(“NCLAT”) of India disposed of the various appeals pending before
it while approving the Company’s resolution plan for the
acquisition of Essar Steel India Limited (“ESIL”). Several appeals
have been filed before India’s Supreme Court challenging the
NCLAT’s order and on July 22, 2019, India’s Supreme Court further
stayed the implementation of the NCLAT’s order pending a hearing of
the appeals on August 7, 2019. The transaction closing is now
expected 3Q 2019.
- On July 11, 2019, ArcelorMittal completed the pricing of its
offering of US$750 million aggregate principal amount of its 3.600%
notes due 2024 (the “Series 2024 Notes”) and US$500 million
aggregate principal amount of its 4.250% notes due 2029 (the
“Series 2029 Notes”). The proceeds to ArcelorMittal (before
expenses), amounting to approximately $1.2 billion, will be used
for general corporate purposes including future repayment of
existing indebtedness and to partially pre-fund commitments under
the Essar acquisition financing facility. The issuance closed on
July 16, 2019.
- On July 30, 2019, ArcelorMittal announced that it has given
notice that it will redeem all of the outstanding 5.125% Notes due
June 1, 2020 and 5.250% Notes due August 5, 2020 on August 30,
2019. Following prior tender offers, there is currently the
following outstanding principal amount of 5.125% Notes and 5.250%
Notes, respectively: US$324,229,000 (original issuance of
US$500,000,000) and US$625,630,000 (original issuance of
US$1,000,000,000).
Outlook and guidanceBased on year-to-date
growth and the current economic outlook, ArcelorMittal expects
global apparent steel consumption (“ASC”) to grow further in 2019
by between +0.5% to +1.5% (slightly revised down from previous
expectation of +1.0% to +1.5% growth). By region:
ASC in US is expected to grow marginally by between +0.0% to
+1.0% in 2019, with healthy non-residential construction demand
offset by ongoing weakness in automotive demand and a slowdown in
machinery demand (a moderation of growth versus +0.5% to +1.5%
previous estimate). In Europe, ASC is expected to contract by
between -2.0% to -1.0% with ongoing automotive demand weakness
primarily due to lower exports (versus -1.0% to 0.0% previous
estimate). In Brazil, ASC growth in 2019 is forecasted in the
range of +1.5% to +2.5% (a moderation of growth versus +3.0% to
4.0% previous estimate) as domestic GDP has slowed, as well as
impacts of Argentinian recession and delayed growth in
infrastructure spend until pension reform is passed. In the CIS,
expected ASC growth is unchanged at +1.0% to +2.0% in 2019.
Overall, World ex-China ASC is expected to grow by approximately
+0.5% to +1.0% in 2019 (a moderation versus previous estimate of
+1.0% to +2.0%).In China, ASC growth forecast has increased to
between +0.5% to +1.5% in 2019 (versus previous estimate of +0.0%
to +1.0%) as real estate demand remains resilient.
The Group's steel shipments are expected to increase in 2019
versus 2018 due to these demand expectations, the positive scope
effect of the ArcelorMittal Italia and Votorantim acquisition (net
of the remedy assets sales for the ArcelorMittal Italia acquisition
now complete), the expectation that 2018 operational disruptions
(both controllable and uncontrollable) will not recur, offset in
part by European production curtailments.
Market-priced iron ore shipments for FY 2019 are expected to be
broadly stable as compared to FY 2018 with increases in Liberia and
AMMC to be offset by lower volume in Mexico (in part due to the end
of life of the Volcan mine).
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 be
approximately $5.4 billion in 2019 versus $6.4 billion previous
guidance. Whilst no significant delays to growth investments are
expected, the Company has reduced overall expected capex across all
segments in FY 2019 by $0.5 billion and now expects FY 2019 capex
to be $3.8 billion (versus previous guidance of $4.3 billion).
Interest expense in 2019 is expected to be $0.65 billion (no
change) while cash taxes, pensions and other cash costs are now
expected to be $1.0 billion (versus previous guidance of $1.5
billion).
As announced with the full year 2018 results in February 2019,
the $1 billion excess working capital accumulated in 2018 is
expected to be released in full over the course of 2019. Given the
1H 2019 working capital investment of $0.2 billion this implies a
release of $1.2 billion in 2H 2019.
The Company will continue to prioritize deleveraging and
believes that $7 billion (including impact of IFRS 16) is an
appropriate net debt target that will sustain investment grade
metrics even at the low point of the cycle.
ArcelorMittal intends to progressively increase the base
dividend paid to its shareholders, and, on attainment of the net
debt target, the Company is committed to returning a portion of
annual FCF to shareholders.
ArcelorMittal Condensed Consolidated Statement of
Financial Position1
|
In millions of U.S. dollars |
Jun 30,2019 |
Mar 31,2019 |
Dec 31,2018 |
| ASSETS |
|
|
|
| Cash and
cash equivalents |
3,656 |
|
2,246 |
|
2,354 |
|
| Trade
accounts receivable and other |
5,048 |
|
5,131 |
|
4,432 |
|
|
Inventories |
20,550 |
|
20,583 |
|
20,744 |
|
| Prepaid
expenses and other current assets |
3,123 |
|
3,000 |
|
2,834 |
|
| Assets
held for sale9 |
122 |
|
1,950 |
|
2,111 |
|
|
Total Current Assets |
32,499 |
|
32,910 |
|
32,475 |
|
|
|
|
|
|
| Goodwill
and intangible assets |
5,480 |
|
5,549 |
|
5,728 |
|
| Property,
plant and equipment |
36,725 |
|
36,647 |
|
35,638 |
|
|
Investments in associates and joint ventures |
5,026 |
|
5,000 |
|
4,906 |
|
| Deferred
tax assets |
8,412 |
|
8,318 |
|
8,287 |
|
| Other
assets |
4,224 |
|
4,236 |
|
4,215 |
|
|
Total Assets |
92,366 |
|
92,660 |
|
91,249 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Short-term debt and current portion of long-term debt |
3,107 |
|
2,739 |
|
3,167 |
|
| Trade
accounts payable and other |
14,418 |
|
14,232 |
|
13,981 |
|
| Accrued
expenses and other current liabilities |
5,549 |
|
5,699 |
|
5,486 |
|
|
Liabilities held for sale9 |
35 |
|
828 |
|
821 |
|
|
Total Current Liabilities |
23,109 |
|
23,498 |
|
23,455 |
|
|
|
|
|
|
| Long-term
debt, net of current portion |
10,723 |
|
10,591 |
|
9,316 |
|
| Deferred
tax liabilities |
2,284 |
|
2,337 |
|
2,374 |
|
| Other
long-term liabilities |
12,139 |
|
11,945 |
|
11,996 |
|
|
Total Liabilities |
48,255 |
|
48,371 |
|
47,141 |
|
|
|
|
|
|
| Equity
attributable to the equity holders of the parent |
42,033 |
|
42,286 |
|
42,086 |
|
|
Non-controlling interests |
2,078 |
|
2,003 |
|
2,022 |
|
|
Total Equity |
44,111 |
|
44,289 |
|
44,108 |
|
|
Total Liabilities and Shareholders’ Equity |
92,366 |
|
92,660 |
|
91,249 |
|
ArcelorMittal Condensed Consolidated Statement of
Operations1
|
|
Three months ended |
Six months ended |
|
In millions of U.S. dollars unless otherwise
shown |
Jun 30,2019 |
Mar 31,2019 |
Jun 30,2018 |
Jun 30,2019 |
Jun 30,2018 |
| Sales |
19,279 |
|
19,188 |
|
19,998 |
|
38,467 |
|
39,184 |
|
| Depreciation
(B) |
(766 |
) |
(733 |
) |
(712 |
) |
(1,499 |
) |
(1,423 |
) |
| Impairments
(B) |
(947 |
) |
(150 |
) |
— |
|
(1,097 |
) |
(86 |
) |
| Exceptional
items6 (B) |
— |
|
— |
|
— |
|
— |
|
(146 |
) |
|
Operating (loss) / income (A) |
(158 |
) |
769 |
|
2,361 |
|
611 |
|
3,930 |
|
| Operating
margin % |
(0.8 |
)% |
4.0 |
% |
11.8 |
% |
1.6 |
% |
10.0 |
% |
| |
|
|
|
|
|
| Income from
associates, joint ventures and other investments |
94 |
|
208 |
|
30 |
|
302 |
|
242 |
|
| Net interest
expense |
(154 |
) |
(161 |
) |
(159 |
) |
(315 |
) |
(323 |
) |
| Foreign
exchange and other net financing loss |
(173 |
) |
(231 |
) |
(390 |
) |
(404 |
) |
(564 |
) |
|
(Loss) / income before taxes and non-controlling
interests |
(391 |
) |
585 |
|
1,842 |
|
194 |
|
3,285 |
|
|
Current tax expense |
(225 |
) |
(180 |
) |
(240 |
) |
(405 |
) |
(524 |
) |
|
Deferred tax benefit |
211 |
|
45 |
|
259 |
|
256 |
|
340 |
|
| Income tax
(expense) / benefit |
(14 |
) |
(135 |
) |
19 |
|
(149 |
) |
(184 |
) |
|
(Loss) / income including non-controlling
interests |
(405 |
) |
450 |
|
1,861 |
|
45 |
|
3,101 |
|
|
Non-controlling interests (income) / loss |
(42 |
) |
(36 |
) |
4 |
|
(78 |
) |
(44 |
) |
| Net
(loss) / income attributable to equity holders of the
parent |
(447 |
) |
414 |
|
1,865 |
|
(33 |
) |
3,057 |
|
|
|
|
|
|
|
|
|
Basic (loss) / earnings per common share ($) |
(0.44 |
) |
0.41 |
|
1.84 |
|
(0.03 |
) |
3.01 |
|
|
Diluted (loss) / earnings per common share ($) |
(0.44 |
) |
0.41 |
|
1.83 |
|
(0.03 |
) |
2.99 |
|
| |
|
|
|
|
|
|
Weighted average common shares outstanding (in millions) |
1,014 |
|
1,014 |
|
1,013 |
|
1,013 |
|
1,016 |
|
|
Diluted weighted average common shares outstanding (in
millions) |
1,014 |
|
1,017 |
|
1,018 |
|
1,013 |
|
1,021 |
|
|
|
|
|
|
|
|
|
OTHER INFORMATION |
|
|
|
|
|
| EBITDA (C =
A-B) |
1,555 |
|
1,652 |
|
3,073 |
|
3,207 |
|
5,585 |
|
| EBITDA
Margin % |
8.1 |
% |
8.6 |
% |
15.4 |
% |
8.3 |
% |
14.3 |
% |
|
|
|
|
|
|
|
| Own iron ore
production (Mt) |
14.6 |
|
14.1 |
|
14.5 |
|
28.7 |
|
29.1 |
|
| Crude steel
production (Mt) |
23.8 |
|
24.1 |
|
23.2 |
|
47.8 |
|
46.5 |
|
|
Steel shipments (Mt) |
22.8 |
|
21.8 |
|
21.8 |
|
44.6 |
|
43.1 |
|
ArcelorMittal Condensed Consolidated Statement of Cash
flows1
|
|
Three months ended |
Six months ended |
|
In millions of U.S. dollars |
Jun 30,2019 |
Mar 31,2019 |
Jun 30,2018 |
Jun 30,2019 |
Jun 30,2018 |
| Operating
activities: |
|
|
|
|
|
|
(Loss)/income attributable to equity holders of the parent |
(447 |
) |
414 |
|
1,865 |
|
(33 |
) |
3,057 |
|
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
|
|
|
Non-controlling interests income/ (loss) |
42 |
|
36 |
|
(4 |
) |
78 |
|
44 |
|
|
Depreciation and impairments |
1,713 |
|
883 |
|
712 |
|
2,596 |
|
1,509 |
|
|
Exceptional items6 |
— |
|
— |
|
— |
|
— |
|
146 |
|
| Income
from associates, joint ventures and other investments |
(94 |
) |
(208 |
) |
(30 |
) |
(302 |
) |
(242 |
) |
| Deferred
tax benefit |
(211 |
) |
(45 |
) |
(259 |
) |
(256 |
) |
(340 |
) |
| Change in
working capital |
353 |
|
(553 |
) |
(1,232 |
) |
(200 |
) |
(3,101 |
) |
| Other
operating activities (net) |
430 |
|
444 |
|
180 |
|
874 |
|
319 |
|
|
Net cash provided by operating activities (A) |
1,786 |
|
971 |
|
1,232 |
|
2,757 |
|
1,392 |
|
|
Investing activities: |
|
|
|
|
|
| Purchase
of property, plant and equipment and intangibles (B) |
(869 |
) |
(947 |
) |
(616 |
) |
(1,816 |
) |
(1,368 |
) |
| Other
investing activities (net) |
305 |
|
254 |
|
60 |
|
559 |
|
136 |
|
|
Net cash used in investing activities |
(564 |
) |
(693 |
) |
(556 |
) |
(1,257 |
) |
(1,232 |
) |
|
Financing activities: |
|
|
|
|
|
| Net
proceeds / (payments) relating to payable to banks and long-term
debt |
468 |
|
(136 |
) |
474 |
|
332 |
|
737 |
|
| Dividends
paid |
(204 |
) |
(46 |
) |
(101 |
) |
(250 |
) |
(151 |
) |
| Share
buyback |
— |
|
(90 |
) |
— |
|
(90 |
) |
(226 |
) |
| Lease
payments and other financing activities (net) |
(84 |
) |
(72 |
) |
(21 |
) |
(156 |
) |
(41 |
) |
|
Net cash provided by / (used in) financing
activities |
180 |
|
(344 |
) |
352 |
|
(164 |
) |
319 |
|
| Net
increase / (decrease) in cash and cash equivalents |
1,402 |
|
(66 |
) |
1,028 |
|
1,336 |
|
479 |
|
| Cash and
cash equivalents transferred from/(to) assets held for sale |
21 |
|
(11 |
) |
(23 |
) |
10 |
|
(23 |
) |
|
Effect of exchange rate changes on cash |
17 |
|
(15 |
) |
(104 |
) |
2 |
|
(87 |
) |
|
Change in cash and cash equivalents |
1,440 |
|
(92 |
) |
901 |
|
1,348 |
|
369 |
|
| |
|
|
|
|
|
|
Free cash flow (C=A+B) |
917 |
|
24 |
|
616 |
|
941 |
|
24 |
|
Appendix 1: Product shipments by region
|
(000'kt) |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| Flat |
4,732 |
|
4,750 |
|
5,011 |
|
9,482 |
|
9,822 |
|
| Long |
873 |
|
721 |
|
969 |
|
1,594 |
|
1,890 |
|
|
NAFTA |
5,438 |
|
5,319 |
|
5,803 |
|
10,757 |
|
11,362 |
|
| Flat |
1,563 |
|
1,699 |
|
1,494 |
|
3,262 |
|
2,894 |
|
| Long |
1,236 |
|
1,194 |
|
1,345 |
|
2,430 |
|
2,440 |
|
|
Brazil |
2,785 |
|
2,880 |
|
2,831 |
|
5,665 |
|
5,314 |
|
| Flat |
8,824 |
|
8,647 |
|
7,553 |
|
17,471 |
|
15,257 |
|
| Long |
2,883 |
|
2,821 |
|
2,942 |
|
5,704 |
|
5,903 |
|
|
Europe |
11,811 |
|
11,553 |
|
10,516 |
|
23,364 |
|
21,213 |
|
| CIS |
2,064 |
|
1,617 |
|
1,861 |
|
3,681 |
|
3,727 |
|
| Africa |
1,113 |
|
1,049 |
|
1,199 |
|
2,162 |
|
2,366 |
|
|
ACIS |
3,182 |
|
2,662 |
|
3,057 |
|
5,844 |
|
6,086 |
|
Note: “Others and eliminations” are not presented in the
table
Appendix 2a: Capital expenditures
|
(USDm) |
2Q 19 |
1Q 19 |
2Q 18 |
1H 19 |
1H 18 |
| NAFTA |
144 |
|
182 |
|
110 |
|
326 |
|
270 |
|
|
Brazil |
80 |
|
84 |
|
36 |
|
164 |
|
83 |
|
|
Europe |
337 |
|
353 |
|
226 |
|
690 |
|
539 |
|
|
ACIS |
115 |
|
137 |
|
117 |
|
252 |
|
234 |
|
|
Mining |
125 |
|
115 |
|
119 |
|
240 |
|
226 |
|
|
Total |
869 |
|
947 |
|
616 |
|
1,816 |
|
1,368 |
|
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 |
|
NAFTA |
Indiana Harbor (US) |
Indiana Harbor “footprint optimization project” |
Restoration of 80” HSM and upgrades at Indiana Harbor
finishing |
4Q 2018 (a) |
Ongoing projects
|
Segment |
Site / unit |
Project |
Capacity / details |
Forecasted completion |
| ACIS |
ArcelorMittal
Kryvyi Rih (Ukraine) |
New LF&CC
2&3 |
Facilities
upgrade to switch from ingot to continuous caster route. Additional
billets of up to 290kt over ingot route through yield increase |
2019 |
|
Europe |
Sosnowiec (Poland) |
Modernization of Wire Rod Mill |
Upgrade rolling technology improving the mix of HAV products and
increase volume by 90kt |
2019 |
|
NAFTA |
Mexico |
New Hot strip mill |
Production capacity of 2.5Mt/year |
2020(b) |
|
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(c) |
|
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 |
2021(d) |
|
Brazil |
Juiz de Fora |
Melt shop expansion |
Increase in meltshop capacity by 0.2Mt/year |
On hold(e) |
|
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(e) |
|
Mining |
Liberia |
Phase 2 expansion project |
Increase production capacity to 15Mt/year |
Under review(f) |
- In support of the Company’s Action 2020 program, the footprint
optimization project at ArcelorMittal Indiana Harbor is now
complete, which has resulted in structural changes required to
improve asset and cost optimization. The plan involved idling
redundant operations including the #1 aluminize line, 84” hot strip
mill (HSM), and #5 continuous galvanizing line (CGL) and No.2 steel
shop (idled in 2Q 2017) whilst making further planned investments
totalling approximately $200 million including a new caster at No.3
steel shop (completed in 4Q 2016), restoration of the 80” hot strip
mill and Indiana Harbor finishing. The full project scope was
completed in 4Q 2018.
- On September 28, 2017, ArcelorMittal announced a major US$1
billion, three-year investment programme at its Mexican operations,
which is focussed on building ArcelorMittal Mexico’s downstream
capabilities, sustaining the competitiveness of its mining
operations and modernising its existing asset base. The programme
is designed to enable ArcelorMittal Mexico to meet the anticipated
increased demand requirements from domestic customers, realise 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 project commenced late 4Q 2017 and is expected to be completed
in 2020. Deep foundation essentially complete. Building erection
ongoing. Working with EPC consortium on productivity
improvements.
- Investment in ArcelorMittal Dofasco (Canada) to modernise 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. Engineering and
equipment manufacturing is complete. Construction activities for
coiler are on track. Runout table installation work originally
scheduled for April 2019 will be effectively carried out during
April 2020 shut down due to change in design and delay in
manufacturing. The project is expected to be completed in
2021.
- In August 2018, ArcelorMittal announced the resumption of the
Vega Do Sul expansion to provide an additional 700kt of cold-rolled
annealed and galvanised capacity to serve the growing domestic
market. The three-year ~$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.
- Although the Monlevade wire rod expansion project and Juiz de
Fora rebar expansion were completed in 2015, both projects are
currently on hold and are expected to be completed upon Brazil
domestic market recovery.
- 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
is currently conducting detailed engineering following the
feasibility study in order to be ready to progress to the next
stage of the project. The investment case will be assessed in 2H
2019.
Appendix 3: Debt repayment schedule as of June 30,
2019
|
(USD billion) |
2019 |
2020 |
2021 |
2022 |
2023 |
≥2024 |
Total |
|
Bonds |
— |
|
1.8 |
|
1.3 |
|
1.5 |
|
0.6 |
|
3.3 |
|
8.5 |
|
|
Commercial paper |
1.3 |
|
0.2 |
|
— |
|
— |
|
— |
|
— |
|
1.5 |
|
|
Other loans |
0.6 |
|
1.0 |
|
0.7 |
|
0.5 |
|
0.4 |
|
0.6 |
|
3.8 |
|
|
Total gross debt |
1.9 |
|
3.0 |
|
2.0 |
|
2.0 |
|
1.0 |
|
3.9 |
|
13.8 |
|
Appendix 4: Reconciliation of gross debt to net
debt
|
(USD million) |
Jun 30, 2019 |
Mar 31, 2019 |
Dec 31, 2018 |
| Gross
debt (excluding that held as part of the liabilities held for
sale) |
13,830 |
|
13,330 |
|
12,483 |
|
|
Gross debt held as part of the liabilities held for sale |
— |
|
96 |
|
77 |
|
|
Gross debt |
13,830 |
|
13,426 |
|
12,560 |
|
|
Less: |
|
|
|
|
Cash and cash equivalents |
(3,656 |
) |
(2,246 |
) |
(2,354 |
) |
|
Cash and cash equivalents held as part of the assets held for
sale |
— |
|
(21 |
) |
(10 |
) |
|
Net debt (including that held as part of the assets and the
liabilities held for sale) |
10,174 |
|
11,159 |
|
10,196 |
|
|
|
|
|
|
|
Net debt / LTM EBITDA |
— |
|
— |
|
1.0 |
|
Appendix 5: Terms and definitionsUnless
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:
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 income plus depreciation,
impairment expenses and exceptional income/
(charges).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) / gain: include foreign currency
exchange impact, bank fees, interest on pensions, impairments 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, plus short-term debt and IFRS 16
liabilities impact (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, plus short-term debt and IFRS 16
liabilities impact 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 last twelve
months (LTM) EBITDA calculation.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.PMI: refers to
purchasing managers index (based on ArcelorMittal
estimates)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 Group
EBITDA 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.YoY: refers to
year-on-year.
Footnotes
1. 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. 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 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 twelve months ended December 31, 2018, which investors may
find useful in understanding the company's ability to service its
debt. 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.2. Health and safety performance
inclusive of ArcelorMittal Italia and related facilities
(“ArcelorMittal Italia”) (consolidated as from November 1, 2018)
was 1.26x for 2Q 2019 and 1.14x for 1Q 2019. Health and safety
figures excluding ArcelorMittal Italia were 0.68x for 2Q 2019 as
compared to 0.66x for 1Q 2019. From 1Q 2019 onwards, the
methodology and metrics used to calculate health and safety figures
for ArcelorMittal Italia have been harmonized with those of
ArcelorMittal.3. Management performed its
quarterly analysis of impairment indicators, and a downward
revision of cash flow projections for ArcelorMittal USA resulted
from the weaker than anticipated operating environment in the US,
including lower than expected steel prices, lower ASC and high raw
material costs. Impairment charges for 2Q 2019 were $947
million related to the remedy asset sales for the ArcelorMittal
Italia acquisition ($347 million) and impairment of the fixed
assets of ArcelorMittal USA ($600 million) following a sharp
decline in steel prices and high raw material costs. Impairment
charges for 1H 2019 were $1.1 billion related to the remedy asset
sales for the ArcelorMittal Italia acquisition ($0.5 billion) and
impairment of the fixed assets of ArcelorMittal USA ($0.6 billion)
following a sharp decline in steel prices and high raw material
costs. 4. ArcelorMittal has applied IFRS 16
Leases as of January 1, 2019. Due to the transition option
selected, the prior-period data has not been restated. IFRS 16
Leases provides a single lessee accounting model requiring lessees
to recognize right-of-use assets and lease liabilities for all
non-cancellable leases except for short-term leases and low value
assets. The right-of-use assets are recognized as property, plant
and equipment and measured on January 1, 2019 at an amount equal to
the lease liability recognized as debt (short term $0.3 billion and
long term $0.9 billion impact as of January 1, 2019) and measured
on the basis of the net present value of remaining lease payments.
On January 1, 2019 net debt increased accordingly by $1.2 billion
following the adoption of IFRS 16 lease standard. The recognition
of the lease expense in EBITDA for leases previously accounted for
as operating leases is replaced by a depreciation expense related
to the right-of-use assets and an interest expense reflecting the
amortization of the lease liability. In addition, cash payments
relating to the repayment of the principal amount of the lease
liability are presented in the consolidated statements of cash
flows as outflows from financing activities while lease payments
for operating leases were previously recognized as outflows from
operating activities.5. On April 20, 2018,
following the approval by the Brazilian antitrust authority - CADE
of the combination of ArcelorMittal Brasil’s and Votorantim’s long
steel businesses in Brazil subject to the fulfilment of divestment
commitments, ArcelorMittal Brasil agreed to dispose of its two
production sites of Cariacica and Itaúna, as well as some wire
drawing equipment of ArcelorMittal Brasil and ArcelorMittal
Sul-Fluminense. The sale was completed early May 2018 to the
Mexican Group Simec S.A.B. de CV. A second package of some wire
drawing equipment of ArcelorMittal Brasil and ArcelorMittal
Sul-Fluminense was sold to the company Aço Verde do Brasil as part
of CADE's conditional approval.6. In July
2018, as a result of a settlement process, the Company and the
German Federal Cartel Office agreed to a €118 million ($146
million) fine to be paid by ArcelorMittal Commercial Long
Deutschland GmbH ending an investigation that began in the first
half of 2016 into antitrust violations concerning the ArcelorMittal
entities that were under investigation. The payment was made in
August 2018.7. ArcelorMittal Mines Canada,
otherwise known as ArcelorMittal Mines and Infrastructure
Canada.8. 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 (i.e.
the options to extend are in the first and second years, so at end
2019 and at end 2020). The facility replaced the $5,500,000,000
revolving credit facility agreement signed April 30, 2015 and
amended December 21, 2016 and will be used for the general
corporate purposes of the ArcelorMittal group. The facility gives
ArcelorMittal considerably improved terms over the former facility,
and extends the average maturity date by approximately three years.
As of June 30, 2019, the $5.5 billion revolving credit facility was
fully available.9. Assets and liabilities
held for sale, as of June 30, 2019 are related to the carrying
value of the USA long product facilities at Steelton (“Steelton”).
Assets and liabilities held for sale, as of March 31, 2019 and
December 31, 2018, include the ArcelorMittal Italia remedy package
assets (as previously disclosed in the 1Q 2018 earnings release),
and the USA long product facilities at Steelton.
Second quarter 2019 earnings analyst conference
call
ArcelorMittal will hold a conference call hosted
by Mr. Lakshmi Mittal, Chairman and CEO and Aditya Mittal,
President and CFO to discuss the three month and six-month period
ended June 30, 2019 on: Thursday August 1, 2019 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: |
0800 0515
931 |
+44 (0)203 364
5807 |
81958122# |
|
US local: |
1 86 6719 2729 |
+1 24 0645 0345 |
81958122# |
|
France: |
0800 914780 |
+33 1 7071 2916 |
81958122# |
|
Germany: |
0800 965 6288 |
+49 692 7134 0801 |
81958122# |
|
Spain: |
90 099 4930 |
+34 911 143436 |
81958122# |
|
Luxembourg: |
800 26908 |
+352 27 86 05 07 |
81958122# |
| A
replay of the conference call will be available for one week by
dialling: +49 (0) 1805 2047 088; Access code 2524123# |
Forward-Looking StatementsThis 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 ArcelorMittalArcelorMittal 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 2018, ArcelorMittal
had revenues of $76.0 billion and crude steel production of 92.5
million metric tonnes, while own iron ore production reached 58.5
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:
Europe: +44 207 543 1128; Americas: +1 312 899 3985; 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 second quarter 2019 and half year 2019
results
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