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ArcelorMittal Reports Second Quarter & Half Year 2020 Results

Steel News - Published on Fri, 31 Jul 2020

Image Source: ArcelorMittal
ArcelorMittal announced results for the three-month and six-month periods ended June 30, 2020. ArcelorMittal Chairman and CEO Mr Lakshmi N Mittal said “The first six months of the year, and particularly the second quarter, have been one of the most difficult periods in the history of the Company, with demand for steel considerably disrupted by the COVID-19 pandemic. I would like to thank our employees across the globe, who have demonstrated great resilience and strength of character to first look out for one another and then maintain operations to meet customer demand in these most challenging of environments. As a group we responded swiftly to protect our people, assets, profitability and cashflow, ensuring the Company is in as strong a position as possible to weather this very challenging period. We implemented a comprehensive range of measures that include reducing production, capex and fixed costs, as well as raising capital to further strengthen the balance sheet which has taken our net debt close to the level at which we will prioritize returns to shareholders. There are now signs of activity picking up, especially in regions where lockdowns have ended, but clearly it is prudent to remain cautious about the outlook. Against this context, we are examining what structural changes might be required to ensure the Company is well configured to prosper in the coming years as demand recovers. In conclusion, it has been an unexpectedly challenging period for everyone. The remainder of the year will no doubt continue to be challenging but I believe we are well prepared to increase production and capture the improvement in demand when it comes.”

Highlights

Operating performance in 2Q 2020 reflects the negative impact of the COVID-19 pandemic primarily on the steel business, with reduced demand leading to a 23.7% sequential reduction in steel shipments (1H 2020 shipments 23% lower YoY)

Operating loss of USD 0.3 billion in 2Q 2020 includes USD 0.2 billion exceptional items (1H 2020 operating loss of USD 0.6 billionn includes USD 0.8 billion impairment and exceptional items3)

EBITDA of USD 0.7 billion in 2Q 2020 (1H 2020 EBITDA of USD 1.7 billion)

Net loss of USD 0.6 billion in 2Q 2020 (1H 2020 net loss of USD 1.7 billion, with adjusted net loss of USD 0.9 billion excluding impairment and exceptional items

Financial Highlights
(USDm) unless otherwise shown2Q 201Q 20QoQ2Q 19YoY1H 201H 19YoY
Sales10,97614,844-26%19,279-43%25,82038,467-33%
Operating (loss) / income-253-353-28%-15860%-606611-199%
Net loss attributable to equity holders of the parent-559-1,120-50%-44725%-1,679-334988%
Basic loss per common share (US$)-0.5-1.11-55%-0.4414%-1.57-0.035133%
Operating (loss) / income / tonne (US$/t)-17-18-6%-7143%-1814-229%
EBITDA707967-27%1,555-55%1,6743,207-48%
EBITDA/ tonne (US$/t)4850-4%68-29%4972-32%
Steel-only EBITDA/ tonne (US$/t)2134-38%43-51%2950-42%
Crude steel production (Mt)14.421.1-32%23.8-39%35.547.8-26%
Steel shipments (Mt)14.819.5-24%22.8-35%34.344.6-23%
Own iron ore production (Mt)13.514.4-6%14.6-8%27.928.7-3%
Iron ore shipped at market price (Mt)9.28.67%9.9-7%17.819.1-7%
 


Outlook - While the speed and trajectory of the demand recovery post the COVID-19 pandemic remain uncertain, ArcelorMittal’s core markets are showing signs of recovery from exceptionally low levels. The Company will continue to align production levels to demand, with the ability and flexibility to restart hot idled capacity as the recovery progresses. Against the exceptional operating backdrop, the Company has taken a comprehensive series of actions to reduce all costs to protect profitability and cash flows. While these actions will continue, the Company is now developing its options for structural cost improvements to appropriately position the fixed cost base for the post COVID-19 operating environment, with more details to be announced with full year results

Source :

Posted By : Yogender Pancholi on Fri, 31 Jul 2020
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