ArcelorMittal reports second quarter 2016 and half year 2016 results

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29/07/2016 08:41
Luxembourg, July 29, 2016 - 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 results[1] for the three and six month periods ended June 30, 2016.

Highlights:
Health and safety: LTIF rate of 0.79x in 2Q 2016 as compared to 0.72x in 1Q 2016 and 0.68x in 2Q 2015
EBITDA of $1.8 billion in 2Q 2016, nearly double as compared to $0.9 billion in 1Q 2016; 26.5% higher YoY
Operating income of $1.9 billion in 2Q 2016 higher as compared to $0.3 billion in 1Q 2016, primarily as a result of one-time gain from employee benefits at ArcelorMittal USA[2] ($0.8 billion) and higher sales driven by improved steel selling prices
Net income of $1.1 billion in 2Q 2016 (including one-time $0.8 billion gain from employee benefits at ArcelorMittal USA) as compared to a net loss of $0.4 billion in 1Q 2016 and net income of $0.2 billion in 2Q 2015
Steel shipments of 22.1Mt in 2Q 2016, an increase of 2.9% as compared to 1Q 2016; stable YoY
Gross debt decreased to $15.1 billion at June 30, 2016, as compared to $20.2 billion at March 31, 2016
Net debt decreased to $12.7 billion as of June 30, 2016, as compared to $17.3 billion at March 31, 2016 mainly due to proceeds from the rights issue ($3.1 billion), asset sales ($1.1 billion), working capital release ($0.2 billion) offset in part by $0.2 billion premium on early repayment of debt

Key developments:
Action 2020: United Steelworkers (USW) union deal has been ratified by members and ArcelorMittal USA is now progressing with a “footprint optimization project” at its Indiana Harbor steelmaking complex in East Chicago, Indiana
Automotive: ArcelorMittal announces its intention to further expand its portfolio of automotive steel by launching two new products in 2017, Usibor® 2000 and Ductibor® 1000

Outlook and guidance:
Despite the steel spread recovery losing momentum in recent weeks, the impact of lagged prices will be an important support for operating results as we move into a period of seasonally slower steel demand
Improved market conditions are likely to consume working capital in 2016 (current estimate of ~$0.5 billion); the Company nevertheless expects cash flows from operating activities to exceed capex in 2016

Financial highlights (on the basis of IFRS[1]):

(USDm) unless otherwise shown

2Q 16 1Q 16 2Q 15 1H 16 1H 15

Sales 14,743 13,399 16,890 28,142 34,008
Operating income 1,873 275 579 2,148 1,150
Net income/(loss) attributable to equity holders of the parent 1,112 (416) 179 696 (549)
Basic earnings/(loss) per share (US$) 0.38 (0.23) 0.10 0.29 (0.31)
Operating income/tonne (US$/t) 85 13 26 49 26
EBITDA 1,770 927 1,399 2,697 2,777
EBITDA/ tonne (US$/t) 80 43 63 62 63
Steel-only EBITDA/ tonne (US$/t) 73 39 58 56 58
Crude steel production (Mt) 23.1 23.2 24.0 46.3 47.8
Steel shipments (Mt) 22.1 21.5 22.2 43.6 43.8
Own iron ore production (Mt) 13.5 14.1 16.4 27.6 31.9
Iron ore shipped at market price (Mt) 9.6 7.8 10.8 17.4 20.1

Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, said:

“ArcelorMittal enjoyed a stronger second quarter due largely to a more supportive pricing environment in our leading markets. Sales and EBITDA increased in all segments, including mining. We also significantly strengthened our balance sheet with proceeds from the rights issue, the Gestamp sale and working capital release reducing net debt to $12.7 billion.

The company continues to focus on the implementation of our strategic initiatives, in particular Action 2020, to support profitability. Although the industry continues to face the challenges of structural overcapacity, we are seeing better market conditions compared with the second half of 2015 which lead us to be cautiously optimistic about the remainder of the year.”

tijd 09.00
De AEX 448.90 +1,08 +0,24% Arcelor EUR 5,709 +27ct vol. 1,6 milj.



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