reporting a net loss in the first quarter of 2020 of $1.12 billion or $1.11
loss per common share, compared to a net loss in the fourth quarter of 2019
of $1.88 billion or $1.86 and a net income in the year-ago period of $414
million or 41 cents.
The company is also
reporting improved operation results: a loss of $353 in 1Q, compared to a
loss of $1.53 billion in 4Q.
operating performance in the first quarter has been considerably
overshadowed by the COVID-19 crisis,” ArcelorMittal Chair and CEO Lakshmi
Mittal said in a statement released today. “Faced with a significant
humanitarian challenge, the company’s first priority has been to take all
the necessary actions to safeguard the well-being 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 temporarily 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,” Mittal said. “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 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,”
Mittal added. “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
"I am particularly
grateful for the commitment shown by our teams in these recent weeks,”
Mittal concluded. “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 a way quite
unconnected with steelmaking, for example in the design of 3-D printers and
ventilators. Together we will continue to navigate these extraordinary times
and ensure that ArcelorMittal is able to secure the well-being of its people
and its position as the world’s leading steel company.”
Steel shipments for
2Q are expected to be in the range of 13.5 to 14.5 million net tons.
The actions taken
to reduce all costs with reduced operating rates are expected to yield a
reduction in fixed costs of 25 to 30 percent in 2Q.
Cash needs in 2020
are expected to be approximately $3.5 billion, compared to the previous
guidance of $4.5 billion, due to lower planned capital investment and lower
The company still
expects to release the previously targeted $1 billion in working capital.
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,” the company said.
-- Sales: $14.8
billion ($15.5 billion 4Q, $19.1 billion year-ago).
-- Operating loss:
$353 million ($1.5 billion 4Q, operating income $769 million year-ago).
-- Crude steel
production: 21.1 million net tons (19.8 million 4Q, 24.1 million year-ago).
-- Steel shipments:
19.5 million net tons (19.7 million 4Q, 21.8 million year-ago).