Chesterton Tribune



ArcelorMittal posts net loss of 447 million

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ArcelorMittal is reporting a net loss in the second quarter of 2019 of $447 million or 44 cents basic earning per common share, compared to a net income in the first quarter of $414 million or 41 cents, and a net income in the year-ago period of $1.865 billion or $1.84.

“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,” Arcelor Chair and CEO Lakshmi Mittal said in a statement released today. “This has been only partially offset by improved profitability from our mining segment, but I am pleased that we have generated healthy cash flow demonstrating the improved robustness of the business thanks to our Action 2020 plan.”

Lakshmi specifically blamed global overcapacity and imports into Europe for the softening market. “Global overcapacity remains a clear challenge,” he said. “We have reduced capacity in Europe in response to the current weak demand environment, which has also impact the turnaround of the ex-IIva facilities in Italy. Further action needs to be taken to address the 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,” Mittal added. “Despite the current challenges, the company is well positioned to benefit from any improvement in market conditions and the current very low spread environment.”

In response to current market conditions, ArcelorMittal previously announced production curtailments in Europe, with approximately 4.2 million metric tons of annualized production curtailment scheduled for the second half of 2019. The company did say that its cash needs for the year have been reduced by $1 billion, to $5.4 billion, due to lower expected capital expenditures and taxes. Net debt on June 30 was also “the lowest level achieved since the ArcelorMittal merger,” and “deleveraging remains the group’s priority.”

2Q Numbers

--Sales: $19.27 billion ($19.18 billion 1Q, $19.99 billion year-ago).

--EBITDA (earnings before interest, taxes, depreciation, and amortization): $1.55 billion ($1.65 billion 1Q, $3.07 billion year-ago).

--Operating loss: $158 million (operating income $769 million 1Q, operating income $2.36 billion year-ago).

--Operating loss per ton: $7 (operating income per ton $35 1Q, operating income per ton $109 year-ago).

--Shipments: 22.8 million metric tons (21.8 million 1Q, 21.8 million year-ago).

--Crude steel production: 23.8 million metric tons (24.1 million 1Q, 23.2 million year-ago).




Posted 8/1/2019




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