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ArcelorMittal – MT – Focus remains on further improving competitiveness and reducing debt

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ArcelorMittal (NYSE:MT), the world’s leading steel company, announced results for the three and six month periods ended June 30, 2012.

MT Highlights:

  • MT Health and safety performance improved in 2Q 2012 with a LTIF rate of 0.8x as compared to 1.1x in 1Q 2012
  • MT – EBITDA of $2.4 billion in 2Q 2012 (including positive $0.3 billion of gains on subsidiary divestments), compared to $2.0 billion in 1Q 2012 (including positive $0.2 billion from employee benefit changes); EBITDA of $4.4 billion reported in 1H 2012 as compared to $4.1 billion in 2H 2011
  • Steel shipments of 21.7 Mt in 2Q 2012, a decrease of 2.5% as compared to 1Q 2012
  • 2Q 2012 iron ore production of 14.4 Mt, up +9.9% YoY; 8.2 Mt shipped and reported at market price, up +17.4% YoY
  • Net debt reduced by $1.6 billion during 2Q 2012 to $22.0 billion, driven by improved free cash flow from operations of $1.1 billion, Skyline Steel divestment proceeds of $0.7 billion and foreign exchange impacts
  • Liquidity decreased marginally to $14.8 billion from $15.2 billion at end 1Q 2012; average debt maturity at 6.4 years

MT Outlook and guidance:


  • Group EBITDA per tonne for the 2H 2012 is expected to be similar to the underlying 1H 2012 level
  • Steel shipments in 2H 2012 are expected to be lower than 1H 2012 levels due to normal seasonal factors
  • Iron ore shipments remain on track to increase by approximately 10% in FY 2012 compared to FY 2011
  • A further reduction in net debt is targeted by end 2012 but is dependent on further divestments. The Company remains committed to retaining its investment grade credit rating.
  • 2012 capex is expected to be approximately $4.5 billion; ArcelorMittal Mines Canada expansion to 24mtpa on track for ramp up during 1H 2013

Commenting, Mr. Lakshmi N. Mittal, Chairman and CEO, ArcelorMittal, said “Market conditions in the first half have been very challenging, indeed more challenging than we had expected due to a combination of factors, not least the still unresolved crisis in the eurozone.  Against this backdrop the company has delivered a creditable performance, continuing to make progress on the divestment of non-core assets, and reducing net debt below the half year target.  Although the global economy remains fragile, we expect operating conditions to remain broadly similar in the second half.  Europe remains our biggest concern and the severity of the situation is reflected in the performance of our European operations.  Our focus throughout the remainder of the year remains on further improving competitiveness and reducing debt.”

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edliston
Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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