ArcelorMittal reports second quarter 2020 and half year 2020 results
by David Fleschen
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 results1 for the three-month and six-month periods ended June 30, 2020:
- 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 $0.3bn in 2Q 2020 includes $0.2bn exceptional items (1H 2020 operating loss of $0.6bn includes $0.8bn impairment and exceptional items3)
- EBITDA of $0.7bn in 2Q 2020 (1H 2020 EBITDA of $1.7bn)
- Net loss of $0.6bn in 2Q 2020 (1H 2020 net loss of $1.7bn, with adjusted net loss of $0.9bn excluding impairment and exceptional items)
- Free cash outflow was limited to $0.4bn (net cash provided by operating activities of $0.9bn less $1.3bn capex) in 1H 2020 and included a working capital investment of $0.5bn
- Gross debt of $13.5bn and net debt of $7.8bn as of June 30, 2020 (down $2.3bn vs June 30, 2019) the lowest level achieved since the ArcelorMittal merger
- Liquidity at the end of 2Q 2020 stood at $11.2bn (consisting of cash and cash equivalents of $5.7bn and $5.5bn of available credit lines)
Commenting, Mr. Lakshmi N. Mittal, ArcelorMittal Chairman and CEO, 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."
“It has also become clear in recent months that governments around the world will align efforts to stimulate the economic recovery with the transition to a low carbon economy. ArcelorMittal recently published its roadmap to reduce emissions by 30% in Europe by 2030 and we were encouraged to see last week’s proposal by the European Council to introduce a carbon border adjustment. Technologically we know that it should be possible to produce carbon neutral steel, but success is co-dependent on policy, of which the carbon border adjustment is an important component, as is access to EU funds."
“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.”
Source: ArcelorMittal, Photo: Fotolia