ArcelorMittal Europe reports €122m operating profit for Q4 2014

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Overig advies 13/02/2015 07:46
Luxembourg, 13 February 2015 - ArcelorMittal Europe today announced its results for the fourth quarter ended 31 December 2014. The segment recorded an operating profit of €122m compared with an operating loss of €396m for Q4 2013.

ArcelorMittal Europe has reported an operating profit in all four quarters of 2014, with the business realising the benefits of its cost optimisation measures, lower input costs and better margins due to improved steel market conditions and a stronger focus on new and specialised products.

Fourth quarter 2014 Ebitda increased by 12.4%, to €443m compared with €394m in the previous three months of the year. Ebitda in Q4 2014 was also 46.7% higher than in the same quarter of 2013. Full year Ebitda for 2014 was €1730m compared to €1227m for 2013.

Steel shipments in Q4 2014 were 9.6 million tonnes; a decrease of 2.2% compared with the previous quarter, on account of operational issues in some sites and lower exports for the quarter. Year-on-year, shipments for the fourth quarter rose as a result of improved domestic demand.

Sales in the ArcelorMittal Europe segment decreased by 1.3% to €7.2bn this quarter, compared with €7.3bn in the third quarter. This was primarily due to lower shipments.

Commenting, Aditya Mittal, CEO ArcelorMittal Europe, said:

“I am pleased to be able to report the fourth consecutive quarterly profit for ArcelorMittal Europe, as well as a 41% year-on-year increase in Ebitda. This Ebitda rise shows the expansion in our steel margins thanks to lower costs, which are the result of our cost optimisation efforts and improved market conditions. For 2015, we are forecasting steel demand growth of 1.5 to 2.5%, for Europe, with the effects of a weak Euro and low oil prices helping to boost confidence within the Eurozone”.

There is likely to be a pickup in European GDP in 2015 however political and economical uncertainties in the region remain. The Eurozone economic recovery has struggled to gain momentum, with the PMI index around 50 and deflation which is likely to persist for much of 2015 given the oil price outlook. However the European Central Bank’s quantitative easing measures are expected to improve confidence, to some extent offsetting deflation in the Eurozone.

Luxembourg, February 13, 2015 - 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 twelve-month periods ended December 31, 2014.

Highlights:
Health and safety performance remained stable in FY 2014 with annual LTIF rate of 0.85x
FY 2014 EBITDA of $7.2 billion, 8.5% higher than FY 2013 on an underlying basis[2]; underlying steel-only EBITDA/t up 23.6% or $14/t versus FY 2013
4Q 2014 EBITDA of $1.8 billion; notable improvements versus 4Q 2013 in Europe (+36.6%) and ACIS (+173.6%) segments were more than offset by the negative impact of iron ore prices on the Mining segment (-73.7%)[3] on an underlying basis
FY 2014 net loss of $1.1 billion as compared to FY 2013 net loss of $2.5 billion. Excluding China Oriental impairment ($0.6 billion), other impairments and other non-recurring items, net income would have been positive in FY 2014
Free cash flow positive in FY 2014; $3.9 billion of cash flow from operations and capital expenditure of $3.7 billion
Net debt lower at $15.8 billion as of December 31, 2014 as compared to $17.8 billion as of September 30, 2014 due largely to working capital release of $1.0 billion, asset disposal proceeds of $0.6 billion and forex impacts of $0.2 billion
FY 2014 steel shipments of 85.1Mt (+3.0 YoY); 4Q 2014 steel shipments of 21.2Mt up +3.4% versus 4Q 2013
FY 2014 iron ore shipments of 63.7Mt (+6.9% YoY), of which 39.8Mt shipped at market prices (+13.2% YoY); 4Q 2014 iron ore shipments of 16.3Mt (-1.4% YoY), of which 9.9Mt shipped at market prices (-3.4% YoY)
Annualized management gains improvement of $2.1 billion achieved at end of 2014. On course to reach $3 billion target by the end of 2015
Dividend maintained at $0.20/share, subject to shareholders’ approval

Strategic progress in 2014:

The Company has made notable progress on its strategic objectives during 2014, including:
Increased steel volumes by 3% given improved demand in its core steel markets
Expanded steel margins by $14/t through continued focus on cost optimization: leveraging benefits of European restructuring, improved performance of ACIS operations as well as lower raw material costs
Expanded mining volumes (including a 4Q 2014 annualized production rate of 26Mt at ArcelorMittal Mines Canada (AMMC)) whilst further reducing mining costs (4Q 2014 AMMC concentrate unit cost 25% lower than FY 2013 average)
Further developed its automotive steel franchise including new capacity (Calvert, VAMA) and new product launches
Net debt declined to its lowest level since the ArcelorMittal merger which together with lower average cost of debt reduced net interest expense by $0.3 billion

Outlook and guidance:
The Company expects Group EBITDA to be within the range of $6.5 billion to $7 billion for 2015
Steel segments: Overall, steel markets continue to grow, in particular for our high value-added products; a forecast 4-5% increase in shipment volumes (approximately half of which follows the Newcastle reline completion and full year impact of the restart of BF#3 in Tubarao, Brazil) together with improved cost performance are expected to offset the impact of lower transaction prices and the impacts of translation
Mining segment: Assuming current market conditions, in excess of one-third of the impact of lower iron ore prices on revenues will be offset by improved cost performance including the benefits of foreign exchange, energy and freight as well as higher volumes
Additionally, the Company expects net interest expense to decline to approximately $1.4 billion and capital expenditure to decline to approximately $3.4 billion in 2015
As a result, at the bottom end of the guidance range the Company would expect to be free cash flow positive. While net debt is expected to follow a normal seasonal pattern, overall progress towards the medium term net debt target of $15 billion is anticipated during the course of 2015

Financial highlights (on the basis of IFRS[1]):
(USDm) unless otherwise shown
4Q 14 3Q 14 4Q 13 2H 14 1H 14 2H 13 12M 14 12M 13
Sales 18,723 20,067 19,848 38,790 40,492 39,491 79,282 79,440
EBITDA 1,815 1,905 1,910 3,720 3,517 3,623 7,237 6,888
Operating income / (loss) 569 959 (36) 1,528 1,506 441 3,034 1,197
Net income / (loss) attributable to equity holders of the parent (955) 22 (1,227) (933) (153) (1,420) (1,086) (2,545)
Basic earnings / (loss) per share (USD) (0.53) 0.01 (0.69) (0.52) (0.09)(0.81)
(0.61) (1.46)

Own iron ore production (Mt) 16.7 15.8 15.4 32.5 31.4 30.3 63.9 58.4
Iron ore shipped at market price (Mt) 9.9 10.0 10.3 19.9 19.8 19.7 39.8 35.1
Crude steel production (Mt) 23.2 23.9 23.0 47.1 46.1 46.2 93.1 91.2
Steel shipments (Mt) 21.2 21.5 20.5 42.7 42.4 41.2 85.1 82.6
EBITDA/tonne (US$/t) 86 89 93 87 83 88 85 83


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

“Stronger steel demand, particularly in our core markets of Europe and the US, drove an 8.5% improvement in 2014 underlying EBITDA, despite the lower iron-ore price. The business benefited from a 3% increase in steel shipments, an increase in marketable iron-ore shipments, and the result of cost optimization and restructuring efforts. Net debt reached $15.8 billion, the lowest level since the onset of the economic crisis, demonstrating continued progress towards our medium term target of $15.0 billion. For 2015, although operating conditions remain tough we expect steel markets to continue to improve, particularly for high value-added products such as automotive, where ArcelorMittal is a world leader.”


zie voor meer op
http://corporate.arcelormittal.com/news-and-media/press-releases/2015/feb/13-02-2015



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