Highlights
Health and safety: Protecting the health and wellbeing of employees
remains the Company’s overarching priority; LTIF rate2 of 0.77x in 2Q
2020 and 0.91x in 1H 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
items3 (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 items3)
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 lines5)
Outlook
While the speed and trajectory of the demand recovery post the COVID-19
pandemic remain uncertain, ArcelorMittal’s core markets are showing
signs of recovery from exceptionally low levels
The Company will continue to align production levels to demand, with the
ability and flexibility to restart hot idled capacity as the recovery
progresses
Against the exceptional operating backdrop, the Company has taken a
comprehensive series of actions to reduce all costs to protect
profitability and cash flows. While these actions will continue, the
Company is now developing its options for structural cost improvements
to appropriately position the fixed cost base for the post COVID-19
operating environment, with more details to be announced with full year
results
The Company continues to expect certain cash needs of the business to be
approximately $3.5bn in 2020 and remains focused on its FY 2020 $1bn
working capital efficiency target
Achievement of its $7bn net debt objective remains a priority, at which
point the Company expects its capital allocation focus to shift from
deleveraging towards cash returns to shareholders
The Company’s $2bn asset portfolio optimization program continues to
progress, and with suitable and viable buyers having expressed serious
interest in certain assets, the Company remains confident in completing
the program by mid-2021
The Company’s European climate action report detailed the Smart Carbon
and an Innovative DRI-based technology routes to reduce the European
business carbon emissions by a targeted 30% by 2030 before reaching net
zero in 2050
Financial highlights (on the basis of IFRS [1]):
(USDm) unless otherwise shown |
2Q 20 |
1Q 20 |
2Q 19 |
1H 20 |
1H 19 |
Sales |
10,976 |
14,844 |
19,279 |
25,820 |
38,467 |
Operating (loss) /income |
-253 |
-353 |
-158 |
-606 |
611 |
Net loss attributable to equity holders of the parent |
-559 |
-1,120 |
-447 |
-1,679 |
-33 |
Basic loss per common share (US$) |
-0.5 |
-1.11 |
-0.44 |
-1.57 |
-0.03 |
Operating (loss) / income /tonne (US$/t) |
-17 |
-18 |
-7 |
-18 |
14 |
EBITDA |
707 |
967 |
1,555 |
1,674 |
3,207 |
EBITDA/ tonne (US$/t) |
48 |
50 |
68 |
49 |
72 |
Steel-only EBITDA/ tonne (US$/t) |
21 |
34 |
43 |
29 |
50 |
Crude steel production (Mt) |
14.4 |
21.1 |
23.8 |
35.5 |
47.8 |
Steel shipments (Mt) |
14.8 |
19.5 |
22.8 |
34.3 |
44.6 |
Own iron ore production (Mt) |
13.5 |
14.4 |
14.6 |
27.9 |
28.7 |
Iron ore shipped at market price (Mt) |
9.2 |
8.6 |
9.9 |
17.8 |
19.1 |
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