Chesterton Tribune

 

 

ArcelorMittal posts $559M net loss in 2Q

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By KEVIN NEVERS

ArcleorMittal is reporting a net loss in the second quarter of 2020 of $559 million or 50 cents per share, compared to a net loss in the first quarter of $1.12 billion or $1.11; and a net loss in the year-ago period of $447 million or 44 cents.

Chair and CEO Lakshmi MIttal released the following statement today:

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 percent 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.”

Outlook

ArcelorMittal made the following observations about the current operating climate:

-- "While the speed and trajectory of the demand recovery post 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.

2Q Numbers

-- Sales: $10.9 billion ($14.8 billion 1Q; $19.2 billion year-ago).

Operating loss: $253 million $353 million 1Q; $158 million year-ago).

Crude steel production: 14.4 million net tons (21.1 million 1Q; 23.8 million year-ago).

Steel shipments: 14.8 million net tons (19.5 million 1Q; 22.8 million year-ago).

 

Posted 7/30/2020

 
 
 
 

 

 

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