Companies

ArcelorMittal reports $559-million net loss in June quarter

Our Bureau Mumbai | Updated on July 30, 2020 Published on July 30, 2020

ArcelorMittal Chairman and Chief Executive Officer Lakshmi Mittal

Pandemic weakens demand for steel; shipments dipped 35%

ArcelorMittal, the world’s largest steel company, registered a net loss of $559 million in the June quarter against net loss of $447 million in the same period last year.

Sales were down 43 per cent $11 billion against $19 billion for Q2 2019 due to lower steel shipments, which dipped 35 per cent at 15 million tonnes (23 mt) due to Covid impact. Moreover, over-average steel selling prices dipped 17 per cent.

Lakshmi N Mittal, ArcelorMittal Chairman and CEO, said the second quarter of this year was the most difficult period in the history of the company, with demand for steel disrupted by the Covid pandemic.

The company implemented a comprehensive range of measures, including cutting production, capex and fixed costs and raising capital to further strengthen the balance sheet, he said.

Signs of pick up in activity

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. The remaining year will no doubt continue to be challenging, but the company is prepared to increase production and capture improvement in demand when it comes, he added.

As of June quarter end, the gross debt was $13.5 billion and net debt $7.8 billion, the lowest level achieved since the ArcelorMittal merger. Liquidity at the end of June was at $11.2 billion (consisting of cash and cash equivalents of $5.7 billion and $5.5 billion of available credit lines).

ArcelorMital Nippon Steel India crude steel production was down at 1.2 million tonne against 1.7 mt in the March quarter, and EDITA also fell to $107 million against $140 million in March quarter.

AMNS India’s operations were impacted by the lockdown measures. Capital expenditure on maintenance, interest expenses and cash tax expense for 2020 was less than $250 million per annum.

The company has acquired the Odisha Slurry Pipeline Infrastructure for net $245 million (₹1,860 crore) which secures an important infrastructure asset for raw material supply to Hazira steel plant.

 

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on July 30, 2020
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.