ArcelorMittal reported their second quarter 2020 results.
Report highlights include:
•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 percent sequential reduction in steel shipments.
•Operating loss of $0.3bn in 2Q 2020 includes $0.2bn exceptional items.
•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.
While the speed of the demand recovery post the COVID-19 pandemic remain uncertain, ArcelorMittal’s core markets are showing signs of recovery from exceptionally low levels.
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 percent by 2030 before reaching net zero in 2050.
Commenting, Lakshmi N. Mittal, ArcelorMittal chairman and chief executive officer, 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.”
“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.”
Published in the September 2020 Edition