ArcelorMittal reports fourth quarter 2016 and full year 2016 results
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February 10, 2017
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
for the three
and twelve month periods ended December 31, 2016.
Strategic progress in 2016:
Company has continued to make progress on its strategic objectives during 2016,
highlights (on the basis of IFRS):
Commenting, Mr. Lakshmi N. Mittal,
ArcelorMittal Chairman and CEO, said:
was a year of progress for ArcelorMittal, characterised by improving market
conditions, a strong contribution from our Action 2020 programme and steps from
governments to address unfair trade. As a result, EBITDA was comfortably in
excess of initial expectations and, furthermore, we have delivered on our
commitment to prioritise debt reduction, significantly strengthening our
balance sheet and ending the year with the lowest level of net debt since the
creation of the Company.
enter 2017 with good momentum in the business and the market. Our
increased confidence is reflected in the Board’s decision to increase capital
expenditure for 2017. The improvement in performance is, however, from a
low base so we will need to continue to prioritise improved returns. Central to
this will be our Action 2020 programme which will sustainably improve the
underlying performance of the business. We remain fully focussed on continuing
the good progress in the three areas of cost optimisation, product mix and
volume growth. In addition, given global overcapacity, ensuring fair trade
remains crucial and we will continue to call for a comprehensive solution to
unfair trade practises.”
Fourth quarter 2016 earnings analyst conference call
management will host a conference call for members of the investment community
to discuss the three-month and twelve-month periods ended December 31, 2016 on:
document may contain forward-looking information and statements about ArcelorMittal
and its subsidiaries. These statements include financial projections and
estimates and their underlying assumptions, statements regarding plans,
objectives and expectations with respect to future operations, products and
services, and statements regarding future performance. Forward-looking
statements may be identified by the words “believe,” “expect,” “anticipate,”
“target” or similar expressions. Although ArcelorMittal’s management believes
that the expectations reflected in such forward-looking statements are
reasonable, investors and holders of ArcelorMittal’s securities are cautioned
that forward-looking information and statements are subject to numerous risks
and uncertainties, many of which are difficult to predict and generally beyond
the control of ArcelorMittal, that could cause actual results and developments
to differ materially and adversely from those expressed in, or implied or
projected by, the forward-looking information and statements. These risks and
uncertainties include those discussed or identified in the filings with the
Luxembourg Stock Market Authority for the Financial Markets (
Secteur Financier) and the United States Securities and
Exchange Commission (the “SEC”) made or to be made by ArcelorMittal, including
ArcelorMittal’s latest Annual Report on Form 20-F on file with the SEC.
ArcelorMittal undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events, or
is the world's leading steel and mining company, with a presence in 60
countries and an industrial footprint in 19
countries. Guided by a philosophy to produce safe, sustainable steel, we are
the leading supplier of quality steel in the major global steel markets
including automotive, construction, household appliances and packaging, with
world-class research and development and outstanding distribution networks.
Through our core values of sustainability, quality and leadership,
we operate responsibly with respect to the health, safety and wellbeing of our
employees, contractors and the communities in which we operate.
For us, steel is the fabric of life, as it is at the heart of the
modern world from railways to cars and washing machines. We are actively
researching and producing steel-based technologies and solutions that make many
of the products and components people
everyday lives more energy efficient.
We are one of the world’s five largest producers of iron ore and
metallurgical coal. With a geographically diversified portfolio of iron ore and
coal assets, we are strategically positioned to serve our network of steel
plants and the external global market. While our steel operations are important
customers, our supply to the external market is increasing as we grow.
In 2016, ArcelorMittal had revenues of $56.8 billion and crude
steel production of 90.8 million tonnes, while own iron ore production reached 55.2
ArcelorMittal is listed on the stock exchanges of New York (MT),
Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges
of Barcelona, Bilbao, Madrid and Valencia (MTS).
For more information about ArcelorMittal please visit: http://corporate.arcelormittal.com/
Corporate responsibility and safety performance
Health and safety -
Own personnel and contractors lost time injury frequency rate
Health and safety performance based on own personnel
figures and contractors lost time injury frequency (LTIF) rate, remained stable
at 0.82x for the twelve months of 2016 (“12M 2016”) as compared to 0.81x for
the twelve months of 2015 (“12M 2015”).
Health and safety performance remained stable at 0.84x in
the fourth quarter of 2016 (“4Q 2016”) as compared to the third quarter of 2016
(“3Q 2016”), and marginally higher than 0.83x for the fourth quarter of 2015 (“4Q
Company’s effort to improve the Group’s Health and Safety record continues and
remains focused on both further reducing the rate of severe injuries and
Own personnel and
contractors - Frequency rate
responsibility highlights for 4Q 2016:
Analysis of results for the twelve months ended December 31,
2016 versus results for the twelve months ended December 31, 2015
steel shipments for 12M 2016 decreased marginally by 0.8% to 83.9 million
metric tonnes as compared with 84.6 million metric tonnes for 12M 2015,
primarily due to lower shipments in Brazil (-6.8%) and Europe (-1.1%) offset in
part by higher shipments in ACIS (+6.3%). On a comparable basis (considering
the sale of long steel producing subsidiaries in the US (LaPlace and Vinton) in
2Q 2016 and Zaragoza in Spain during 3Q 2016), total steel shipments for 12M 2016
of 83.4 million
metric tonnes were
compared with 83.6 million metric tonnes for 12M 2015.
for 12M 2016 decreased by 10.7% to $56.8 billion as compared with $63.6 billion
for 12M 2015, primarily due to lower average steel selling prices (-9.0%),
lower steel shipments (-0.8%) and lower marketable iron ore shipments (-16.6%)
offset in part by higher seaborne iron ore reference prices (+4.8%).
of $2.7 billion for 12M 2016 was lower as compared to $3.2 billion for 12M 2015,
primarily on account of the foreign exchange impact following the appreciation
of the US dollar against major currencies and the reduced asset base following
the impairments recorded at the end of 2015. FY 2017 depreciation is expected
to be approximately $2.8 billion (at current exchange rates).
charges for 12M 2016 were $205 million of which $49 million related to the sale
of ArcelorMittal Zaragoza in Spain and $156 million related to the Vanderbijlpark and Saldanha plants in South Africa,
as compared to impairment charges of $4.8 billion for 12M 2015.
income for 12M 2016 was $832 million relating to a one-time gain on employee
benefits following the signing of the new US labour contract. Exceptional charges
for 12M 2015 of $1.4 billion included $1.3 billion primarily related to the
write-down of inventory following the rapid decline of international steel
prices and litigation and other costs in South Africa ($0.1 billion).
income for 12M 2016 was $4.2 billion as compared to operating loss of $4.2
billion in 12M 2015. Operating results for 12M 2016 were positively impacted by
exceptional income as discussed above. Operating results for 12M 2015 were
negatively impacted by the $4.8 billion impairment charges and $1.4 billion
exceptional charges discussed above.
Income from investments in associates, joint ventures and
other investments in 12M 2016 was higher at $615 million as compared to loss in
12M 2015 of $502 million. The income in 12M 2016 was primarily due to the gain
on disposal of stakes in Gestamp
million) and Hunan Valin
million) as well as improved performance of the Calvert joint venture, Chinese and
Spanish investees offset in part by impairments of the primary steel making assets
at China Oriental. The loss in 12M 2015 was primarily due to write-downs
totalling $565 million primarily related to the Company’s investments in the
Kalagadi Manganese mining project in South Africa ($0.3 billion) and Indian
investee ($0.1 billion), in each case due to downward revisions in projected
cashflows and $0.1 billion related to the decrease in market value of the
investment in Erdemir, partially offset by income ($0.1 billion) generated from
the share swap with respect to Gerdau, Brazil.
Net interest expense (including interest expense and
interest income) was lower at $1.1 billion in 12M 2016, as compared to $1.3
billion in 12M 2015, driven by savings from: early bond repayments via debt
tenders undertaken in 2Q 2016 and 3Q 2016 (totalling $3.5 billion); early
redemption of 4.5% Notes due February 25, 2017 ($1.4 billion) and repayment at
maturity on June 3, 2016, of a €1 billion 9.375% bond. The Company expects full
year 2017 net interest expense of approximately $0.9 billion.
Foreign exchange and other net financing costs were $942 million
for 12M 2016 as compared to foreign exchange and other net financing costs of
$1.6 billion for 12M 2015. Foreign exchange gains/losses primarily relate to
the impact of the USD movements on Euro denominated deferred tax assets and
Euro denominated debt. For the 12M 2016 foreign exchange loss of $4 million was
recorded (as compared to a loss of $697 million for 12M 2015), mainly on
account of USD appreciation of 3.2% against the Euro (versus 10% appreciation
in 12M 2015), 19.8% depreciation against BRL (versus 32% appreciation in 12M
2015) and 1.8% depreciation against the Kazakhstan tenge (versus 46%
appreciation against the tenge in 12M 2015). Foreign exchange and other net
financing costs for 12M 2016 also includes $0.4 billion premium incurred on the
early redemption of bonds and $0.1 billion non-cash expense in connection with
the issuance of shares in the context of the B-BBEE transaction in South Africa.
ArcelorMittal recorded an income tax expense
of $986 million for 12M 2016 as compared to an income tax expense of $902
million for 12M 2015. The deferred tax expense in 12M 2016 of $732 million
includes $0.7 billion impact from the derecognition of deferred tax assets
(DTA) in Luxembourg during the 1Q 2016 (related to revised expectations of the
DTA recoverability in US dollar terms and not related to a deterioration of
expected future taxable income).
Non-controlling interests for 12M 2016 were a
loss of $45 million as compared to a net loss attributable to non-controlling
interests of $477 million for 12M 2015. The net loss attributable to non-controlling
interests for 12M 2016 primarily related to losses attributable to the minority
interests in ArcelorMittal South Africa, partially offset by minority
shareholders’ share of net income recorded in ArcelorMittal Mines Canada and
Belgo Bekaert Arames in Brazil. Non-controlling interests for 12M 2015 represented
losses attributable to the minority interests in ArcelorMittal South Africa and
Liberia resulting from the impairment of assets as described above.
net income for 12M 2016 was $1,779 million, or $0.62 earnings per share, as
compared to a net loss for 12M 2015 of $7.9 billion, or $3.43
loss per share.
Analysis of results for 4Q 2016 versus 3Q 2016
and 4Q 2015
Total steel shipments for 4Q 2016 were 1.3%
lower at 20.0 million metric tonnes as compared with 20.3 million metric tonnes
for 3Q 2016 primarily due to lower shipments in ACIS (-9.2%) and NAFTA (-6.6%)
offset in part by improvements in Brazil (+3.3%) and Europe (+1.6%). Steel
shipments for 4Q 2016 of 20.0 million metric tonnes were 1.6% higher as
compared to 19.7 million metric tonnes for 4Q 2015. On a comparable basis
(considering the sale of long steel producing subsidiaries in the US (LaPlace
and Vinton) in 2Q 2016 and Zaragoza in Spain during 3Q 2016), total steel
shipments for 4Q 2016 were 2.8% higher as compared with 19.5 million metric
tonnes for 4Q 2015.
Sales for 4Q 2016 were $14.1 billion as
compared to $14.5 billion for 3Q 2016 and $14.0 billion for 4Q 2015. Sales in 4Q
2016 were 2.7% lower as compared to 3Q 2016, primarily due to lower steel
shipments (-1.3%) and lower average steel selling prices (-2.0%), offset in
part by higher iron ore reference prices (+20.8%). Sales in 4Q 2016 were 1.0% higher
as compared to 4Q 2015 primarily due to higher steel shipment volumes (+1.6%), higher
average steel selling prices (+3.5%), and higher iron ore reference prices (+51.7%)
offset in part by lower market-priced iron ore shipments (-17.5%).
Depreciation for 4Q 2016 was $696 million as compared
to $693 million for 3Q 2016 and $807 million for 4Q 2015. Depreciation was
lower in 4Q 2016 as compared to 4Q 2015 primarily due to a decreased asset base
following impairments recorded at the end of 2015 and foreign exchange impacts.
Impairment charges for 4Q 2016 were $156 million
related to the Vanderbijlpark
and Saldanha plants in South Africa. Impairment charges for 3Q 2016 were nil. Impairment
charges for 4Q 2015 were $4.7 billion including $0.9 billion with respect to
Mining segment goodwill and $3.8 billion primarily related to fixed assets.
Exceptional items for 4Q 2016 and 3Q 2016
were nil. Exceptional charges for 4Q 2015 were $0.9 billion which primarily
included $0.8 billion inventory related charges following the rapid decline of
international steel prices and litigation and other costs in South Africa ($0.1
Operating income for 4Q 2016 was $0.8 billion
as compared to $1.2 billion in 3Q 2016 and an operating loss of $5.3 billion in
4Q 2015. Operating results for 4Q 2015 were impacted by exceptional charges as
discussed above. Operating income for 4Q 2016 was lower as compared to 3Q 2016
primarily due to lower operating performance in steel segments offset in part
by improved performance in the Mining segment driven primarily by higher iron
Income from investments in associates, joint
ventures and other investments for 4Q 2016 was lower at $14 million as compared
to $109 million for 3Q 2016 (which had included the $74 million gain on
disposal of ArcelorMittal’s stake in Hunan Valin), primarily due to impairment of the primary steel
making assets at China Oriental ($50 million) offset by improved performance of the
Calvert joint venture, Chinese and Spanish investees. Loss from investments in
associates, joint ventures and other investments for 4Q 2015 was $655 million primarily
due to write-downs totalling $608 million primarily related to the Company’s
investments in the Kalagadi Manganese mining project in South Africa ($0.3
billion) and Indian investee ($0.1 billion) due to downward revisions in
projected cash flows, and $0.1 billion related to the decrease in market value
of the investment in Erdemir.
Net interest expense in 4Q 2016 was $221
million as compared to $255 million in 3Q 2016 and $312 million in 4Q 2015. Net
interest expense was lower in 4Q 2016 as compared to 3Q 2016 primarily due to
savings from early bond repayments in 3Q 2016. Net interest expense was lower
in 4Q 2016 as compared to 4Q 2015 due to debt reduction including early bond
repayment via debt tenders.
Foreign exchange and other net financing
costs in 4Q 2016 was $278 million as compared to $223 million for 3Q 2016 and $342
million for 4Q 2015. Foreign exchange gains/losses primarily relate to the
impact of the USD movements on Euro denominated deferred tax assets and Euro
denominated debt. For 4Q 2016 a foreign exchange loss of $128 million was
recorded (as compared to a gain of $65 million for 3Q 2016) mainly as a result
of a 5.6% appreciation of the USD against the Euro (versus 0.5% depreciation in
3Q 2016) and a 0.4% appreciation against BRL (versus 1.1% appreciation in 3Q
2016). Foreign exchange and other net financing costs in 4Q 2016 includes $0.1
billion non-cash expense in connection with the issuance of shares in the
context of the B-BBEE transaction in South Africa. Foreign exchange and other
net financing costs for 3Q 2016 also include $158 million premiums incurred on
the bond repayments via debt tenders. Foreign exchange and other net financing
costs for 4Q 2015 include a foreign exchange loss of $104 million mainly on
account of a 2.8% USD appreciation against the Euro, a 20.3% USD appreciation
against the tenge currency in Kazakhstan and a 27.7% USD appreciation against
the Argentine pesos (after currency controls were lifted) relative to the prior
ArcelorMittal recorded an
income tax benefit of $13 million for 4Q 2016 as compared to an income tax
expense of $146 million for 3Q 2016 and $441 million for 4Q 2015.
attributable to non-controlling interests for 4Q 2016 of $66 million represent income
primarily related to losses generated by ArcelorMittal South Africa offset in
part by minority shareholders’ share of net income recorded in ArcelorMittal
Mines Canada and Belgo Bekaert Arames in Brazil. Net income attributable to non-controlling
interests for 3Q 2016 of $9 million related to minority shareholders’ share of
net income recorded in ArcelorMittal Mines Canada and Belgo Bekaert Arames in
Brazil partially offset by losses generated by ArcelorMittal South Africa. Net
loss attributable to non-controlling interests for 4Q 2015 of $395 million primarily
related to South Africa and Liberia resulting from the impairment of the
recorded net income for 4Q 2016 of $403 million, or $0.13 earnings per share as
compared to net income for 3Q 2016 of $680 million, or $0.22 earnings per
share, and as compared to net loss of $6.7 billion, or $2.89 loss per share for
Capital expenditure projects
The following tables summarize the Company’s
principal growth and optimization projects involving significant capital
in most recent quarters
a) In support of the
Company’s Action 2020 program that was launched at its fourth quarter and
full-year 2015 earnings announcement, the footprint optimization project at
ArcelorMittal Indiana Harbor is now underway, which has resulted in structural
changes required to improve asset and cost optimization. The plan involves
idling redundant operations including the #1 aluminize line, 84” hot strip mill
(HSM), and #5 continuous galvanizing line (CGL) and No.2 steel shop (expected to
be idled in 2017) whilst making further planned investments totalling ~US$200
million including a new caster at No.3 steelshop (completed in 4Q 2016),
restoration of the 80” hot strip mill and Indiana Harbor finishing and
logistics. The project is expected to be completed in 2018.
b) On July 7, 2015,
ArcelorMittal Poland announced it was restarting preparations for the relining
of blast furnace No. 5 in Krakow, which has now been completed during 3Q 2016. Total
investments in the primary operations in the Krakow plant will amount to PLN
200 million (more than €40 million), which also includes modernization of the
basic oxygen furnace No. 3. Additional projects in the downstream operations
will also be implemented. These include the extension of the hot rolling mill
capacity by 0.9 million tons per annum and increasing the hot dip galvanizing
capacity by 0.4 million tons per annum. The capex value of those two projects
exceeds PLN 300 million (€90 million) in total. In total, the Group will invest
more than PLN 500 million (more than €130 million) in its operations in Krakow,
including both upstream and downstream installations.
c) Though the Monlevade
wire rod expansion project and Juiz de Fora rebar expansion were completed in
2015, and Juiz de Fora meltshop is expected to be completed in 2017, the
Company does not expect to increase shipments until domestic demand improves.
d) ArcelorMittal Liberia
is considering moving ore extraction from its depleting DSO (direct shipping
ore) deposit at Tokadeh to the nearby, low strip ratio and higher grade DSO
Gangra deposit by 3Q 2017. Following a period of exploration cessation caused
by the onset of Ebola, ArcelorMittal Liberia recommenced drilling for DSO
resource extensions in late 2015. During 2016 the operation at Tokadeh was
right sized to 3Mtpa to focus on its ‘natural’ Atlantic markets. The nearby
Gangra deposit is now the preferred next development in a staged approach as
opposed to the originally planned phase 2 step up to 15Mtpa of concentrated
sinter fine ore that was delayed in August 2014 due to the declaration of force
majeure by contractors following the Ebola virus outbreak, and then reassessed
following rapid iron ore price declines over the period since. Accordingly, the
Company is finalising a final feasibility study on Gangra. ArcelorMittal
remains committed to Liberia where it operates a full value chain of mine, rail
and port and where it has been operating the mine on a DSO basis
since 2011. With 2 billion tonnes of iron ore resource in its lease,
ArcelorMittal Liberia presents a strong, competitive source of product ore for
the international market based on continuing DSO mining and then moving to a
long-term sinter feed and concentration phase.
of segment operations
segment crude steel production decreased 7.7% to 5.2 million tonnes in 4Q 2016
as compared to 5.6 million tonnes for 3Q 2016.
shipments in 4Q 2016 decreased by 6.6% to 5.0 million tonnes as compared to 3Q 2016,
primarily driven by a 8.5% decrease in flat products volumes mainly reflecting a
destock in the US.
in 4Q 2016 decreased 11.1% to $3.8 billion as compared to $4.3 billion in 3Q 2016,
primarily due to lower average steel selling prices (-4.7%) and lower steel
shipment volumes as discussed above. Average steel selling price for flat
products and long products declined -3.6% and -3.7%, respectively.
income in 4Q 2016 decreased to $164 million as compared to operating income of
$424 million in 3Q 2016 (see explanation below) and higher as compared to operating
loss of $741 million in 4Q 2015. Operating performance in 4Q 2015 was impacted
by impairments totalling $507 million with respect to the intended sale of Long
Carbon facilities in the US (ArcelorMittal LaPlace, Steelton and Vinton) ($0.2
billion), and following planned asset optimization at Indiana Harbor East and
West in the US ($0.3 billion). In addition, operating performance in 4Q 2015 was
impacted by exceptional
inventory related charges of $353 million following the rapid decline of steel
in 4Q 2016 decreased 46.9% to $301 million as compared to $566 million in 3Q 2016
primarily due to lower steel shipment volumes (-6.6%) (primarily driven by a 8.5%
decrease in flat products volumes), and 4.7% decline in average steel selling
prices (flat products and long products declined -3.6% and -3.7%, respectively).
4Q 2016 improved 10.3% as compared to $273 million in 4Q 2015 due to higher
steel shipments volumes +9.4% (primarily due to higher shipments in Mexico).
Brazil segment crude steel production decreased 3.8% to 2.8 million
tonnes in 4Q 2016 as compared to 2.9 million tonnes in 3Q 2016.
Steel shipments in 4Q 2016 increased by +3.3% to 2.8 million
tonnes as compared
to 3Q 2016, primarily due to a +8.5% increase in flat steel shipments
(primarily exports) offset in part by a 6.0% decrease in long product
Sales in 4Q 2016 increased by 1.2% to $1.8 billion as compared to $1.7 billion
in 3Q 2016, due
steel shipments as discussed above, offset in part by 2.9% decrease in average
steel selling prices primarily in slab exports (both flat and long steel prices
declining -4.6% and -1.7%, respectively).
Operating income in 4Q 2016 decreased
to $143 million as compared to an operating income of $233 million in 3Q 2016 and
increased as compared to an operating loss of $134 million in 4Q 2015. Operating
performance in 4Q 2015 was impacted by impairment of $176 million related to the
closure of Point Lisas (Trinidad and Tobago), and exceptional
of $52 million relating to inventory write down in Point Lisas.
in 4Q 2016 decreased by 29.1% to $213 million as compared to $301 million in 3Q
2016 primarily on account of lower average steel selling prices (due in part to weak
product mix) as well as higher costs including repair and maintenance
expenditures. EBITDA in 4Q 2016 was 17.6% higher as compared to $181 million in
4Q 2015 due to improved flat operations profitability offset in part by lower
long products profitability including tubular operations in Venezuela impacted
by currency devaluation.
segment crude steel production decreased by 3.8% to 10.2 million tonnes in 4Q 2016,
as compared to 10.6 million tonnes in 3Q 2016 primarily due to the planned
reline at ArcelorMittal Asturias (Spain).
shipments in 4Q 2016 increased by 1.6% to 9.6 million tonnes as compared to 9.4
million tonnes in 3Q 2016, primarily due to a 7.3% increase in long product
shipments following a recovery from the weak third quarter 2016 levels.
in 4Q 2016 decreased 0.5% to $7.1 billion as compared to $7.2 billion in 3Q 2016,
primarily due to lower average steel selling prices (-0.9%), (driven by a -6.1%
decrease in long product
prices offset in part by a +1.0% increase in flat product prices), offset in
part by higher
steel shipments as discussed above.
Operating income in 4Q 2016 was
$387 million as compared to $414 million in 3Q 2016 and an operating loss of $506
million in 4Q 2015. Operating performance in 4Q
2015 was impacted by impairments of $398 million primarily in connection with
the idling for an indefinite time of the ArcelorMittal Sestao plant in Spain as
well as by exceptional charges of $345 million relating to the write-down of
inventories following the rapid decline of steel prices.
EBITDA in 4Q 2016 decreased
by 2.6% to $698 million as compared to $717 million in 3Q 2016 primarily due to
higher input costs and translation foreign exchange impacts partially offset by
higher steel shipment volumes and higher average steel prices in euros (+2.4%).
in 4Q 2016 improved by 28.2% as compared to 4Q 2015 primarily on account of higher
average steel selling prices (+3.9%), higher steel shipment volumes (+0.7%) as
well as cost efficiency improvements offset in part by higher input costs.
segment crude steel production in 4Q 2016 increased by 2.6% to 3.6 million
tonnes as compared to 3Q 2016 primarily due to the production recovery at Kryvyi
Rih in Ukraine which had been impacted by production outages during the prior
shipments in 4Q 2016 decreased by 9.2% to 3.1 million tonnes as compared to 3.4
million tonnes in 3Q 2016 primarily due to seasonally lower shipments in both
CIS operations and South Africa.
in 4Q 2016 decreased 3.8% to $1.5 billion as compared to $1.6 billion in 3Q
2016, primarily due to lower steel shipments (-9.2%) offset in part by higher average
steel selling prices (+3.0%).
Operating loss in 4Q 2016 was
$92 million, operating income in 3Q 2016 was $156 million and operating loss in
4Q 2015 was $455 million. Operating loss in 4Q 2016 was impacted
by impairments of $156 million related to the Vanderbijlpark and Saldanha
in South Africa. Operating performance in 4Q
2015 was impacted by impairments of $267 million primarily with
respect to the Saldanha plant in South Africa due to its revised competitive outlook, and
exceptional charges of $159 million primarily relating to a deferred stripping
a provision in relation to competition cases in South Africa
write-down of inventories following the rapid decline of steel prices.
in 4Q 2016 of $142 million was lower as compared to $233 million in 3Q 2016. EBITDA
in 4Q 2016 was impacted by a one-time charge of $28 million in relation to
environmental liabilities at the Thabazimbi mine in South Africa. In addition,
EBITDA in 4Q 2016 was lower than 3Q 2016 on account of lower steel shipment volumes
and higher input costs partially offset by higher average steel selling prices.
EBITDA in 4Q 2016 was higher as compared to $61 million in 4Q 2015, primarily due to higher average
selling prices (+21.2%) offset in part by higher input costs.
iron ore and coal production not including strategic long-term contracts.
ore and coal shipments of market-priced based materials include the Company’s
own mines, and share of production at other mines, and exclude supplies under
strategic long-term contracts.
iron ore production in 4Q 2016 increased by 1.9% to 13.9 million metric tonnes
as compared to 13.7 million metric tonnes in 3Q 2016 due to higher production
at Ukraine and Canada, offset in part by lower production in Kazakhstan and
Own iron ore production in 4Q 2016 was lower by 10.4% as compared to
4Q 2015 primarily due to lower production in Canada, Ukraine, and Liberia. With
ongoing focus on our most competitive iron ore operations: Liberia production
is currently being maintained at approximately 2 million metric tonnes per
annum and the Volcan mine in Mexico was suspended in October 2015 (2 million
metric tonnes annual impact). Iron ore production in Ukraine during 2016 decreased
to reflect a revised mine plan following a delay in accessing new tailings
disposal land (which negatively impacted production by approximately 1Mt). Own
iron ore production for the mining segment is expected to increase in 2017 with
the transition to the Gangra deposit in Liberia (project under review and
subject to board approval) additional production to potentially reach 3Mtpa,
representing an increase of 1Mt versus 2016, until proposed full ramp up to
5Mtpa in 2018); restart of the Volcan mine in Mexico due to revised mine plan
in light of improved price conditions (additional 2Mt) and production recovery
in Ukraine following resolution of issues described above.
iron ore shipments in 4Q 2016 were stable at 8.1 million metric tonnes as
compared to 3Q 2016, primarily driven by lower shipments in ArcelorMittal Mines
Canada offset by increased shipments in Ukraine. Shipments at ArcelorMittal
Mines Canada were impacted by logistics and transportation issues following
severe weather conditions during 4Q 2016. As a result, ArcelorMittal Mines
Canada market-priced iron ore shipments declined to 6.2 million tonnes during 4Q
2016 as compared to 6.6 million tonnes in 3Q 2016 and recorded FY 2016 market-price
iron ore shipments of 25.4 million metric tonnes (compared to 26.0 million
metric tonnes in FY 2015), primarily due to operational and weather related
issues. Market-priced iron ore shipments in 4Q 2016 decreased by 17.5% as
compared to 4Q 2015 driven by decreased shipments primarily in Ukraine, Canada,
Brazil and Liberia.
iron ore shipments for FY 2016 were 16.6% lower as compared to FY 2015. FY 2017
market-priced iron ore shipments are expected to increase by approximately 10%
versus FY 2016 for the reasons described above.
coal production in 4Q 2016 increased 9.1% to 1.8 million metric tonnes as
compared to 1.6 million metric tonnes in 3Q 2016. Own coal production in 4Q 2016
increased 23.1% as compared to 4Q 2015.
coal shipments in 4Q 2016 were 7.5% lower at 0.9 million metric tonnes as
compared to 1.0 million metric tonnes in 3Q 2016 primarily due to decreased shipments
at Princeton (US) offset in part by higher shipments in Kazakhstan.
Market-priced coal shipments in 4Q 2016 increased 18.1% as compared to 4Q 2015
primarily due to increased shipments at Princeton (US).
income in 4Q 2016 increased to $203 million as compared to an operating income
of $103 million in 3Q 2016, and an operating loss of $3.4 billion in 4Q 2015,
primarily for the reasons discussed below. Operating performance in 4Q 2015 was impacted
by impairments of $3.4 billion including $0.9 billion with respect to goodwill and $2.5
billion primarily related to fixed assets, in respect of iron ore mining
operations at ArcelorMittal Liberia ($1.4 billion), Las Truchas in Mexico ($0.2
billion), ArcelorMittal Serra Azul in Brazil ($0.2 billion) and coal mining
operations at ArcelorMittal Princeton in the United States ($0.7 billion)
mainly due to a downward revision of cash flow projections relating to the
expected persistence of a lower raw material price outlook.
in 4Q 2016 increased 45.9% to $297 million as compared to $204 million in 3Q
2016, primarily due to higher seaborne iron ore market reference prices (+20.8%).
4Q 2016 was significantly higher as compared to $90 million in 4Q 2015,
primarily due to higher seaborne iron ore market reference prices (+51.7%), offset in part by
lower market-priced iron ore shipment volumes (-17.5%).
Liquidity and Capital Resources
4Q 2016, net cash provided by operating activities was $1,653 million as
compared to $876 million in 3Q 2016, including a $495 million release of
working capital in 4Q 2016 as compared to a $565 million investment in working
capital in 3Q 2016.
Net cash used in investing activities during 4Q 2016 was
$809 million as compared to net cash used in investing activities of $300
million in 3Q 2016 and net cash used in investing activities of $646 million in
4Q 2015. Capital expenditure increased to $802 million in 4Q 2016 as compared
to $535 million in 3Q 2016 and $736 million in 4Q 2015. FY 2016 capital
expenditure was $2.4 billion which was lower than $2.7 billion for FY 2015.
Cash flows from other investing activities in 3Q 2016 of $235
million primarily consisted of proceeds from the sale of ArcelorMittal’s stake
in Hunan Valin ($165 million)
the sale of ArcelorMittal Zaragoza ($89 million).
Cash flow from other investing activities in 4Q 2015 of $90 million primarily consisted
of proceeds from the partial disposal of the Company’s stake in Stalprodukt and
disposal of tangible assets.
Net cash used in
financing activities for 4Q 2016 was $468 million as compared to $741 million
for 3Q 2016 and $367 million for 4Q 2015. Net cash used in financing activities
for 4Q 2016 primarily includes repayments of a $0.3 billion loan and $0.5
billion of short term facilities, offset in part by a $0.3 billion increase in commercial
Net cash used in
financing activities for 3Q 2016 primarily included payments relating to bond
repurchases pursuant to cash tender offers ($1.4 billion), offset by proceeds
of $1.0 billion from the drawdown of other short term facilities (including
$0.5 billion from the asset-based revolving credit facility at ArcelorMittal
USA which matures in 2021, initially drawn for a period of 3 months). Net cash used in financing activities in 4Q 2015 primarily
included the early redemption of the $500 million 3.75% notes due March 2016.
During 4Q 2016 and 4Q 2015, the Company paid dividends of $7 million
and $11 million, respectively to minority shareholders in Belgo Bekaert Arames
in Brazil. During 3Q 2016, the Company paid dividends of $7 million
to minority shareholders in ArcelorMittal Mines Canada and Belgo Bekaert Arames
December 31, 2016, the Company’s cash and cash equivalents (including
restricted cash and short-term investments) amounted to $2.6 billion as
compared to $2.3 billion at September 30, 2016 and $4.1 billion at December 31,
2015. Gross debt decreased to $13.7 billion as at December 31, 2016, as
compared to $14.4 billion at September 30, 2016 and $19.8 billion at December 31,
of December 31, 2016, net debt decreased to $11.1 billion as compared with $12.2
billion at September 30, 2016 (primarily due to increase in cash from operating
activities and foreign exchange), and lower as compared to $15.7 billion as of December
of December 31, 2016, the Company had liquidity of $8.1 billion, consisting of
cash and cash equivalents (including restricted cash and short-term
investments) of $2.6 billion and $5.5 billion of available credit lines (see
recent developments below). The $5.5 billion credit facility contains a
financial covenant of 4.25x Net debt / EBITDA. On December 31, 2016, the
average debt maturity was 7.0 years.
Action 2020 progress
Company has made measurable progress on its strategic Action 2020 plan resulting
in $0.9 billion of contribution to 2016 operating results.
We are approximately one third of the way
along the Action2020 journey with all segments contributing to the progress in
2016. The savings achieved so far are largely from a combination of cost and
product mix improvements. Volume is a key component of Action 2020 (5Mt volume
improvement) and we expect to see more progress in this area in 2017.
Financial calendar for 2017:
Outlook and guidance
Global apparent steel consumption (“ASC”) is estimated to
have expanded by +1% in 2016. Based on the current economic outlook,
ArcelorMittal expects global ASC to grow further in 2017 by between ~ +0.5% to
+1.5%. By region: ASC in the US declined in 2016 by approximately -1.0% to
-1.5%, driven in large part by a significant destock in the 2H 2016. However,
underlying demand continues to expand, and the expected absence of a further
destock in 2017 should support ASC growth in the US of approximately +3.0% to 4.0%
in 2017. In Europe, ArcelorMittal expects the pick-up in underlying demand to
continue, supported by the strength of the automotive end market, but apparent
demand is expected to be modest at +0.5% to +1.5% in 2017 (versus growth of
+1.5% to +2.0% in 2016). In Brazil, following the significant decline in
ASC in 2016 (-13.0% to -13.5%) ASC is expected to grow by +3.0% to +4.0% in
2017 as the economy mildly recovers as consumer confidence returns. In the
CIS, following an ASC decline of -3.5% to -4.0% in 2016, the region should
stabilize in 2017 with ASC similar to 2016 levels (-0.5% to +0.5%). In China,
following ASC growth of +1.0% to +1.5% in 2016, demand is expected to stabilise
in 2017 (decline of around 0% to -1.0%) as the ongoing weakness in the real
estate sector is expected to be offset in part by robust infrastructure and
automotive end markets.
Capex spend in 2017 is expected to increase to $2.9
billion (from $2.4 billion in 2016) as the Group seeks to capitalise on
opportunities to grow value and returns. In addition, interest expense is
expected to decline to $0.9 billion (as compared to $1.1 billion in FY 2016); while
cash taxes and contributions to fund pensions are expected to increase by a
total of $0.2 billion. As a result, the Company expects the cash needs of the
business in 2017 to increase to $5.0 billion (from $4.5 billion in 2016).
Condensed Consolidated Statement of Financial Position
ArcelorMittal Condensed Consolidated Statement of Operations
ArcelorMittal Condensed Consolidated Statement of Cash flows
Appendix 1: Product shipments by region
Others and eliminations line are not presented in the table
Appendix 2: Capital
Others and eliminations line are not presented in the table
Appendix 3: Debt repayment schedule as of December 31, 2016
Appendix 4: Credit lines available as of December 31, 2016
Appendix 5: Reconciliation of EBITDA to operating income
Segment EBITDA is reconciled to segment operating income in each of the
segment discussions above.
Appendix 6: Reconciliation of net debt
Appendix 7: Terms and definitions
indicated otherwise, or the context otherwise requires, references in this
earnings release report to the following terms have the meanings set out next
to them below:
lost time injury
frequency rate equals lost time injuries per 1,000,000 worked hours, based on
own personnel and contractors.
plus depreciation, impairment expenses and exceptional income/(charges).
income / (charges):
to transactions that are significant, infrequent or unusual and are not
representative of the normal course of business such as restructuring costs
or asset disposals.
long-term debt, plus short term debt, less cash and cash equivalents,
restricted cash and short-term investments (including those held as part of
assets/liabilities held for sale).
long-term debt, plus short term debt (including those held as part of
liabilities held for sale).
represent amounts of iron ore and coal from ArcelorMittal mines that could be
sold to third parties on the open market. Market-priced tonnes that are not
sold to third parties are transferred from the Mining segment to the
Company’s steel producing segments and reported at the prevailing market
price. Shipments of raw materials that do not constitute market-priced tonnes
are transferred internally and reported on a cost-plus basis.
exchange and other net financing costs:
include foreign currency swaps, bank
fees, interest on pensions, impairments of financial instruments, revaluation
of derivative instruments and other charges that cannot be directly linked to
steel selling prices:
calculated as steel sales divided by steel shipments.
i) “External sales”: mined product sold to third parties at market price; ii)
“Market-priced tonnes”: internal sales of mined product to ArcelorMittal
facilities and reported at prevailing market prices; iii) “Cost-plus tonnes”
- internal sales of mined product to ArcelorMittal facilities on a cost-plus
basis. The determinant of whether internal sales are reported at market price
or cost-plus is whether the raw material could practically be sold to third
parties (i.e. there is a potential market for the product and logistics exist
to access that market).
accounts receivable plus inventories less trade and other accounts payable.
acquisition of intangible assets (such as concessions for mining and IT
support) and acquisition of tangible assets.
Seaborne iron ore
refers to iron ore prices for 62% Fe CFR China.
iron ore production:
Includes total of all finished production of fines, concentrate, pellets and
lumps (excludes share of production and strategic long-term
Refer to projects for which construction has begun (excluding various
projects that are under development), even if such projects have been placed
on hold pending improved operating conditions.
EBITDA divided by total steel shipments.
EBITDA less Mining segment EBITDA.
steel-only EBITDA divided by total steel shipments.
ore unit cash cost:
includes weighted average pellet and concentrate cost of goods sold across
cash equivalents plus available credit lines including back-up lines for the
commercial paper program.
segment and group level eliminates intra–segment shipments (which are
primarily between Flat/Long plants and Tubular plants) and inter-segment
shipments respectively. Shipments of Downstream Solutions are excluded.
The NAFTA segment includes the Flat, Long and Tubular operations of USA,
Canada and Mexico. The Brazil segment includes the Flat operations of Brazil,
and the Long and Tubular operations of Brazil and its neighboring countries
including Argentina, Costa Rica, Trinidad and Tobago and Venezuela. The
Europe segment comprises the Flat, Long and Tubular operations of the
European business, as well as Downstream Solutions. The ACIS segment includes
the Flat, Long and Tubular operations of Kazakhstan, Ukraine and South
: Refers to
Free cash flow:
Refers to net cash provided by (used in) operating activities less capex.
Refers to Net debt divided by last twelve months EBITDA calculation.
results: Refers to operating income/ (loss).
The financial information in this press
release has been prepared consistently with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”) and as adopted by the European Union. The interim financial
information included in this announcement has been also prepared in accordance
with IFRS applicable to interim periods, however this announcement does not
contain sufficient information to constitute an interim financial report as
defined in International Accounting Standards 34, “Interim Financial
Reporting”. The numbers in this press release have not been audited. The
financial information and certain other information presented in a number of
tables in this press release have been rounded to the nearest whole number or
the nearest decimal. Therefore, the sum of the numbers in a column may not
conform exactly to the total figure given for that column. In addition, certain
percentages presented in the tables in this press release reflect calculations
based upon the underlying information prior to rounding and, accordingly, may
not conform exactly to the percentages that would be derived if the relevant
calculations were based upon the rounded numbers. This press release also
includes certain non-GAAP financial measures. ArcelorMittal presents EBITDA,
and EBITDA/tonne, which are non-GAAP financial measures and defined in appendix
7, as additional measurements to enhance the understanding of operating
performance. ArcelorMittal believes such indicators are relevant to describe
trends relating to cash generating activity and provides management and
investors with additional information for comparison of the Company’s operating
results to the operating results of other companies. ArcelorMittal also
presents net debt and the ratio of net debt to EBITDA as an additional
measurement to enhance the understanding of its financial position, changes to
its capital structure and its credit assessment. Non-GAAP financial measures
should be read in conjunction with and not as an alternative for, ArcelorMittal's
financial information prepared in accordance with IFRS. Such non-GAAP measures
may not be comparable to similarly titled measures applied by other companies.
Cash requirements of the business are
defined as below EBITDA cash costs/requirements (including capex) and excludes
working capital changes and one-off items.
Following the Company’s equity offering in
April 2016, the earnings (loss) per share for prior periods have been recasted
in accordance with IFRS for the three months and the twelve months ended December
31, 2015, to include the bonus element derived from the 35% discount to the
theoretical ex-right price included in the subscription price.
Impairment charges for 12M 2015 primarily
related to: (i) Mining segment ($3.4 billion): consisting of $0.9 billion with
respect to goodwill and $2.5 billion primarily related to fixed assets mainly
due to a downward revision of cash flow projections relating to the expected
persistence of a lower raw material price outlook and (ii) steel segments ($1.4
On February 5, 2016 ArcelorMittal announced
it had sold its 35% stake in Gestamp Automoción ("Gestamp") to the majority
shareholder, the Riberas family, for a total cash consideration of €875 million
($971 million). In addition to the cash consideration, ArcelorMittal received
in 2Q 2016 a payment of $11 million as a 2015 dividend.
On August 2, 2016, the Company signed an
agreement for the sale of its 10.08% interest in Hunan Valin to a private
equity fund. On September 14, 2016, the Company transferred the Hunan Valin
shares and simultaneously received the full proceeds of $165 million (RMB1,103
million) from the buyer and recorded a gain of $74 million.
On July 14, 2015, ArcelorMittal entered into
a share swap agreement with Gerdau, as part of which ArcelorMittal received
preferred shares of Gerdau and a cash consideration of $28 million in exchange
for unlisted Gerdau shares. The share swap resulted in a gain of $55 million
from equity method investments and other investments.
On September 28, 2016, ArcelorMittal South
Africa (“AMSA”) announced that it had entered into agreements to implement a
Broad-Based Black Economic Empowerment (B-BBEE) transaction which includes: the
issuance of a 17% shareholding in AMSA using a new class of notionally funded
shares to a special purpose vehicle owned by Likamva Resources Proprietary
Limited (Likamva). Likamva has undertaken to introduce broad-based social and
community development organisations as shareholders to hold an effective 5% interest
(of the 17%, leaving Likamva with a 12% shareholding) within 24 months; and a
5.1% shareholding in AMSA using another new class of notionally funded shares
to the ArcelorMittal South Africa Employee Empowerment Share Trust for the
benefit of AMSA employees and AMSA management. All the shares have certain
restrictions on disposal for a period of 10 years (“Lock-in Period”), thereby
promoting long-term sustainable B-BBEE in AMSA.
Effective January 1, 2016, the Company
discontinued the use of the SICAD rate (13.5 VEF/$ as of December 31, 2015),
which was eliminated by the Venezuelan government, and applied the DICOM rate
(previously known as SIMADI) which was 674 VEF/$ at December
31, 2016 to translate the financial statements of its Venezuelan
operations from VEF to USD.
Under the amended
agreement, between Sishen Iron ore Company (Pty) Ltd and ArcelorMittal South
Africa the latter pays market price (EPP) for iron ore and therefore no longer
contributes towards stripping costs. Accordingly, at December 31, 2015, the
“deferred stripping pre-payment asset” was derecognised and written off through
profit and loss.
extensive engagement ArcelorMittal South Africa reached agreement on an overall
settlement with the Competition Commission. A provision of R1.283 billion
representing the present value of a proposed administrative penalty of R1.5
billion has been accounted for in ArcelorMittal South Africa’s accounts as of
September 30, 2016.
Effective 1Q 2016,
changes in working capital in the cash flow statement includes certain other
amounts payable that were previously classified as part of the other operating
activities line. Prior period figures have been recasted accordingly.
On July 28, 2016,
ArcelorMittal and Megasa Siderúgica S.L. (“Megasa”) signed a shares sale and
purchase agreement in respect of ArcelorMittal’s 100% interest in ArcelorMittal
Zaragoza (“AM Zaragoza”). The closing conditions were completed on September
30, 2016. As a result, ArcelorMittal transferred its shareholding in AM
Zaragoza to Megasa and simultaneously received the total cash consideration of
EUR 80 million ($89 million). The cash consideration has been calculated on a
cash and debt free basis subject to final working capital adjustment.
liabilities held for sale, as of December 31, 2016, include the carrying value
of the USA long product facilities at Steelton and some activities of
ArcelorMittal downstream solutions in the Europe segment and America’s Tailored
On June 23, 2016,
following the ratification by the United Steelworkers of a new labor agreement which
is valid until September 1, 2018, ArcelorMittal made changes mainly to
healthcare post-retirement benefits in its subsidiary ArcelorMittal USA. The
changes resulted in a gain of $832 million.
The exceptional charges
of $1.4 billion for FY 2015 relate to: $909 million booked in 4Q 2015 for the
write-down of inventory following the rapid decline of international steel
prices; $527 million in 3Q 2015 (which included $27 million of retrenchment
costs in South Africa as well as $0.5 billion related to such write-down of
Liège, Belgium, 3 February
2017 - ArcelorMittal
has opened a new, €63m production line - the Jet Vapor Deposition (JVD) line
- at its facilities in Kessales, Belgium. His Majesty King Philippe of Belgium
officially inaugurated the line at an event, held today. The opening is the
culmination of years of scientific investigation by ArcelorMittal’s research
and development teams in collaboration with the Metallurgical Research Centre, CRM
group, to create a new, breakthrough technology for the metallic coating of
invention continues the Walloon tradition of stretching the boundaries of
coating technology for steel – the first hot dip galvanising line was
commissioned in 1881 in Flémalle and the world’s first electrolytic galvanised
steel rolled off the production line in Marchin in 1954.
The new JVD line is part of a major
€138m investment programme within the scope of the 2014 Industrial Plan, an agreement
between ArcelorMittal, the Walloon Government, Sogepa (Société de Gestion et de
Participations) and the social partners. The JVD project was financed by Sogepa
through ARCEO, a joint venture between Sogepa and ArcelorMittal.
The JVD technology
coats moving strips of steel in a vacuum chamber, by vaporizing zinc onto the
steel at high speed. Zinc is used to coat
steel to prevent corrosion, in order to improve durability.
JVD technology, which will be used to produce coated steels for automotive and
other industrial applications, offers multiple
the event, Matthieu Jehl, CEO of the ArcelorMittal Gent-Liège cluster, said:
strength lies in its ability to innovate and push the boundaries of steelmaking.
The €63m investment made in the JVD line together with our partners, and the
wider investment plans for ArcelorMittal’s Gent and Liège clearly underline that
ArcelorMittal believes in the steelmaking future of Belgium. I’m extremely
proud of all the ArcelorMittal employees who have contributed to this project.”
Marcourt, Vice-President of the Government and Walloon Minister of Economy,
Industry, Innovation and Digitalization, who was present at the inauguration, said:
the worldwide leadership of Wallonia in the field of coating technology.
The future of
Walloon steel depends on innovation. In this way, we will be able to further
develop production thanks to the know-how and the excellence of our highly-qualified
president of the Sogepa management committee, said:
technology demonstrates the Liège basin’s steel sector expertise and innovation
capacity. This investment by Sogepa, alongside ArcelorMittal, demonstrates our
commitment to contribute, alongside our private partners, to the future of the
sector in Wallonia through truly innovative products”.
Ludkovsky, vice president and head of research and development at
“The JVD process
is unique - a world-first - and is the result of a breakthrough scientific
development. Today’s inauguration is the culmination of eight years’ hard work
by ArcelorMittal and the CRM group, starting with a small laboratory trial and
ultimately becoming a full industrial solution that’s now operational and means
we can bring unique solutions to our clients in many different markets.”
JVD is a
breakthrough process, not only in terms of production process but also in terms
of product development. It creates two brand new
product families: Jetgal®
and Jetskin™, to
ArcelorMittal’s unique range of metallic coatings.
Want to know more?
About ArcelorMittal in Belgium
ArcelorMittal in Gent and Liège
a workforce of 5,800 employees. Its total number of direct and indirect jobs is
estimated at 13,000. In 2016, the company shipped 6.6 million tons of finished
steel products to its customers, destined for the automotive sector and many
other industries such as the white goods sector, construction, packaging…
Sogepa is an investment fund that
provides investment services and accompanies business reorganization
initiatives driven by credible and sustainable economic and industrial
projects. It develops a large range of solutions: equity participation, loans,
advise and interim management.
investing in steel projects, Sogepa is contributing to making Wallonia a region
of technological innovation in an industry that is central to our economy.
Tel.: +32 (0)9 347 35 72 / +32 (0)499 599 394
Tel.: 0477 37 06 28
21 November 2016 - ArcelorMittal confirms that it has signed a contract for the supply of steel for two new cruise ships to be built by STX France at its shipyards in Saint-Nazaire (France). ArcelorMittal is thus again designated the preferred steel supplier for these projects, as it already had been for four ships built by STX France, including Harmony of the Seas, which was delivered in spring 2016.
This new order for two ships will be 100% supplied by ArcelorMittal’s European plants: the heavy steel plates that will form the ships’ hulls are manufactured at ArcelorMittal’s plant in Gijón (Spain), while the decks will be constructed using steel sheet supplied by the Saint-Nazaire facility from coils produced at Fos-sur-Mer (France). Initial deliveries of these products began in September and the ceremony for the cutting of the first plate was held at the STX France shipyard in St Nazaire on 21 November, marking the commencement of construction of one of these two vessels. Deliveries of ArcelorMittal products for the two ships are scheduled through to the end of 2018.
Reiner Blaschek, Chief Marketing Officer Region North - ArcelorMittal Europe - Flat products, commented: “We welcome the continued confidence in us exhibited by STX France. This exceptional order further strengthens the links between our two groups and opens a new era that will enable us to further extend our partnership, offering increasingly innovative solutions!”
Bertrand Paquet, Senior Vice President, Sourcing Director - STX France, added: “On delivery of the cruise ship Harmony of the Seas, we presented ArcelorMittal with the Best Partner Award 2016 for its excellent performance. This new order will enable us to continue and develop our partnership, because we are firmly convinced of the commitment of ArcelorMittal’s people to continue to support us and take up new challenges together.”
These two new Edge-class upmarket cruise ships were ordered by RCL (Royal Caribbean Cruises Limited) for its Celebrity Cruises brand and will be delivered in 2018 and 2020. Expected to be extremely innovative, they will offer their passengers the highest standards and be clearly positioned in the premium cruise segment.
ArcelorMittal and STX France, a fourth year of partnership and six cruise ships
The partnership between ArcelorMittal and the STX France shipyards dates back to 2013, with the signing of the contract for the supply of 100% of the steel for a first Oasis-class ship for Royal Caribbean Cruise Line. In May 2016, this vessel was delivered to its owner: named Harmony of the Seas, she is the largest cruise ship in the world, being 362 metres in length, with a beam of 66 metres and accommodation for some 6,400 passengers and 2,100 crew members.
In the meantime, ArcelorMittal and STX France signed a second contract for three ships simultaneously: an Oasis-class ship for Royal Caribbean Cruise Line and two Meraviglia-class ships for MSC Cruises, which will be delivered from 2017 to 2019.
The contract announced today therefore represents the fifth and sixth ships built by STX France for which ArcelorMittal is the preferred steel supplier. These orders represent a considerable logistical, technological and human challenge for ArcelorMittal’s people, taken up by the Gijón, Fos-sur-Mer and Saint-Nazaire plants.
ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 19 countries. Guided by a philosophy to produce safe, sustainable steel, we are the leading supplier of quality steel in the major global steel markets including automotive, construction, household appliances and packaging, with world-class research and development and outstanding distribution networks.
In 2015, ArcelorMittal had revenues of US$63.6 billion and crude steel production of 92.5 million tonnes, while own iron ore production reached 62.8 million tonnes.
In France, ArcelorMittal has 17,200 employees including 800 researchers, working in its 40 production sites, distribution and service centers, and four R&D sites. In 2015 ArcelorMittal produced 10 million tons liquid steel in France.
For more information about ArcelorMittal please visit: http://corporate.arcelormittal.com/ and www.arcelormittalinfrance.com
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Anne-Charlotte Créach, firstname.lastname@example.org
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ArcelorMittal in France:
Isabelle Chopin, +33 (0)1 71 92 00 04, +33 (0)6 15 21 59 25, firstname.lastname@example.org
ArcelorMittal reports fourth quarter 2016 and full year 2016 results
ArcelorMittal, the Walloon government and Sogepa celebrate world-first for steel industry, developed in Liège
ArcelorMittal and STX France sign a contract for the supply of steel for two new ships
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