ArcelorMittal reports second quarter 2023 and half year 2023 results
- ArcelorMittal reports improved operating income of $1.9bn in Q2 2023, a positive price-cost effect, and robust profitability with EBITDA of $2.6bn. Net income increased to $1.9bn, and basic EPS is $2.21. The company has a strong financial position with net debt of $4.5bn and free cash flow generation of $1.0bn in Q2 2023. Recent acquisitions and strategic capex projects are performing above expected profitability. The company's XCarb® recycled and renewably produced steel offering is gaining momentum, with a supply agreement with General Motors announced. The CEO expresses confidence in the company's future and progress in decarbonization efforts.
- None.
Luxembourg, July 27, 2023 - 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 results1 for the three-month and six-month periods ended June 30, 2023.
Key highlights:
- Health and safety focus: Protecting employee health and wellbeing remains an overarching priority of the Company; LTIF2 rate of 0.73x in 2Q 2023 and 0.70x in 1H 2023
- Improved operating results: A positive price-cost effect, offset in part by a marginal sequential decline in steel shipments to 14.2Mt, drove an improvement in 2Q 2023 operating income to
$1.9b n (vs.$1.2b n in 1Q 2023); 1H 2023 operating income of$3.1b n vs.$1.3b n in 2H 20225
- Robust per-tonne profitability: EBITDA increased to
$2.6b n in 2Q 2023 (vs.$1.8b n in 1Q 2023) with 2Q 2023 EBITDA/t rising to$183 /t (vs.$126 /t in 1Q 2023); 1H 2023 EBITDA of$4.4b n vs.$3.9b n in 2H 20225
- Higher net income:
$1.9b n in 2Q 2023 (vs.$1.1b n in 1Q 2023) includes share of JV and associates net income of$0.4b n (vs.$0.3b n in 1Q 2023); 1H 2023 net income of$3.0b n (vs.$1.3b n in 2H 2022)5
- Enhanced share value: 2Q 2023 basic EPS of
$2.21 /sh; last 12 months rolling ROE3 of10.3% ; book value per share4 now$66 /sh following the repurchase of 5.7m shares during the quarter
- Financial strength: The Company ended June 30, 2023 with net debt of
$4.5b n,$0.7b n lower than the end of March 31, 2023, despite ongoing share buyback ($0.2b n) and dividends ($0.2b n). Gross debt of$10.5b n and cash and cash equivalents of$5.9b n as of June 30, 2023 (compared to$11.5b n and$6.3b n, respectively, as of March 31, 2023)
- Continued strong FCF generation: The Company generated
$1.0b n of free cash flow (FCF) in 2Q 2023 ($2.1b n net cash provided by operating activities less capex of$1.1b n and dividends paid to minorities)
Strategic update and outlook:
- Progress in climate action gathering momentum:
- Funding support: received European Commission (EC) approvals of the government funding support for our Spain, Belgium and France decarbonization projects; awaiting EC approvals for German government funding support
- Projects advancing: >200 dedicated employees; Pre-FEED stage for DRI-EAF projects ongoing/near completion; preparing to move to FEED in DRI/EAF projects and commitments with core process equipment suppliers to lock schedule for supply
- Technology advancements: plans announced between ArcelorMittal and John Cockerill to construct an industrial-scale low temperature, direct electrolysis plant (Volteron™) targeted to produce in phase 1 between 40-80ktpa of iron plates, starting in 2027
- XCarb® progress: Our XCarb® recycled and renewably produced steel9 offering is gaining momentum, and will be produced by ArcelorMittal North America to supply General Motors
- Funding support: received European Commission (EC) approvals of the government funding support for our Spain, Belgium and France decarbonization projects; awaiting EC approvals for German government funding support
- Focused on executing our growth plans and consistently applying our capital allocation and return policy:
- In addition to paying in June 2023 the first installment of the
$0.44 /sh base dividend, the Company has repurchased 24.8 million shares so far in 2023 - Recent acquisitions (ArcelorMittal Pecém6 (Brazil) and ArcelorMittal Texas HBI) and completed strategic capex projects (Mexico hot strip mill) are performing at levels above assumed normalized profitability13
- Planned expansion of the AMNS India Hazira plant to ~15Mt capacity by 2026 progressing well; CGL4 on track for completion in 3Q 2023 to provide platform to launch our Magnelis product in the Indian market for the growing renewables and solar sectors
- In addition to paying in June 2023 the first installment of the
Financial highlights (on the basis of IFRS1):
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 18,606 | 18,501 | 22,142 | 37,107 | 43,978 |
| Operating income | 1,925 | 1,192 | 4,494 | 3,117 | 8,927 |
| Net income attributable to equity holders of the parent | 1,860 | 1,096 | 3,923 | 2,956 | 8,048 |
| Basic earnings per common share (US$) | 2.21 | 1.28 | 4.25 | 3.47 | 8.53 |
| Operating income/tonne (US$/t) | 136 | 82 | 313 | 109 | 300 |
| EBITDA | 2,605 | 1,822 | 5,163 | 4,427 | 10,243 |
| EBITDA /tonne (US$/t) | 183 | 126 | 359 | 155 | 345 |
| Crude steel production (Mt) | 14.7 | 14.5 | 14.6 | 29.2 | 30.9 |
| Steel shipments (Mt) | 14.2 | 14.5 | 14.4 | 28.7 | 29.7 |
| Total group iron ore production (Mt) | 10.5 | 10.8 | 12.0 | 21.3 | 24.0 |
| Iron ore production (Mt) (AMMC and Liberia only) | 6.4 | 6.7 | 7.3 | 13.1 | 14.2 |
| Iron ore shipment (Mt) (AMMC and Liberia only) | 6.6 | 7.4 | 7.5 | 14.0 | 14.2 |
| Shares outstanding fully diluted basis in millions | 839 | 844 | 904 | 839 | 904 |
Commenting, Aditya Mittal, ArcelorMittal Chief Executive Officer, said:
“We have delivered a strong set of financials in the first half of the year, which reflect the improved market conditions and also the positive impact of recent strategic acquisitions. Both ArcelorMittal Pecém in Brazil and ArcelorMittal Texas HBI in the United States are making a valuable contribution, generating above expected EBITDA. Meanwhile organic growth projects that will enhance our ability to produce higher added-value products in high-growth markets, as well as investments in our lower-carbon supply chains, are starting to demonstrate their potential.
“We are making further strategic progress on our decarbonization agenda. Encouragingly, we have now received funding approval from the European Commission for our transformation projects in Belgium, Spain and France. This is an important milestone and we are now engaged in discussions with governments on the cost and availability of the clean energy needed to make these projects viable. On the technology front, we are encouraged by the progress in direct electrolysis which has enabled us to commit to building the world’s first low-temperature iron electrolysis pilot plant. We continue to see growing demand from customers for our XCarb products and earlier this week the design for the Paris 2024 Olympic and Paralympic torch was unveiled, which is being made with our reduced-carbon steel. The torch has a beautiful, intricate design and reflects the admirable ambition of Paris 2024 to halve the carbon footprint compared with previous games.
“Looking ahead, the company is in a good position and focused on delivering further strategic progress in the second half.”
Sustainable development and safety performance
Health and safety – Own personnel and contractors lost time injury frequency rate2
Our priority in all that we do is to protect the safety, health and wellbeing of all our employees. We aspire to become a fatality free and severe injury free company.
The lost time injury frequency rate (“LTIFR”) was 0.73x in the second quarter of 2023 (“2Q 2023”) as compared to 0.64x in the first quarter of 2023 (“1Q 2023”) and 0.67x in the second quarter of 2022 (“2Q 2022”). Health and safety performance in the first six months of 2023 ("1H 2023") was 0.70x as compared to 0.68x in the first six months of 2022 ("1H 2022").
The Company is moving to a ‘predict-and-prevent’ culture which involves focusing its attention on proactive rather than reactive KPIs, with a particular focus on proactively detecting and identifying the Potential for Serious Injuries or Fatalities (“PSIF”). PSIFs are precursors of severe accidents: unsafe situations or events, that we detect proactively, before they could lead to a fatality or injury. This approach enables us to provide a deeper understanding of how near- miss incidents arise and can be avoided.
Own personnel and contractors – Lost Time Injury Frequency rate
| Lost time injury frequency rate | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| NAFTA | 0.25 | 0.09 | 0.28 | 0.18 | 0.28 |
| Brazil | 0.30 | 0.34 | 0.14 | 0.32 | 0.12 |
| Europe | 1.44 | 1.03 | 0.99 | 1.27 | 1.07 |
| ACIS | 0.64 | 0.63 | 0.81 | 0.63 | 0.71 |
| Mining | — | 0.24 | 0.30 | 0.11 | 1.23 |
| Total | 0.73 | 0.64 | 0.67 | 0.70 | 0.68 |
Sustainable development highlights:
- On July 20, 2023, The European Commission approved
€850 million for Dunkirk (2.5Mt DRI and 2 new EAFs). This follows the European Commission approval on June 22, 2023, of the€280 million state aid which the Belgian authorities will provide to our DRI – EAF decarbonization project in Belgium (2.5Mt DRI and 2 new EAFs). The overall support that we will receive from the Belgian and French authorities is inline with our broader ask to our host governments for our decarbonization projects.
- On June 14, 2023, ArcelorMittal and John Cockerill announced plans to construct an industrial- scale low temperature, direct electrolysis plant. The Volteron™ plant is targeting in a first phase to produce between 40,000 and 80,000 tonnes a year of iron plates and to start production in 2027. Once the technology has been proven at this scale, the intention is to increase the plant’s annual capacity to between 300,000 and 1 million tonnes. Direct electrolysis is one of three decarbonization technology pathways ArcelorMittal is working on to make net zero steelmaking a reality. The cold direct electrolysis process extracts iron from iron ore using electricity. The iron plates are then converted into steel in an electric arc furnace.
- On June 7, 2023, ArcelorMittal North America announced a supply agreement with General Motors for XCarb® recycled and renewably produced steel, offering significantly reduced CO2 emissions compared to much of the automotive steel available in North America. ArcelorMittal North America’s XCarb® recycled and renewably produced steel is made via the EAF route using renewable energy and contains a stated minimum of
70% scrap, with up to90% scrap, and does not use carbon offsets to achieve the reduced carbon intensity.
Analysis of results for the six months ended June 30, 2023 versus results for the six months ended June 30, 2022
Total steel shipments for 1H 2023 were 28.7 million metric tonnes (Mt), a decrease of -
Sales for 1H 2023 decreased by -
Depreciation was stable at
Operating income for 1H 2023 of
Income from associates, joint ventures and other investments for 1H 2023 was lower at
Net interest expense in 1H 2023 of
Foreign exchange and other net financing loss were
ArcelorMittal recorded an income tax expense of
ArcelorMittal’s net income for 1H 2023 was
ArcelorMittal’s basic earnings per common share for 1H 2023 was
Analysis of results for 2Q 2023 versus 1Q 2023 and 2Q 2022
Total steel shipments in 2Q 2023 were -
Total steel shipments in 2Q 2023 were -
Sales in 2Q 2023 were stable at
Depreciation for 2Q 2023 was higher at
Operating income for 2Q 2023 was
Income from associates, joint ventures and other investments for 2Q 2023 was
Net interest expense in 2Q 2023 was
Foreign exchange and other net financing loss in 2Q 2023 was
ArcelorMittal recorded an income tax expense of
ArcelorMittal recorded net income in 2Q 2023 of
ArcelorMittal's basic earnings per common share for 2Q 2023 was higher at
Analysis of segment operations
NAFTA
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 3,498 | 3,350 | 3,653 | 6,848 | 7,413 |
| Operating income | 662 | 455 | 817 | 1,117 | 1,871 |
| Depreciation | (127) | (126) | (93) | (253) | (186) |
| EBITDA | 789 | 581 | 910 | 1,370 | 2,057 |
| Crude steel production (kt) | 2,244 | 2,176 | 2,043 | 4,420 | 4,120 |
| Steel shipments* (kt) | 2,604 | 2,843 | 2,453 | 5,447 | 4,909 |
| Average steel selling price (US$/t) | 1,116 | 994 | 1,317 | 1,052 | 1,319 |
* NAFTA steel shipments include slabs sourced by the segment from Group companies (mainly the Brazil segment) and sold to the Calvert JV (eliminated in the Group consolidation). These shipments can vary between periods due to slab sourcing mix and timing of vessels. 2Q'23 360kt; 1Q'23 474kt; 2Q'22 183kt; 1H'23 834kt and 1H'22 660kt
NAFTA segment crude steel production increased by +
Steel shipments in 2Q 2023 declined by 0.2Mt to 2.6Mt as compared to 2.8Mt in 1Q 2023 primarily due to lower slab shipments sourced from Group companies (mainly the Brazil segment and sold to the Calvert JV) and lower Mexico shipments. Steel shipments in 2Q 2023 were +
Sales in 2Q 2023 increased by +
Operating income in 2Q 2023 increased by +
EBITDA in 2Q 2023 of
Brazil6
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 3,826 | 3,068 | 3,986 | 6,894 | 7,352 |
| Operating income | 553 | 323 | 1,201 | 876 | 1,875 |
| Depreciation | (105) | (72) | (71) | (177) | (129) |
| EBITDA | 658 | 395 | 1,272 | 1,053 | 2,004 |
| Crude steel production (kt) | 3,732 | 3,052 | 3,085 | 6,784 | 6,125 |
| Steel shipments (kt) | 3,583 | 2,937 | 3,003 | 6,520 | 6,040 |
| Average steel selling price (US$/t) | 1,001 | 978 | 1,234 | 991 | 1,136 |
Brazil segment crude steel production increased by +
Steel shipments in 2Q 2023 increased by +
Sales in 2Q 2023 increased by +
Operating income in 2Q 2023 of
EBITDA in 2Q 2023 increased by +
Europe
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 10,518 | 10,903 | 13,449 | 21,421 | 26,492 |
| Operating income | 556 | 377 | 2,063 | 933 | 4,144 |
| Depreciation | (309) | (294) | (326) | (603) | (652) |
| EBITDA | 865 | 671 | 2,389 | 1,536 | 4,796 |
| Crude steel production (kt) | 6,943 | 7,779 | 8,261 | 14,722 | 16,950 |
| Steel shipments (kt) | 7,274 | 7,752 | 7,967 | 15,026 | 16,301 |
| Average steel selling price (US$/t) | 1,097 | 1,055 | 1,292 | 1,076 | 1,254 |
Europe segment crude steel production decreased by -
Steel shipments decreased by -
Sales in 2Q 2023 declined by -
Operating income in 2Q 2023 was
EBITDA in 2Q 2023 of
ACIS
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 1,389 | 1,445 | 1,484 | 2,834 | 3,570 |
| Operating (loss)income | (64) | (176) | 43 | (240) | 323 |
| Depreciation | (73) | (72) | (106) | (145) | (211) |
| EBITDA | 9 | (104) | 149 | (95) | 534 |
| Crude steel production (kt) | 1,768 | 1,483 | 1,261 | 3,251 | 3,713 |
| Steel shipments (kt) | 1,497 | 1,500 | 1,218 | 2,997 | 3,289 |
| Average steel selling price (US$/t) | 727 | 741 | 925 | 734 | 881 |
ACIS segment crude steel production in 2Q 2023 was 1.8Mt, an increase of +
Steel shipments in 2Q 2023 were stable at 1.5Mt as compared to 1Q 2023 and were +
Sales in 2Q 2023 decreased by -
Operating loss in 2Q 2023 totalled
EBITDA totalled
Mining
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Sales | 680 | 904 | 1,005 | 1,584 | 1,938 |
| Operating income | 225 | 374 | 463 | 599 | 974 |
| Depreciation | (56) | (56) | (64) | (112) | (120) |
| EBITDA | 281 | 430 | 527 | 711 | 1,094 |
| Iron ore production (Mt) | 6.4 | 6.7 | 7.3 | 13.1 | 14.2 |
| Iron ore shipment (Mt) | 6.6 | 7.4 | 7.5 | 14.0 | 14.2 |
Note: Mining segment comprises iron ore operations of ArcelorMittal Mines Canada and ArcelorMittal Liberia.
Iron ore production in 2Q 2023 was -
Iron ore shipments were -
Operating income in 2Q 2023 was lower by -
EBITDA in 2Q 2023 of
Joint ventures
ArcelorMittal has investments in various joint ventures and associate entities globally. The Company considers the Calvert (
Calvert
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Production ( | 1,198 | 1,226 | 1,127 | 2,424 | 2,251 |
| Steel shipments ( | 1,157 | 1,170 | 1,123 | 2,327 | 2,294 |
| EBITDA ( | 142 | 37 | 261 | 179 | 588 |
* Production: all production of the hot strip mill including processing of slabs on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel slabs.
** Shipments: including shipments of finished products processed on a hire work basis for ArcelorMittal group entities and third parties, including stainless steel products.
*** EBITDA of Calvert presented here on a
Calvert’s hot strip mill (“HSM”) production during 2Q 2023 decreased by -
Steel shipments in 2Q 2023 declined by -
EBITDA*** during 2Q 2023 of
AMNS India
| (USDm) unless otherwise shown | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Crude steel production ( | 1,792 | 1,765 | 1,668 | 3,557 | 3,398 |
| Steel shipments ( | 1,679 | 1,830 | 1,511 | 3,509 | 3,243 |
| EBITDA ( | 563 | 341 | 365 | 904 | 835 |
Crude steel production in 2Q 2023 was stable at 1.8Mt as compared to 1Q 2023 (following a 85-day Corex furnace shutdown offset by higher production from DRI route) and +
Steel shipments in 2Q 2023 were -
EBITDA during 2Q 2023 of
Liquidity and Capital Resources
Net cash provided by operating activities in 2Q 2023 was
Net cash used in investing activities in 2Q 2023 was
The previously announced strategic capex envelope has now been revised to reflect change of scope and inflation to the Liberia and Monlevade projects whilst the Ukraine pellet plant project previously on hold has been removed. The strategic envelope has
Net cash inflow from other investing activities in 2Q 2023 of
Net cash used in financing activities in 2Q 2023 was
During 2Q 2023, the Company paid the first installment of its
As of June 30, 2023, the Company had liquidity of
Outlook
Based on year-to-date developments and the current economic outlook, ArcelorMittal forecasts global ex-China apparent steel consumption (“ASC”) to grow by between +
- In the US, as real demand growth is expected to remain lackluster due to the lagged impact of interest rate rises, apparent steel consumption in 2023 is now expected to decline by -
2.0% to0.0% (versus previous guidance of +1.5% to +3.5% growth). US ASC forecasts have been moderated to reflect weakness in long products and pipes & tubes whilst apparent demand for flat products is still forecast to grow;
- In Europe, whilst the Company continues to assume a marginal decline in real demand in 2023, apparent demand is expected to moderate to -
0.5% to +1.5% in 2023 (versus previous guidance of +0.5% to +2.5% ). The marginal change to European ASC forecasts is largely due to a decline in long products demand forecast due to weak construction activity, whilst apparent demand for flat products is still expected to increase;
- In Brazil, due to the ongoing high interest rate environment, the Company has moderated its real steel consumption estimate in 2023 and now forecasts an ASC growth of
0.0% to +2.0% (revised down from the previous guidance of +3.0% to +5.0% );
- In the CIS region (which includes Commonwealth of Independent States and Ukraine), the Company forecasts some improvement in steel consumption in Ukraine, and now expects ASC to grow
0.0% to +2.0% (revised up from the previous guidance of -2.0% to0.0% ) for the region;
- In India, the Company continues expects another strong year with apparent steel consumption growth in the range of +
6.0% to +8.0% (unchanged from the previous guidance of +6.0% to +8.0% ); and
- In China, whilst economic growth is expected to be broadly stable in 2023, steel consumption is expected to stabilize in 2023 to -
1.0% to +1.0% (unchanged from the previous guidance) with potential upside dependent on government infrastructure stimulus and production discipline impacts.
Recent developments
- On June 16, 2023, S&P upgraded its outlook on ArcelorMittal to positive on expected strengthening of the business and affirmed the BBB- investment grade rating.
- On May 19, 2023, ArcelorMittal announced that upon mandatory conversion of the 24,290,025 outstanding
5.50% Mandatorily Convertible Subordinated Notes due May 18, 2023, it delivered to holders a total of 57,057,991 shares held in treasury on May 19, 2023.
- On May 5, 2023, following publication of the first quarter 2023 results press release dated May 4, 2023, ArcelorMittal announced the commencement of a new buyback program of up to 85 million shares (the "Program") under the authorization given by the annual general meeting of shareholders of May 2, 2023, to be completed by May 2025. The actual amount of shares that will be repurchased pursuant to this new Program will depend on the level of post-dividend free cash flow generated over the period (the Company’s defined policy is to return a minimum of
50% of post-dividend annual FCF), the continued authorization by shareholders and market conditions. The shares acquired under the Program are intended: i) primarily to reduce ArcelorMittal’s share capital; ii) to meet ArcelorMittal’s obligations arising from employee share programs; and/or iii) to meet ArcelorMittal’s obligations under securities exchangeable into equity securities.
ArcelorMittal Condensed Consolidated Statements of Financial Position1
| In millions of U.S. dollars | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 |
| ASSETS | |||
| Cash and cash equivalents | 5,943 | 6,290 | 9,414 |
| Trade accounts receivable and other | 4,774 | 4,989 | 3,839 |
| Inventories | 20,036 | 19,820 | 20,087 |
| Prepaid expenses and other current assets | 3,636 | 4,655 | 3,778 |
| Total Current Assets | 34,389 | 35,754 | 37,118 |
| Goodwill and intangible assets | 5,074 | 5,023 | 4,903 |
| Property, plant and equipment | 33,682 | 32,900 | 30,167 |
| Investments in associates and joint ventures | 11,142 | 10,904 | 10,765 |
| Deferred tax assets | 8,901 | 8,571 | 8,554 |
| Other assets | 2,235 | 2,108 | 3,040 |
| Total Assets | 95,423 | 95,260 | 94,547 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Short-term debt and current portion of long-term debt | 1,809 | 2,827 | 2,583 |
| Trade accounts payable and other | 13,454 | 13,312 | 13,532 |
| Accrued expenses and other current liabilities | 5,791 | 6,687 | 6,283 |
| Total Current Liabilities | 21,054 | 22,826 | 22,398 |
| Long-term debt, net of current portion | 8,651 | 8,650 | 9,067 |
| Deferred tax liabilities | 2,722 | 2,596 | 2,666 |
| Other long-term liabilities | 5,087 | 5,067 | 4,826 |
| Total Liabilities | 37,514 | 39,139 | 38,957 |
| Equity attributable to the equity holders of the parent | 55,720 | 53,974 | 53,152 |
| Non-controlling interests | 2,189 | 2,147 | 2,438 |
| Total Equity | 57,909 | 56,121 | 55,590 |
| Total Liabilities and Shareholders’ Equity | 95,423 | 95,260 | 94,547 |
ArcelorMittal Condensed Consolidated Statements of Operations1
| Three months ended | Six months ended | ||||
| In millions of U.S. dollars unless otherwise shown | Jun 30, 2023 | Mar 31, 2023 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 |
| Sales | 18,606 | 18,501 | 22,142 | 37,107 | 43,978 |
| Depreciation (B) | (680) | (630) | (669) | (1,310) | (1,316) |
| Impairment items (B) | — | — | — | — | — |
| Exceptional items (B) | — | — | — | — | — |
| Operating income (A) | 1,925 | 1,192 | 4,494 | 3,117 | 8,927 |
| Operating margin % | 10.3 % | 6.4 % | 20.3 % | 8.4 % | 20.3 % |
| Income from associates, joint ventures and other investments | 393 | 318 | 578 | 711 | 1,137 |
| Net interest expense | (47) | (64) | (53) | (111) | (104) |
| Foreign exchange and other net financing (loss) | (133) | (117) | (183) | (250) | (323) |
| Income before taxes and non-controlling interests | 2,138 | 1,329 | 4,836 | 3,467 | 9,637 |
| Current tax expense | (316) | (282) | (900) | (598) | (1,595) |
| Deferred tax benefit | 85 | 93 | 74 | 178 | 214 |
| Income tax expense (net) | (231) | (189) | (826) | (420) | (1,381) |
| Income including non-controlling interests | 1,907 | 1,140 | 4,010 | 3,047 | 8,256 |
| Non-controlling interests income | (47) | (44) | (87) | (91) | (208) |
| Net income attributable to equity holders of the parent | 1,860 | 1,096 | 3,923 | 2,956 | 8,048 |
| Basic earnings per common share ($) | 2.21 | 1.28 | 4.25 | 3.47 | 8.53 |
| Diluted earnings per common share ($) | 2.20 | 1.27 | 4.24 | 3.46 | 8.51 |
| Weighted average common shares outstanding (in millions) | 842 | 859 | 924 | 851 | 944 |
| Diluted weighted average common shares outstanding (in millions) | 845 | 862 | 926 | 853 | 946 |
| OTHER INFORMATION | |||||
| EBITDA (C = A-B) | 2,605 | 1,822 | 5,163 | 4,427 | 10,243 |
| EBITDA Margin % | 14.0 % | 9.8 % | 23.3 % | 11.9 % | 23.3 % |
| Total group iron ore production (Mt) | 10.5 | 10.8 | 12.0 | 21.3 | 24.0 |
| Crude steel production (Mt) | 14.7 | 14.5 | 14.6 | 29.2 | 30.9 |
| Steel shipments (Mt) | 14.2 | 14.5 | 14.4 | 28.7 | 29.7 |
ArcelorMittal Condensed Consolidated Statements of Cash flows1
| Three months ended | Six months ended | ||||
| In millions of U.S. dollars | Jun 30, 2023 | Mar 31, 2023 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 |
| Operating activities: | |||||
| Income attributable to equity holders of the parent | 1,860 | 1,096 | 3,923 | 2,956 | 8,048 |
| Adjustments to reconcile net income to net cash provided by operations: | |||||
| Non-controlling interests income | 47 | 44 | 87 | 91 | 208 |
| Depreciation | 680 | 630 | 669 | 1,310 | 1,316 |
| Income from associates, joint ventures and other investments | (393) | (318) | (578) | (711) | (1,137) |
| Deferred tax benefit | (85) | (93) | (74) | (178) | (214) |
| Change in working capital | 178 | (775) | (1,008) | (597) | (3,055) |
| Other operating activities (net) | (200) | 365 | (465) | 165 | (578) |
| Net cash provided by operating activities (A) | 2,087 | 949 | 2,554 | 3,036 | 4,588 |
| Investing activities: | |||||
| Purchase of property, plant and equipment and intangibles (B) | (1,060) | (938) | (655) | (1,998) | (1,184) |
| Other investing activities (net) | 45 | (1,931) | (886) | (1,886) | (963) |
| Net cash used in investing activities | (1,015) | (2,869) | (1,541) | (3,884) | (2,147) |
| Financing activities: | |||||
| Net (payments)proceeds relating to payable to banks and long-term debt | (1,011) | (390) | 389 | (1,401) | 768 |
| Dividends paid to ArcelorMittal shareholders | (185) | — | (332) | (185) | (332) |
| Dividends paid to minorities (C) | (12) | (53) | (166) | (65) | (178) |
| Share buyback | (227) | (477) | (1,496) | (704) | (2,000) |
| Lease payments and other financing activities (net) | (55) | (429) | (46) | (484) | (94) |
| Net cash used in financing activities | (1,490) | (1,349) | (1,651) | (2,839) | (1,836) |
| Net (decrease)increase in cash and cash equivalents | (418) | (3,269) | (638) | (3,687) | 605 |
| Effect of exchange rate changes on cash | 64 | 148 | (367) | 212 | (363) |
| Change in cash and cash equivalents | (354) | (3,121) | (1,005) | (3,475) | 242 |
| Free cash flow (D=A+B+C) | 1,015 | (42) | 1,733 | 973 | 3,226 |
Appendix 1: Product shipments by region1
| (000'kt) | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| Flat | 2,046 | 2,208 | 1,800 | 4,254 | 3,611 |
| Long | 667 | 691 | 748 | 1,358 | 1,405 |
| NAFTA | 2,604 | 2,843 | 2,453 | 5,447 | 4,909 |
| Flat | 2,363 | 1,740 | 1,643 | 4,103 | 3,390 |
| Long | 1,234 | 1,217 | 1,380 | 2,451 | 2,689 |
| Brazil | 3,583 | 2,937 | 3,003 | 6,520 | 6,040 |
| Flat | 5,049 | 5,468 | 5,705 | 10,517 | 11,658 |
| Long | 2,068 | 2,148 | 2,146 | 4,216 | 4,421 |
| Europe | 7,274 | 7,752 | 7,967 | 15,026 | 16,301 |
| CIS | 905 | 901 | 730 | 1,806 | 2,135 |
| Africa | 593 | 600 | 492 | 1,193 | 1,159 |
| ACIS | 1,497 | 1,500 | 1,218 | 2,997 | 3,289 |
Note: “Others and eliminations” are not presented in the table
Appendix 2a: Capital expenditures1
| (USDm) | 2Q 23 | 1Q 23 | 2Q 22 | 1H 23 | 1H 22 |
| NAFTA | 122 | 115 | 115 | 237 | 202 |
| Brazil | 215 | 167 | 123 | 382 | 213 |
| Europe | 350 | 351 | 211 | 701 | 398 |
| ACIS | 117 | 106 | 107 | 223 | 197 |
| Mining | 204 | 168 | 92 | 372 | 162 |
| Others | 52 | 31 | 7 | 83 | 12 |
| Total | 1,060 | 938 | 655 | 1,998 | 1,184 |
Appendix 2b: Capital expenditure projects
Completed projects
| Segment | Site / unit | Project | Capacity / details | Key date / completion |
| NAFTA | ArcelorMittal Dofasco (Canada) | #5 CGL conversion to AluSi® | Addition of up to 160kt/year Aluminum Silicon (AluSi®) coating capability to #5 Hot-Dip Galvanizing Line for the production of Usibor® steels | 3Q 2022 (a) |
Ongoing projects
| Segment | Site / unit | Project | Capacity / details | Key date / forecast completion |
| Brazil | ArcelorMittal Vega Do Sul | Expansion project | Increase hot dipped / cold rolled coil capacity and construction of a new 700kt continuous annealing line (CAL) and continuous galvanizing line (CGL) combiline | 4Q 2023 (b) |
| Mining | Liberia mine | Phase 2 premium product expansion project | Increase production capacity to 15Mt/year | 4Q 2024 (c) |
| NAFTA | Las Truchas mine (Mexico) | Revamping and capacity increase to 2.3MT | Revamping project with 1Mtpa pellet feed capacity increase (to 2.3Mt/year) with DRI concentrate grade capability | 2H 2024 (d) |
| Brazil | Serra Azul mine | 4.5Mtpa direct reduction pellet feed plant | Facilities to produce 4.5Mt/year DRI quality pellet feed by exploiting compact itabirite iron ore | 2H 2024 (e) |
| Brazil | Barra Mansa | Section mill | Increase capacity of HAV bars and sections by 0.4Mt/pa | 1H 2024 (f) |
| Others | Andhra Pradesh (India) | Renewable energy project | 975 MW of nominal capacity solar and wind power | 1H 2024 (g) |
| Europe | Mardyck (France) | New Electrical Steels production facilities | Facilities to produce 170kt NGO Electrical Steels (of which 145kt for Auto applications) consisting of annealing and pickling line (APL), reversing mill (REV) and annealing and varnishing (ACL) lines | 2H 2024 (h) |
| Brazil | Monlevade | Sinter plant, blast furnace and melt shop | Increase in liquid steel capacity by 1.0Mt/year; Sinter feed capacity of 2.25Mt/year | 2H 2026 (i) |
a) Investment to replace #5 Hot-Dip Galvanizing Line Galvanneal coating capability with 160kt/year Aluminum Silicon (AluSi®) capability for the production of ArcelorMittal’s patented Usibor® Press Hardenable Steel for automotive structural and safety components. With the investment, ArcelorMittal Dofasco becomes the only Canadian producer of AluSi® coated Usibor®. This investment complements additional strategic North America developments, including a new EAF and caster at Calvert in the US and a new hot strip mill in Mexico, and will allow to capitalize on increasing Auto Aluminized PHS demand in North America. The project was completed in 3Q 2022 and is estimated to add
b) In February 2021, ArcelorMittal announced the resumption of the Vega Do Sul expansion to provide an additional 700kt of cold-rolled annealed and galvanized capacity to serve the growing domestic market. The ~
c) ArcelorMittal Liberia has been operating at 5Mtpa direct shipping ore (DSO) capacity since 2011 (Phase 1). The Company restarted construction of a 15Mtpa concentrator and associated infrastructure (phase 2). Detailed construction design has been finalized and key equipment and construction contracts have been awarded. Given our improved knowledge of the ore body and desire to maximize the increased resource base, changes have been made to the feed grade to sustain a longer-term high grade mining operation with an extended mine life producing
d) ArcelorMittal Mexico is investing ~
e) Approximately
f) The ~
g) This
h) On March 17, 2022, ArcelorMittal announced an investment with the support of the French government to create a new production unit for electrical steels at its Mardyck site in the north of France. This new unit will specialize in the production of electrical steels for the engines of electric vehicles and which complements ArcelorMittal’s existing electrical steels plant in Saint Chély d’Apcher, in the south of France. The new industrial unit in Mardyck will have a 170kt production capacity and is scheduled to start up in 3Q 2024. The
i) The Monlevade upstream expansion project consisting of the sinter plant, blast furnace and melt shop has recommenced in late 2021. The Monlevade project capex has been revised from
JV capex: Completed projects
| Segment | Site / unit | Project | Capacity / details | Key date / completion |
| VAMA | Vama | Capacity increase by | New CGL capacity of 450kt/year added. CGL/CAL combined capacity now 1.6Mtpa; PLTCM capacity of 2.0Mtpa | 2Q 2023 (j) |
j) VAMA, our 50:50 joint venture with Hunan Valin, is a state-of-the-art facility focused on rolling steel for high-demanding applications in particular automotive. The business is performing well and a new CGL with capacity of 450kt has been completed. First coils were produced in January 3, 2023, with commercial production started from April 2023. This expansion further enable VAMA to meet growing demand of high value add solutions from the Chinese automotive / NEV market.
JV capex: Ongoing projects
| JV | Site / unit | Project | Capacity / details | Key date / forecast completion |
| AMNS Calvert | Calvert | New 1.5Mt EAF and caster | New 1.5Mt EAF and caster | 2H 2024 (k) |
| AMNS India | Hazira | Debottlenecking existing assets and capacity expansion; and other investments ongoing | AMNS India medium-term plans are to expand and grow initially to ~15Mt by early 2026 in Hazira (phase 1A); ongoing downstream projects | 1H 2026 (l) |
k) AMNS Calvert ("Calvert") is constructing a new 1.5Mt EAF and caster (estimated completion has now been extended to 2H 2024 (previously 2H 2023) largely due to enlarged scope and inflation. The joint venture is to invest ~
l) AMNS India is debottlenecking its operations (steel shop and rolling parts) to achieve capacity of 8.6Mt per annum by the end of 2024. AMNS India medium-term plans are to expand and grow initially to ~15Mt in 1H 2026 in Hazira (phase 1A) including automotive downstream and enhancements to iron ore operations, with estimated capex of ~
- Phase 1A plans include a CRM2 complex and galvanizing and annealing line, 2 blast furnaces, steel shop, HSM, ancillary equipment (including coke, sinter, networks, power, gas, oxygen plant etc.); and raw material handling. Start of BF2 expected in 2025 and BF3 in 2026. Also included is BF1 net capacity increase from 2Mtpa to 3Mtpa. CGL4 is on track for completion in 3Q 2023 to provide a platform to launch the Magnelis product in the Indian market for the growing renewables and solar sectors. There are further options to potentially grow to 20Mt per annum (Phase 1B);
- On October 19, 2022 and November 15, 2022, AMNS India concluded a transaction to acquire port, power and other logistics and infrastructure assets in India from the Essar Group for a net value of ~
$2.4 billion ;
- In March 2021, AMNS India signed a Memorandum of Understanding ("MoU") with the Government of Odisha in view of building an integrated steel plant with a 12Mtpa capacity in Kendrapara district of state Odisha. A pre-feasibility study report was submitted to the state government in 3Q 2021, and AMNS India is currently engaging with the government for further studies and clearances. Preparation for ISP projects in Paradeep and Kendrapara underway (Environmental Clearance application done for both Paradeep and Kendrapara projects); and
- The Thakurani mine is operating at full 5.5Mtpa capacity since 1Q 2021, while the second Odisha pellet plant was commissioned and started in September 2021, adding 6Mtpa for a total 20Mtpa of pellet capacity. In addition, in September 2021, AMNS India commenced operations at Ghoraburhani - Sagasahi iron ore mine in Odisha. The mine is set to gradually ramp up production to a rated capacity of 7.2Mtpa and contribute significantly to meeting AMNS India’s long-term raw material requirements.
Appendix 3: Debt repayment schedule as of June 30, 2023
| (USD billion) | 2023 | 2024 | 2025 | 2026 | 2027 | >2027 | Total |
| Bonds | — | 0.9 | 1.0 | 1.0 | 1.2 | 2.6 | 6.7 |
| Commercial paper | 0.7 | — | — | — | — | — | 0.7 |
| Other loans | 0.4 | 0.4 | 0.6 | 0.2 | 0.5 | 1.0 | 3.1 |
| Total gross debt | 1.1 | 1.3 | 1.6 | 1.2 | 1.7 | 3.6 | 10.5 |
Appendix 4: Reconciliation of gross debt to net debt
| (USD million) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 |
| Gross debt | 10,460 | 11,477 | 11,650 |
| Less: Cash and cash equivalents | (5,943) | (6,290) | (9,414) |
| Net debt | 4,517 | 5,187 | 2,236 |
| Net debt / LTM EBITDA | 0.5 | 0.5 | 0.2 |
Appendix 5: Terms and definitions
Unless indicated otherwise, or the context otherwise requires, references in this earnings release to the following terms have the meanings set out next to them below:
Apparent steel consumption: calculated as the sum of production plus imports minus exports.
Average steel selling prices: calculated as steel sales divided by steel shipments.
Cash and cash equivalents: represents cash and cash equivalents, restricted cash, and short-term investments.
Capex: represents the purchase of property, plant and equipment and intangibles.
Crude steel production: steel in the first solid state after melting, suitable for further processing or for sale.
Depreciation: refers to amortization and depreciation.
EPS: refers to basic or diluted earnings per share.
EBITDA: operating results plus depreciation, impairment items and exceptional items.
EBITDA/tonne: calculated as EBITDA divided by total steel shipments.
Exceptional items: income / (charges) relate to transactions that are significant, infrequent or unusual and are not representative of the normal course of business of the period.
FEED: Front End Engineering Design, or FEED, is an engineering and project management approach undertaken before detailed engineering, procurement, and construction. This crucial phase helps manage project risks and thoroughly prepare for the project's execution. It directly follows the pre-feed phase during which the concept is selected, and the feasibility of available options is studied.
Foreign exchange and other net financing income(loss): include foreign currency exchange impact, bank fees, interest on pensions, impairment of financial assets, revaluation of derivative instruments and other charges that cannot be directly linked to operating results.
Free cash flow (FCF): refers to net cash provided by operating activities less capex less dividends paid to minority shareholders
Gross debt: long-term debt and short-term debt.
Impairment items: refers to impairment charges net of reversals.
Iron ore reference prices: refers to iron ore prices for
Kt: refers to thousand metric tonnes.
Liquidity: cash and cash equivalents plus available credit lines excluding back-up lines for the commercial paper program.
LTIF: lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors.
Mt: refers to million metric tonnes.
Net debt: long-term debt and short-term debt less cash and cash equivalents.
Net debt/LTM EBITDA: refers to Net debt divided by EBITDA for the last twelve months.
Net interest expense: includes interest expense less interest income
On-going projects: 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.
Operating results: refers to operating income(loss).
Own iron ore production: includes total of all finished production of fines, concentrate, pellets and lumps and includes share of production.
Price-cost effect: a lack of correlation or a lag in the corollary relationship between raw material and steel prices, which can either have a positive (i.e. increased spread between steel prices and raw material costs) or negative effect (i.e. a squeeze or decreased spread between steel prices and raw material costs).
Shares outstanding fully diluted basis: refers to shares outstanding (shares issued less treasury shares) plus Mandatorily Convertible Subordinated Notes ("MCNs").
Shipments: information at 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.
Working capital change (working capital investment / release): Movement of change in working capital - trade accounts receivable plus inventories less trade and other accounts payable.
Footnotes
- 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 also been 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 Standard 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. Segment information presented in this press release is prior to inter-segment eliminations and certain adjustments made to operating results of the segments to reflect corporate costs, income from non-steel operations (e.g. logistics and shipping services) and the elimination of stock margins between the segments. This press release also includes certain non-GAAP financial/alternative performance measures. ArcelorMittal presents EBITDA and EBITDA/tonne, free cash flow (FCF) and ratio of net debt/LTM EBITDA which are non-GAAP financial/alternative performance measures, as additional measures to enhance the understanding of its operating performance. ArcelorMittal also presents Equity book value per share and ROE as shown in footnotes to this press release. ArcelorMittal believes such indicators are relevant to provide management and investors with additional information. ArcelorMittal also presents net debt and change in working capital as additional measures to enhance the understanding of its financial position, changes to its capital structure and its credit assessment. ArcelorMittal is not presenting adjusted net income/(loss) because there have been no adjustments in recent periods. The Company’s guidance as to its working capital release (or the change in working capital included in net cash provided by operating activities) for 2023 is based on the same accounting policies as those applied in the Company’s financial statements prepared in accordance with IFRS. Non-GAAP financial/alternative performance measures should be read in conjunction with, and not as an alternative to, ArcelorMittal's financial information prepared in accordance with IFRS.
- LTIF refers to lost time injury frequency rate equals lost time injuries per 1,000,000 worked hours, based on own personnel and contractors. LTIF figures: 2Q 2023 0.73; 1Q 2023 0.64x; 2Q 2022 0.67; 1H 2023 0.70 and 1H 2022 0.68.
- ROE refers to "Return on Equity" which is calculated as trailing twelve-month net income (excluding impairment charges and exceptional items) attributable to equity holders of the parent divided by the average equity attributable to the equity holders of the parent over the period. Twelve months rolling ROE at 2Q 2023 of
10.3% ($5.5 billion /$53.7 billion ). Twelve months rolling ROE at 1Q 2023 of14.2% ($7.6 billion /$53.3 billion ). - Equity book value per share is calculated as the Equity attributable to the equity holders of the parent divided by diluted number of shares at the end of the period. 2Q 2023 total equity of
$55.7 billion divided by 839 million diluted shares outstanding equals$66 /sh. 1Q 2023 total equity of$54.0 billion divided by 844 million diluted shares outstanding equals$64 /sh. - 2H 2022 EBITDA of
$3.9 billion is equal to operating income of$1.3 billion plus$1.3 billion of depreciation, plus impairment of$1.0 billion and exceptional items of$0.3 billion . - On March 9, 2023, ArcelorMittal announced that following receipt of customary regulatory approvals it has completed the acquisition of Companhia Siderúrgica do Pecém (‘CSP’) in Brazil for an enterprise value of approximately
$2.2 billion . CSP has since been renamed ArcelorMittal Pecém and is a world-class operation, producing high-quality slab at a globally competitive cost. Its facility, located in the state of Ceará in northeast Brazil was commissioned in 2016. It operates a three million tonne capacity blast furnace and has access via conveyors to the Port of Pecém, a large-scale, deep-water port located 10 kilometers from the plant. The acquisition offers significant operational and financial synergies and brings with it the potential for further expansions, such as the option to add primary steelmaking capacity (including direct reduced iron) and rolling and finishing capacity. Given its location, ArcelorMittal Pecém also presents an opportunity to create a new low-carbon steelmaking hub, capitalizing on the state of Ceará’s ambition to develop a low-cost green hydrogen hub in Pecém. - ArcelorMittal Mines Canada, otherwise known as ArcelorMittal Mines and Infrastructure Canada.
- For further disclosure on the Company's alignment on EU Taxonomy please review the Integrated annual review published on the group's website: https://annualreview2022.arcelormittal.com/
- XCarb™ is designed to bring together all of ArcelorMittal’s reduced, low and zero-carbon products and steelmaking activities, as well as wider initiatives and green innovation projects, into a single effort focused on achieving demonstrable progress towards carbon neutral steel. Alongside the new XCarb™ brand, we have launched three XCarb™ initiatives: the XCarb™ innovation fund, XCarb™ green steel certificates and XCarb™ recycled and renewably produced for products made via the Electric Arc Furnace route using scrap. The Company is offering green steel using a system of certificates (XCarb® green certificates). These will be issued by an independent auditor to certify tonnes of CO2 savings achieved through the Company’s investment in decarbonization technologies in Europe. Net-zero equivalence is determined by assigning CO2 savings certificates equivalent to CO2 per tonne of steel produced in 2018 as baseline. The certificates will relate to the tonnes of CO2 saved in total, as a direct result of the decarbonization projects being implemented across a number of its European sites.
- On March 30, 2022, Votorantim S.A. (“Votorantim”) exercised the put option right it has under its shareholders’ agreement with the Company to sell its entire equity interest in ArcelorMittal Brasil to the Company, following the acquisition of Votorantim's long steel business in Brazil in 2018. The value of the put option is currently the subject of arbitration proceeding brought by Votorantim. ArcelorMittal paid Votorantim the undisputed amount of the put option value (
$179 million ) in January 2023. - The Company sold a
7.85% stake in Erdemir starting in late December 2022, continuing into the first quarter of 2023, generating total proceeds of$0.6 billion . - On December 19, 2018, ArcelorMittal signed a
$5.5 billion Revolving Credit Facility ("RCF"), with a five-year maturity plus two one-year extension options. During the fourth quarter of 2019, ArcelorMittal executed the option to extend the facility to December 19, 2024. The extension was completed for$5.4 billion of the available amount, with the remaining$0.1 billion remaining with a maturity of December 19, 2023. In December 2020, ArcelorMittal executed the second option to extend the facility, and the new maturity is now extended to December 19, 2025. On April 30, 2021, ArcelorMittal amended its$5.5 billion RCF to align with its sustainability and climate action strategy. On December 20, 2022, the RCF was amended as part of the transition from Libor to risk free rates. Loans in USD are now based on Term SOFR instead of Libor. As of June 30, 2023, the$5.5 billion revolving credit facility was fully available. - Estimate of additional contribution to EBITDA, based on assumptions including synergies and once ramped up to capacity and assuming prices/spreads generally in line with long term averages.
- The previously announced strategic capex envelope has now been revised to reflect the change of scope and inflation to the Liberia and Monlevade projects whilst the Ukraine pellet plant project previously on hold is removed. In Liberia, given our improved knowledge of the ore body and desire to maximize the increased resource base, changes have been made to the feed grade to sustain a longer-term high grade mining operation with an extended mine life producing
65% grade product. As a result, capex required to conclude the project has been revised to$1.4 billion (previously$0.8 billion ). This increase reflects a redesign of the 15Mtpa concentrator project to optimize use of the ore body, which necessitated an upgrade of civil works and additional equipment together with non-production infrastructure and a backup power plant. Large resource supports a potential future increase in capacity; in this respect a plan for the phased development of up to 30Mtpa capacity is being studied (including part or full DRI quality concentrate production). First concentrate is estimated in 4Q 2024, full completion is expected 4Q 2025. The project is now estimated to add approximately$350 million of EBITDA on full completion and post ramp up to 15Mtpa rate. The Monlevade project capex has been revised from$0.5 billion to$0.8 billion : scope changes related to more automation and equipment upgrades, more complex civil works post engineering (50% ) and impacts of inflation (50% ). The project completion date is now expected in 2H 2026 (as compared to previous expectation in 2H 2024). The project is estimated to add >$200 million EBITDA on full completion and post ramp up and is supported by fiscal incentive. As a result, the overall strategic capex envelope has been extended by two years to 2026 (with$1.4 billion spent as of June 30 2023), and the complete strategic envelope of projects now estimated to add approximately$1.3 billion of EBITDA on full completion. - 1H 2023 capex of
$2.0 billion includes$1.3 billion of general maintenance capex,$0.6 billion of strategic capex and$0.1 billion of decarbonization capex.
Second quarter 2023 earnings analyst conference call
ArcelorMittal management will host a conference call for members of the investment community to present and comment on the three-month period ended June 30, 2023 on: Thursday July 27, 2023, at 9.30am US Eastern time; 14.30pm London time and 15.30pm CET.
Webcast link - https://interface.eviscomedia.com/player/1152
VIP Connect Conference Call:
Participants may pre-register and will receive dedicated dial-in details to easily and quickly access the call:
https://services.choruscall.it/DiamondPassRegistration/register?confirmationNumber=6618874&linkSecurityString=96e6f8890
Please visit the results section on our website to listen to the reply once the event has finished https://corporate.arcelormittal.com/investors/results
Forward-Looking Statements
This document contains 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 (Commission de Surveillance du 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 otherwise.
About ArcelorMittal
ArcelorMittal is one of the world's leading steel and mining companies, with a presence in 60 countries and primary steelmaking facilities in 16 countries. In 2022, ArcelorMittal had revenues of
Our goal is to help build a better world with smarter steels. Steels made using innovative processes which use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for electric vehicles and renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change. This is what we believe it takes to be the steel company of the future.
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/
Enquiries
ArcelorMittal investor relations: +44 207 543 1128; Retail: +44 207 543 1156; SRI: +44 207 543 1156 and Bonds/credit: +33 1 71 92 10 26.
ArcelorMittal corporate communications (e-mail: press@arcelormittal.com) +44 207 629 7988. Contact: Paul Weigh +44 203 214 2419.
Attachment
FAQ
What are ArcelorMittal's financial results for Q2 2023?
What is the company's financial position?
What strategic projects and acquisitions are performing well?
What progress is being made in decarbonization efforts?
What is the status of the XCarb® recycled and renewably produced steel offering?
