ArcelorMittal Posts Loss In Q3, Cuts FY View; Not To Pay FY15 Dividend

(RTTNews) - Steel giant ArcelorMittal (MT) Friday reported a loss for the third quarter, compared to a small profit last year, hit by an inventory write-down as international steel prices declined. Further, the company scrapped its dividend for 2015.

The company now expects full year 2015 EBITDA of $5.2 billion to $5.4 billion, compared to the previous forecast of $6.0 billion to $7.0 billion.

ArcelorMittal expects market conditions to remain challenging in 2016, but has taken some programs to structurally improve EBITDA in 2016.

Citing the challenging global economic conditions and the company's priority to deleverage, ArcelorMittal's Board proposed that no dividend be paid for financial year 2015.

Lakshmi Mittal, ArcelorMittal Chairman and CEO, said, "...the already challenging operating conditions have further deteriorated during recent months, largely due to additional declines in steel prices caused by exceptionally low Chinese export prices."

The company reported a net loss of $711 million or $0.40 per share, compared to net income of $22 million or $0.01 per share in the prior year.

The latest results included $0.5 billion exceptional charge related to the write-down of inventory following the rapid decline of international steel prices.

EBITDA decreased to $1.35 billion from $1.91 billion, while operating income plunged to $20 million from $959 million a year ago.

Sales declined 22.3 percent to $15.6 billion from $20.1 billion a year ago, amid lower average steel selling prices and decreased steel shipments.

NAFTA segment sales declined to $4.371 billion from $5.645 billion, amid a decline in average steel selling prices.

Sales dropped in Brazil too, with the additional impact of foreign exchange and low international steel pricing for both flat and long products.

In Europe, sales dropped to $7.67 billion from $9.69 billion, as steel shipments were lower.

Total steel shipments slid 2.1 percent to 21.1 million metric tonnes, primarily due to lower volumes in NAFTA.

ArcelorMittal expects shipments in 2015 to be slightly higher than 2014.

Full-year guidance on capital expenditure is expected to be about $2.8 billion as compared to the previous guidance of around $3.0 billion.

ArcelorMittal expects to improve EBITDA in 2016 by $1 billion relative to the fourth quarter 2015 run-rate level. The company said it is reducing cash requirements in 2016 by approximately $1 billion as compared to 2015.

This is to be achieved through lower capex spend, decreased cash interest costs, lower cash taxes and suspending the dividend for the financial year 2015.

The stock rose 1.4 percent in Amsterdam in early trade to 5.05 euros.