ArcelorMittal Nippon Steel India clocks 59 per cent increase in EBITDA

Sequentially, however, the firm's EBITDA was 21% primarily due to lower steel selling prices and higher costs (including coking coal and power), the company said

ArcelorMittal Nippon Steel India (AM/NS India), a joint venture between ArcelorMittal and Nippon Steel, recorded a 58.75 per cent year-on-year increase in EBITDA to $435 million in the December quarter on higher realisation.

Crude steel production was 1.84 million tonnes (mt) compared to 1.88 mt in the year-ago period. Quarter-on-quarter, however, AM/NS India EBITDA of $435 million was 21 per cent lower as compared to $551 million primarily due to lower steel selling prices and higher costs (including coking coal and power costs), the company said.

The figures were disclosed as part of ArcelorMittal’s Q42021 and FY2021 financial results; the global steel major follows a January-December fiscal year.

For the year, FY21, AM/NS India achieved record levels of production, shipments and EBITDA. It reported an EBITDA of $2 billion compared to $0.7 billion in FY20.

Crude steel production in FY21 at 7.4 mt was higher by 11.7 per cent and steel shipments at 6.9 mt saw an increase of 10.4 per cent. 

ArcelorMittal said that the most significant of its JV and associate assets is its 60 per cent equity interest in AM/NS India. ArcelorMittal’s share of income in JV and associates stood at $2.2 billion in FY21 of which AM/NS India accounted for $0.9 billion. Its other JV and associates include Calvert, VAMA and China Oriental.

Commenting on the performance of AM/NS India, Aditya Mittal, chairman of the joint venture said, ArcelorMittal Nippon Steel India itself achieved record production, shipments and EBITDA in 2021, despite the burden of higher energy and commodity prices.

“We are getting more out of our existing operations at Hazira through debottlenecking and are on track to achieve 8.8 million tonnes capacity by the end of next year. And we are creating new capacity to support India’s growth,” said Mittal.

“India is a vibrant market and we remain committed to playing a strong and responsible role in helping India achieve its ambitions,” he added.

An expansion of Hazira to 14.4 mt has been planned and the company said it was awaiting final environmental permitting approval. Options of expanding capacity to 18 mt at Hazira and an additional 12 mt greenfield project were being studied, it further said.

Globally, ArcelorMittal delivered a strong set of numbers in FY21 and the Q4. In Q4FY21, operating income was at $4558 million compared to $1998 million in Q4FY20. For FY2021, operating income stood at $17 billion and EBITDA at $19.4 billion.