ArcelorMittal net loss widens in Q4; cuts capex, no dividend

ArcelorMittal today said its net loss widened to USD 6.69 billion in the December quarter as it faced a "very difficult" 2015, which witnessed iron ore and steel prices slide further.
The world's largest steel player, led by NRI billionaire Lakshmi Niwas Mittal, had posted a net loss of USD 955 million in the year-ago period, it said in a regulatory filing.
The Luxembourg-headquartered company's revenue fell by 25 per cent to USD 13.98 billion in the October-December quarter of 2015, from USD 18.72 billion in the same quarter of 2014 fiscal. The firm follows January-December as its fiscal year.

For the entire 2015, the firm reported net loss of USD 7.9 billion including USD 4.8 billion impairments (primarily due to mining impairments) and USD 1.4 billion of exceptional charges (primarily related to the write-down of inventory following the rapid decline of international steel prices).
The company also announced a proposed capital raising of USD 3 billion, which alongside sale of its stake in Gestamp for around USD 978 million would reduce pro forma net debt as of December 2015 by USD 4 billion to below USD 12 billion.
Mittal said: "2015 was a very difficult year for steel and mining industries. Although demand in our core markets remained strong, prices deteriorated significantly during the year as a result of excess capacity in China."

Throughout the year the firm "rigorously" focused on implementing a series of measures aimed at reducing costs and ensuring the business is adapted for these tough market conditions, he added.

As a result of these measures ArcelorMittal succeeded in ending the year with net debt slightly below the end of 2014 despite significantly lower EBITDA, Mittal said.
"Regrettably we have announced a disappointing net loss which includes non-cash impairment charges on our mining assets as a result of the very considerable fall in the iron-ore price," he added.
The mining business is fully focused on adapting to this low price environment and has reduced cash costs by 20 per cent compared with an initial target of 15 per cent. A further 10 per cent reduction is targeted for 2016, he said.

Mittal said the firm's priority is to ensure delivery on financial targets and strategic projects.
"We have today announced a new strategic plan for the period to 2020 following a detailed analysis of performance improvement potential across the group.
"Action 2020 sets out specific targets for each business segment which combined aim to achieve a further USD 3 billion of EBITDA improvement potential and enable business to generate USD 2 billion of annual free cash flow," he added.
Reducing net debt remains an important priority and given market conditions it is prudent to take proactive steps to accelerate progress, Mittal said.

"We have today announced sale of our minority shareholding in Gestamp, and are taking further steps to reduce net debt," he added.
The firm announced sale of its 35 per cent stake in automotive components maker Gestamp Automocion to the majority shareholder, the Riberas family, for a cash consideration of 875 million euro (about USD 978 million).