ArcelorMittal Nippon Steel India (AMNS India) has recorded a 23.5 per cent drop in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to $107 million in the quarter ended June, compared to $140 million in the previous quarter.
While announcing June quarter earnings, ArcelorMittal, which has a 60 per cent holding in the joint venture with Nippon Steel, said in its update on AMNS India that Covid-19 had severely disrupted domestic demand particularly during the month of April. ArcelorMittal follows a January to December fiscal year.
AMNS India's crude steel production during the quarter was down 29 per cent quarter-on-quarter to 1.2 million tonnes from 1.7 million tonnes.
However, the company said that month-on-month demand and output were improving with the easing of lockdowns. In June, the firm's annualised production run rate was back to seven million tonnes. AMNS India also said that during periods of weak domestic demand, it took advantage of its coastal location to increase pellet exports.
The world's largest steel maker, ArcelorMittal, posted a net loss of $559 million in the June quarter compared to a net loss of $447 million in the year-ago period. Sales were at $11 billion compared to $19.3 billion in the same period last year.
Commenting on the numbers, Lakshmi N Mittal, ArcelorMittal Chairman and CEO, said that the first six months of the year, and particularly the second quarter, had been one of the most difficult periods in the history of the company, with demand for steel considerably disrupted by the Covid-19 pandemic.
However, he said that there were signs of activity picking up, especially in regions where lockdowns had ended, but added that it was prudent to remain cautious about the outlook.
"Against this context, we are examining what structural changes might be required to ensure the company is well configured to prosper in the coming years as demand recovers," he said.
Regarding AMNS India, the company informed that Odisha Slurry Pipeline Infrastructure, an important infrastructure asset for raw material supply to Hazira steel plant had been secured for a net amount of Rs 1,860 crore.
AMNS India had been securing ancillary units that were not part of the insolvency proceedings for Essar Steel. Earlier this year, it also completed the acquisition of the Bhander Power Plant in Hazira, Gujarat, from Edelweiss Asset Reconstruction Company. Bhander, is a natural gas-based thermal plant with an installed capacity of 500 megawatt (Mw). The other asset that AMNS India is looking take control is the captive port at Hazira for which it has moved Gujarat High Court against Gujarat government, Guajarat Maritime Board (GMB) and Essar Bulk Terminal.