New Delhi, Jul 30 (PTI) Global steel giant ArcelorMittal on Thursday posted a net loss of USD 559 million for the second quarter ended June 30, and termed it as the most difficult period in its history amid COVID-19 pandemic.
The world's largest steelmaker had clocked a net loss of USD 447 million in the year-ago quarter, the company said in a statement.
The Luxembourg-headquartered integrated steel and mining company follows January-December fiscal year.
Sales in April-June quarter stood at USD 11.0 billion, as compared to USD 19.3 billion in the corresponding period of 2019, it said.
Total steel shipments in the second quarter of 2020 declined 23.7 per cent to 14.8 million tonne (MT), significantly impacted by the adverse effects of COVID-19 pandemic across all regions.
Operating performance in 2Q 2020 reflects the negative impact of the COVID-19 pandemic primarily on the steel business, with reduced demand leading to a 23.7 per cent sequential reduction in steel shipments, it said.
'The first six months of the year, and particularly the second quarter, have been one of the most difficult periods in the history of the company, with demand for steel considerably disrupted by the COVID-19 pandemic,' ArcelorMittal Chairman and CEO, Lakshmi N Mittal, said.
He further said the company responded swiftly to protect people, assets, profitability and cashflow, ensuring it is in as strong a position as possible to weather this very challenging period.
'We implemented a comprehensive range of measures that include reducing production, capex and fixed costs, as well as raising capital to further strengthen the balance sheet which has taken our net debt close to the level at which we will prioritise returns to shareholders,' he added.
Mittal said there are now signs of activity picking up, especially in regions where lockdowns have ended, but clearly it is prudent to remain cautious about the outlook, and added that the company is examining what structural changes might be required to ensure the company is well configured to prosper in the coming years as demand recovers.
'In conclusion, it has been an unexpectedly challenging period for everyone. The remainder of the year will no doubt continue to be challenging but I believe we are well prepared to increase production and capture the improvement in demand when it comes,' he said.
The company said as of June 30, 2020, its cash and cash equivalents amounted to USD 5.7 billion and gross debt declined to USD 13.5 billion.
'As of June 30, 2020, net debt decreased to USD 7.8 billion as compared to USD 9.5 billion as of March 31, 2020, driven by proceeds from the capital raised offset in part by foreign exchange on debt and working capital outflow,' ArcelorMittal said.
The company said while the speed and trajectory of the demand recovery post COVID-19 pandemic remain uncertain, its core markets are showing signs of recovery from exceptionally low levels, and the company will continue to align production levels to demand, with the ability and flexibility to restart hot idled capacity as the recovery progresses.
'The Company continues to expect certain cash needs of the business to be approximately USD 3.5 billion in 2020 and remains focused on its FY 2020 USD 1 billion working capital efficiency target,' it said.
The firm's USD 2 billion asset portfolio optimisation programme continues to progress, and with suitable and viable buyers having expressed serious interest in certain assets, it remains confident in completing the program by mid-2021, it added.
About ArcelorMittal Nippon Steel India, it said its operations were impacted by COVID-19 pandemic during 2Q 2020 with lockdown measures (in particular impacting April 2020).
ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 countries. It is among one of the world’s five largest producers of iron ore and metallurgical coal.
In 2019, ArcelorMittal had revenues of USD 70.6 billion and crude steel production of 89.8 MT, while own iron ore production reached 57.1 MT. PTI NAM BAL