Results were best in a decade for the firm, which achieved solid production, annualising at 7.3 million tonnes
Announcing the earnings, which were the best in a decade for ArcelorMittal, the company said that in the Q1 of Calendar 2021, AMNS India achieved solid production, annualising at 7.3 million tonnes (MT). The company achieved $403 million EBITDA (with a FY21 run rate of $1.6 billion) with a greater focus on export markets.
The business (AMNS India) is already exceeding the level of EBITDA required to cover the cash needs of the business (maintenance capex and cash interest) of approximately $300 million annually, the company said.
ArcelorMittal said that its income from associates, joint ventures and other investments for Q1 of 2021 was $453 million as compared to $7 million for Q4 of 2020 and $142 million in Q1 of 2020. The income was higher on account of improved results from AMNS India and AMNS Calvert.
ArcelorMittal, on Thursday, reported a strong set of numbers on the back of a demand recovery and surging steel prices. The company reported a net income of $2.3billion in Q1 of 2021 as compared to net income of $1.2 billion and adjusted net income of $0.2 billion in Q4 of 2020. EBITDA of $3.2billion in Q1 of 2021 was 88 per cent higher than Q4 of 2020 EBITDA of $1.7 billion; it was $1.0 billion in Q2 of 2020. Steel shipments were 6.5 per cent higher sequentially.
Aditya Mittal, ArcelorMittal chief executive officer, said, “The first quarter of this year has been our strongest in a decade. While this is naturally a very welcome development following a highly challenging 2020, we are mindful that Covid continues to be a health challenge across the world especially in developing economies.”
“Nowhere is this more obvious at present than in India, where we have our AM/NS India JV with Nippon Steel. Our colleagues in India are sending support wherever we can, including providing daily amounts of oxygen from our sites to local hospitals and setting up temporary medical facilities. Our thoughts are with the people of India as they strive to bring this situation under control,” he added.
As far as growth plans for India are concerned, the company said, near‐term plans involved debottlenecking existing operations (steel shop and rolling parts) to achieve 8.6 million tonne capacity. The medium-term plan was to grow capacity at the Hazira complex to 14 million tonne.
These growth plans would be funded by the joint venture, utilizing the cash the business is generating as well as its balance sheet capacity (it currently has in excess of $1billion in cash).
AMNS India is also developing longer term opportunities for growth and has signed a memorandum of understanding (MOU) with the government of Odisha to explore options for a greenfield integrated steel plant of 12 million tonne capacity in the Kendrapara district.
AMNS India EBITDA performance
Q1 2021: $403 million
4Q 2020: $274 million
Q1 2020: $140 million
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