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ArcelorMittal Reports Third Quarter 2012 And Nine Months 2012 Results

Regulatory News:

ArcelorMittal (referred to as “ArcelorMittal” or the “Company”) (MT (New York, Amsterdam, Paris, Luxembourg), MTS (Madrid)), the world’s leading integrated steel and mining company, today announced results 1 for the three and nine- month periods ended September 30, 2012.

  • Health and safety performance: LTIF rate 2 of 1.0x in 3Q 2012 as compared to 0.8x in 2Q 2012 and 1.5x in 3Q 2011
  • EBITDA 3 of $1.3 billion in 3Q 2012 (including negative $0.1 billion from employee benefit charges 4) as compared to $2.4 billion in 2Q 2012 (which included positive $0.3 billion of gains on subsidiary divestments 5)
  • Steel shipments of 19.9 Mt in 3Q 2012, a decrease of 8.3% as compared to 2Q 2012 and 5.7% below 3Q 2011
  • 14.3Mt iron ore produced in 3Q 2012, up +1.3% YoY; 7.1Mt shipped and reported at market price 6, up +6.7% YoY
  • Net debt 7 increased by $1.2 billion during 3Q 2012 to $23.2 billion, driven by negative operating cash flow (including a $0.3 billion investment in working capital) and negative foreign exchange impacts partially offset by proceeds from asset disposal and an issuance of perpetual securities
  • Liquidity 19 of $13.4 billion at end 3Q 2012, with an average debt maturity of 6.2 years
  • Asset optimization plan progressing: Closure of liquid phase at Liege, Belgium 8 agreed; announced intention to launch a project to permanently close the liquid phase of Florange in France
  • Management gains plan completed with $4.8 billion savings achieved ahead of schedule

Outlook and guidance:
  • The Q3 2012 fall in the iron ore price 9 and the weaker global economic backdrop adversely impacted steel prices and steel volumes as well as the profitability of our mining operations, affecting our previous expectations for group profitability in 2H 2012
  • The Company now expects to achieve FY 2012 EBITDA of approximately $7 billion
  • Iron ore shipments remain on track to increase by approximately 10% in FY 2012 compared to FY 2011
  • Excluding any proceeds from future asset sales, net debt is expected to be approximately $22 billion by year end; deleveraging is a priority as the Company continues to target an investment grade credit rating
  • Considering the challenging global economic conditions, and the Company’s priority to deleverage, ArcelorMittal’s Board of Directors proposes reducing the annual dividend payment to $0.20/share 10 from 2013 (from $0.75/share in 2012)
  • 2012 capex is expected to be approximately $4.5 billion; ArcelorMittal Mines Canada expansion to 24mtpa 11 on track for ramp up during 1H 2013

Financial highlights (on the basis of IFRS 1 , amounts in USD):
(USDm) unless otherwise shown   3Q 12   2Q 12   3Q 11   9M 12   9M 11
Sales   $19,723   $22,478   $24,214   $64,904   $71,524
EBITDA   1,336   2,449   2,408   5,757   8,403
Operating income / (loss)   (49)   1,101   1,168   1,715   4,851
Income from discontinued operations   -   -   -   -   461
Net income / (loss)   (709)   959   659   261   3,263
Basic earnings / (loss) per share (USD)   (0.46)   0.62   0.43   0.17   2.11
Continuing operations                    
Own iron ore production (Mt)   14.3   14.4   14.1   41.9   39.0
Iron ore shipments at market price (Mt)   7.1   8.2   6.7   22.1   19.6
Crude steel production (Mt)   21.9   22.8   22.4   67.4   70.2
Steel shipments (Mt)   19.9   21.7   21.1   63.8   65.2

EBITDA/tonne (USD/t) 12
  67   113   114   90   129

Mr. Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal, commented:

The already fragile global economy was further impacted in the third quarter of 2012 by the slowdown in China. This resulted in very challenging operating conditions for ArcelorMittal, which are expected to continue in the fourth quarter. Against this backdrop, the Company is focussed on delivering its plan of asset optimization, net debt reduction and productivity and efficiency improvements.

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