INTERNATIONAL
ArcelorMittal sees 60% jump in quarterly EBITDA Steel Insights Bureau
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rcelorMittal has recorded its best quarter and strongest six-month financial performance since 2008 with operating profit or EBITDA of $5.1 billion for second quarter of 2021 as compared to $3.2 billion in the first quarter, reflecting the robust operating environment. EBITDA per ton of $314 was at second highest level ever achieved, the company said. Steel production was up 6.5 percent with strong performance in several geographies following sharply improved results across all steel segments reflecting the continued positive evolution of steel spreads. “Demand continued to improve through the first half, which coupled with lean inventories supported significant increases in steel spreads. Given order book and contract lags, this improvement is not yet fully reflected in the results,” ArcelorMittal told investors. The $8.3 billion EBITDA and $6.3 billion net income is strongest half yearly performance since 2008. The figures include $1 billion share of JV and associates income EBITDA improving ($bn)
Net debt declining ($bn)
reflecting strong performance at AM/NS India and AM/NS Calvert. The company again ended the period with the lowest net debt level at $5 billion. About $2 billion free cash flow generated in first half of 2021 (of which $1.7 billion in Q2), despite $3.5 billion investment in working capital. Progress on decarbonisation
ArcelorMittal has set out a new pathway to reduce its group wide carbon emissions intensity by 25 percent by 2030 (including a 35 percent reduction in Europe). It anticipates that achieving the new plan will cost approximately $1 billion, gross before government support. These accelerated targets include the world’s first full-scale zero carbon-emissions steel plant in Spain by 2025. It recently announced plans to cut emissions in Spain and transform ArcelorMittal Sestao into the world’s first full-scale zero carbon emissions plant. This development supports producing greater volumes of green steel by 2030 (a combination of physical zero carbon emissions steel, and XCarb branded products). “We want to lead on sustainability within the steel industry, through leadership on employee safety and our goal of zero harm, through our leadership on diversity, and through our leadership of the global transition to low carbon steel making, including our technology and innovations and our efforts to inform and influence supportive policy,” the company said. Its newly published carbon report highlights the strategy to
“$8.3 billion EBITDA and $6.3 billion net income is strongest H1 performance since 2008. It includes $1 billion share of JV and associates reflecting strong performance at AM/NS India and AM/ NS Calvert.” achieve a 25 percent reduction in group wide carbon emissions intensity by 2030 and net zero by 2050. Essentially there are 5 key levers: ♦ Steelmaking transformation: Switching from BF-BOF to DRI/EAF; utilising natural gas until green hydrogen is available ♦ Energy transformation: Shifting from high emitting fossil fuel-based energy to low and zero emission forms of energy ♦ Increased use of scrap ♦ Sourcing clean electricity: through the purchase of renewable energy certificates and direct purchase agreements ♦ Offsetting residual emissions Tie-up with Spanish government
ArcelorMittal in July signed a memorandum of understanding (MoU) with the Spanish Government that will see a €1 billion investment in decarbonisation technologies at ArcelorMittal Asturias’ plant in Gijón and that ArcelorMittal Sestao will become the world’s first full-scale zero carbon-emissions steel plant. The investments will reduce CO2 emissions at ArcelorMittal’s Spanish operations by up to 4.8 million tons, which represents approximately 50 percent of emissions, within the next five years.
Steel Insights, August 2021
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