Jaway Stainless Steel

ArcelorMittal announces Q2 and H1 2011 results

ArcelorMittal has announced results for the three and six month periods ended June 30th 2011.

ArcelorMittal's net income for the 6 months ended June 30th 2011 was USD 2.6 billion as compared with net income of USD 2.3 billion for the 6 months ended June 30th 2010. Total steel shipments for the 6 months ended June 30th 2011 were 44.1 million tonnes as compared with 43.3 million tonnes for the six months ended June 30th 2010.

Sales for the 6 months ended June 30th 2011 increased by 25.9% to USD 47.3 billion as compared with USD 37.6 billion for the six months ended June 30th 2010. Sales were higher during the first half of 2011 as compared to the first half of 2010 primarily due to higher average steel selling prices and slightly higher steel volumes. Depreciation expense for the six months ended June 30th 2011 remained essentially flat at USD 2.3 billion as compared to USD 2.2 billion in the six months ended June 30th 2010.

Impairment expense for the six months ended June 30th 2011 was USD 18 million relating to a rolling facility in the Long Carbon America segment as compared to impairment expenses for the six months ended June 30th 2010 of USD 118 million relating to the sale of the Anzherkoye steam coal mine in Russia.

Operating income for the six months ended June 30th 2011 was USD 3.7 billion, an increase of 68.9% as compared with operating income of USD 2.2 billion for the six months ended June 30th 2010. Operating performance for the six months ended June 30th 2011 was positively impacted by a non cash gain of USD 336 million recorded in the first quarter relating to the reversal of provisions for inventory write downs, triggered by improved market conditions, and reversal of provisions for litigation.

In addition, operating performance for the six months ended June 30th 2011 included a non cash gain of USD 308 million related to unwinding of hedges on raw material purchases as compared to USD 181 million recorded in the six months ended June 30th 2010. Income from equity method investments and other income for the six months ended June 30th 2011 was USD 437 million as compared to USD 270 million for the six months ended June 30th 2010. Income was higher during the first half of 2011 due to improved performance of joint venture investees.

Net interest expense (including interest expense and interest income) for the six months ended June 30th 2011 was higher at USD 916 million as compared to USD 656 million for the six months ended June 30th 2010 primarily due to the impact of exchange rate fluctuations and higher interest expense due to new bonds issued in 2010 and first quarter of 2011.

As a result of hedging transactions undertaken by the Company in December 2010, there was minimal mark to market losses during the first half of 2011 with respect to the embedded derivatives in ArcelorMittal's convertible bonds issued in 2009 and the related call options. During the six months ended June 30th 2010, the Company had recorded a non cash gain of USD 696 million as a result of these mark to market adjustments.

ArcelorMittal's net income for the three months ended June 30th 2011 was USD 1.5 billion as compared with net income of USD 1.1 billion for the three months ended March 31st 2011 and net income of USD 1.7 billion for the three months ended June 30th 2010.

Total steel shipments for the three months ended June 30th 2011 were 22.2 million tonnes as compared with 22 million tonnes for the three months ended March 31st 2011 and 22.3 million tonnes for the three months ended June 30th 2010.

Sales for the three months ended June 30th 2011 increased 13.3% to USD 25.1 billion as compared with USD 22.2 billion for the three months ended March 31st 2011 and were up 24.7% as compared with USD 20.2 billion for the three months ended June 30th 2010. Sales were higher during the second quarter of 2011 as compared to the first quarter of 2011 primarily due to higher average steel selling prices (+10.9%).

Depreciation expense for the three months ended June 30th 2011 remained essentially flat at USD 1.2 billion as compared to USD 1.1 billion for both the three months ended March 31st 2011 and June 30th 2010.

Impairment expense for the three months ended June 30th 2011 was nil as compared to impairment expense for the three months ended March 31st 2011 of USD 18 million relating to costs in a rolling facility in the Long Carbon America segment. Impairment expense for the three months ended June 30th 2010 was USD 118 million related to the Anzherkoye steam coal mine in Russia.

Operating income for the three months ended June 30th 2011 was USD 2.3 billion as compared with operating income of USD 1.4 billion for the three months ended March 31st 2011 and operating income of USD 1.6 billion for the three months ended June 30th 2010.

Operating performance for the three months ended March 31st 2011 was positively impacted by a non cash gain of USD 336 million related to the reversal of provisions for inventory write downs, triggered by improved market conditions, and reversal of provisions for litigations. Operating income for the three months ended June 30th 2011 included a non cash gain of USD 189 million relating to unwinding of hedges on raw material purchases as compared to non cash gains relating to such unwinding of USD 119 million and USD 92 million recorded in the three months ended March 31st 2011 and June 30th 2010, respectively.

Financial highlights on the basis of IFRS:

Item Q2 '11 Q1 '11 Q2 '10 H1 '11 H1 '10
Sales 25,126 22,184 20,154 47,310 37,582
EBITDA 3,413 2,582 2,809 5,995 4,510
Operating income 2,252 1,431 1,603 3,683 2,180
Income from discontinued operations - 461 127 461 179
Net income 1,535 1,069 1,706 2,604 2,346
Basic EPS (USD) 0.99 0.69 1.13 1.68 1.55
Own iron ore production (Mt) 13.1 11.8 12.8 24.9 23.4
Iron ore shipment (Mt) 7 5.9 6.9 12.9 12.3
Crude steel output (Mt) 24.4 23.5 24.3 47.9 46.8
Steel shipments (Mt) 22.2 22 22.3 44.1 43.3
EBITDA/tonne (USD/t) 154 118 126 136 104


In USD millions unless otherwise shown

Mr LN Mittal chairman & CEO of ArcelorMittal said that "As expected the company has delivered a strong performance in the second quarter of 2011 underpinned by higher steel selling prices. Although the third quarter will experience some seasonal impact, we do not expect this to be as pronounced as last year, and overall the group's performance in the second half of 2011 should compare favorably with the second half of 2010."