May 7, 2020 / 6:24 AM / 23 days ago

BRIEF-Arcelormittal Sees Q2 EBITDA Within Range Of $0.4 Bln To $0.6 Bln

May 7 (Reuters) - ArcelorMittal SA:

* NET LOSS OF $1.1BN IN 1Q 2020 (ADJUSTED NET LOSS OF $0.6BN, EXCLUDING IMPAIRMENT AND EXCEPTIONAL ITEMS)

* STRONG CASH MANAGEMENT DURING Q1, INCLUDING A WORKING CAPITAL INVESTMENT LIMITED TO $0.1BN; GROSS DEBT OF $13.8BN AND A MARGINAL INCREASE IN NET DEBT TO $9.5BN (DOWN $1.7BN VERSUS 1Q 2019)

* ECONOMIC ACTIVITY AND STEEL MARKET CONDITIONS HAVE SIGNIFICANTLY DETERIORATED SINCE MEASURES WERE INTRODUCED BY GOVERNMENTS WORLDWIDE TO CONTAIN COVID-19 PANDEMIC

* LIQUIDITY AT END OF 1Q 2020 STOOD AT $9.8BN (CONSISTING OF CASH AND CASH EQUIVALENTS OF $4.3BN AND $5.5BN OF AVAILABLE CREDIT LINES5); FURTHER SUPPLEMENTED BY A RECENTLY SIGNED NEW $3BN CREDIT FACILITY

* Q1 OPERATING LOSS OF $0.4BN (VERSUS. LOSS OF $1.5BN IN 4Q 2019)

* Q1 EBITDA INCREASED TO $1.0BN (4.5% HIGHER THAN 4Q 2019)

* OUTLOOK: CERTAIN CASH NEEDS OF BUSINESS ARE NOW EXPECTED TO BE APPROXIMATELY $3.5BN IN 2020 (VERSUS. $4.5BN PREVIOUS GUIDANCE), DUE TO LOWER PLANNED CAPEX (REDUCED TO $2.4BN FROM $3.2BN PREVIOUS GUIDANCE) AND LOWER TAXES

* OUTLOOK: ANNUAL WORKING CAPITAL NEEDS WILL BE DETERMINED BY EXTENT MARKET CONDITIONS RECOVER IN 2H 2020, BUT COMPANY STILL EXPECTS TO RELEASE $1BN IN WORKING CAPITAL PREVIOUSLY TARGETED

* Q1 SALES USD 14.84 BILLION VERSUS USD 19.19 BILLION YEAR AGO

* Q1 COMPANY-COMPILED CONSENSUS: EBITDA USD 867 MILLION

* OUTLOOK: COMPANY’S $2 BILLION ASSET PORTFOLIO OPTIMIZATION PROGRAM CONTINUES TO PROGRESS

* Q1 OWN IRON ORE PRODUCTION 14.4 MT VERSUS 14.1 MT YEAR AGO

* OUTLOOK: GIVEN SUITABLE AND VIABLE BUYERS HAVE EXPRESSED SERIOUS INTEREST IN CERTAIN ASSETS, COMPANY REMAINS CONFIDENT IN COMPLETING PROGRAM BY MID-2021

* Q1 STEEL SHIPMENTS 19.5 MT VERSUS 21.8 MT YEAR AGO

* WHILE IMPACTS OF COVID-19 HAVE INTRODUCED UNANTICIPATED CHALLENGES, COMPANY CONTINUES TO TARGET ACHIEVEMENT OF ITS $7BN NET DEBT OBJECTIVE IN NEAR TERM

* Q1 IRON ORE SHIPPED AT MARKET PRICE 8.6 MT VERSUS 9.2 MT YEAR AGO

* Q1 CRUDE STEEL PRODUCTION 21.1 MT VERSUS 24.1 MT YEAR AGO

* AGAINST BACKDROP OF SIGNIFICANT COST SAVINGS MEASURES BEING TAKEN ACROSS BUSINESS, BOARD DETERMINED IT BOTH APPROPRIATE AND PRUDENT TO SUSPEND DIVIDEND PAYMENTS UNTIL SUCH A TIME AS OPERATING ENVIRONMENT NORMALIZES

* WE WENT INTO COVID-19 CRISIS WITH LOWEST NET DEBT SINCE CREATION OF COMPANY - CEO

* EBITDA FOR 2Q 2020 IS EXPECTED TO BE WITHIN RANGE OF $0.4 BILLION TO $0.6 BILLION

* STEEL SHIPMENTS FOR 2Q 2020 EXPECTED TO BE WITHIN RANGE OF 13.5MT TO 14.5MT

* ACTIONS TAKEN TO REDUCE ALL COSTS IN LINE WITH REDUCED OPERATING RATES IS EXPECTED TO YIELD A REDUCTION IN FIXED COSTS10 BY 25%-30% IN 2Q 2020

* WITHDRAWN ITS FORECASTS FOR APPARENT STEEL CONSUMPTION AND CONSEQUENTLY EXPECTS STEEL SHIPMENTS IN 2020 TO BE BELOW 2019 LEVEL

* ACTIONS TAKEN TO REDUCE ALL COSTS IN LINE WITH REDUCED OPERATING RATES IS EXPECTED TO YIELD A REDUCTION IN FIXED COSTS10 BY 25%-30% IN 2Q 2020, ESSENTIALLY MAINTAINING FIXED COSTS PER-TONNE AT THE 1Q 2020 LEVEL

* Q1 EBITDA USD 967 MILLION VERSUS USD 867 MILLION IN COMPANY-COMPILED CONSENSUS

* AS OF MARCH 31, 2020, THE COMPANY’S CASH AND CASH EQUIVALENTS AMOUNTED TO $4.3 BILLION AS COMPARED TO $5.0 BILLION AS OF DECEMBER 31, 2019 AND $2.2 BILLION AS OF MARCH 31, 2019

* AS OF MARCH 31, 2020, NET DEBT INCREASED MARGINALLY TO $9.5 BILLION AS COMPARED TO $9.3 BILLION AS OF DECEMBER 31, 2019

* AS OF MARCH 31, 2020, THE COMPANY HAD LIQUIDITY OF $9.8 BILLION, CONSISTING OF CASH AND CASH EQUIVALENTS OF $4.3 BILLION AND $5.5 BILLION OF AVAILABLE CREDIT LINES Source text for Eikon: Further company coverage: (Gdansk Newsroom)

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