ArcelorMittal Q1 2014 loss $0.2 billion
This compares to a net loss of $1.2 billion, or $0.69 loss per share for Q4 2013, and a net loss of $0.3 billion, or $0.21 loss per share for Q1 2013.
Total steel shipments for Q1 2014 were 21 million metric tonnes as compared with 20.5 million metric tonnes for Q4 2013 and 20.5 million metric tonnes for Q1 2013.
Sales for Q1 2014, Q4 2013 and Q1 2013 were comparable at $19.8 billion. As compared to Q4 2013, sales in Q1 2014 were impacted by improved steel shipments +2.4% offset in part by lower average steel selling prices -1.3% and seasonally lower market priced iron ore shipments -9% and lower iron ore reference prices -11%.
Depreciation amounted to $1,080 million for Q1 2014 as compared to $1,263 million in Q4 2013 and $1,161 million for Q1 2013. In recent years the Company’s maintenance practices have technically enabled an increase in the useful lives of key plant and equipment. As a result of this development, it is appropriate to extend the depreciation schedules resulting in a lower charge to the income statement.
The full detailed review of useful lives of the assetcCompany expects the annual depreciation charge to be within a range of $3.5 to $4 billion.
Impairment charges for Q1 2014 and Q1 2013 were nil. Impairment charges for Q4 2013 were $304 million primarily including $181 million related to the Thabazimbi mine in South Africa ACIS following the transfer of the future operating and financial risks of the asset to Kumba as part of a new iron ore agreement with Sishen and $61 million for the costs associated with the discontinued iron ore project in Mauritania Mining.
Restructuring charges for Q1 2014 and Q1 2013 were nil. Restructuring charges for Q4 2013 totalled $379 million, primarily related to the announced industrial and social plan for the finishing facilities at Liege, Belgium. The components of Asset Optimization as announced in Q4 2011 are now essentially complete, with all associated costs having been charged to the income statement.
Operating income for Q1 2014 was $674 million, as compared to operating loss of $36 million for Q4 2013 and operating income of $404 million for Q1 2013. Operating result for Q1 2013 was positively impacted by a $47 million fair valuation gain relating to the acquisition of an additional ownership interest in DJ Galvanizing in Canada, and $92 million related to Dynamic Delta Hedge DDH income. The DDH income recorded in Q1 2013 was the final instalment of such income.
Income from investments, associates and joint ventures in Q1 2014 was $36 million as compared to a loss in Q4 2013 of $453 million, and a loss of $18 million in Q1 2013. Income in Q1 2014 was primarily the result of improved performance of Spanish entities.
Loss from investments, associates and joint ventures during Q4 2013 was negatively impacted by a $200 million impairment loss on China Oriental following a revision of underlying future cash flow assumptions, a $111 million impairment charge relating to the agreed sale of the Company’s 50% interest in Kiswire ArcelorMittal Ltd to the joint venture partner Kiswire South Korea, a $111 million impairment charge for Coal of Africa South Africa and a $57 million loss related to the partial disposal of Erdemir.
Net interest expense including interest expense and interest income in Q1 2014 was $426 million, as compared to $419 million for Q4 2013 and $478 million for Q1 2013. The Company expects full year 2014 net interest expense of approximately $1.6 billion.
Foreign exchange and other net financing costs were $380 million for Q1 2014 as compared to $384 million for Q4 2013 and $155 million for Q1 2013.
ArcelorMittal recorded an income tax expense of $61 million for Q1 2014, as compared to an income tax expense of $24 million for Q4 2013 and an income tax expense of $97 million for Q1 2013.
Non-controlling interests for Q1 2014 were a charge of $48 million, as compared to a gain of $89 million for Q4 2013 and a charge of $1 million for Q1 2013. Non-controlling interests charges for Q1 2014 primarily relate to minority shareholders’ share of net income recorded in ArcelorMittal Mines Canada and South Africa.
Health and safety: LTIF rate of 0.85x in Q1 2014 as compared to 0.93x in Q1 2013.
Based on its guidance framework, the company continues to anticipate 2014 EBITDA of approximately $8 billion. ■