The first six months of 2020, and especially the second quarter, were one of the most difficult periods in the history of the world's largest steel company, ArcelorMittal, said its CEO Lakshmi N. Mittal.
According to Mr. Mittal, global steel demand has dropped significantly as a result of the COVID-19 pandemic.
“We have implemented a set of measures that include reducing production, capex and fixed costs, as well as raising capital to further strengthen the balance sheet,” said the head of ArcelorMittal.
However, the world's largest steelmaker reported higher-than-expected earnings in the second quarter and noted that its major markets are showing signs of recovery, albeit from extremely low levels.
The company's second-quarter EBITDA, which is closely watched by investors, was $ 707 million, down from last year but well above the company's poll average of $ 482 million.
“There are currently signs of increased activity, especially in regions where blockages have ended, but it is obviously wise to remain cautious about the outlook,” Mittal said.
The automotive sector, a key customer of ArcelorMittal, has resumed production and is recovering fairly quickly in the United States with a recovery in demand for machinery and metal products in Europe.
The decrease in demand led to a sequential reduction in steel supplies in the second quarter by 23.7% (supplies in the first half of 2020 are 23% lower than in the previous year).
ArcelorMittal had an operating loss of $ 0.3 billion in Q2 2020 ($ 0.6 billion in 1H 2020 includes an impairment of $ 0.8 billion).
At the same time, the company's gross debt of $ 13.5 billion and net debt of $ 7.8 billion as of June 30, 2020 is the lowest level achieved since the creation of ArcelorMittal. Earlier, the company said it would not resume dividend payments until this goal is achieved.