AM/NS India Ebitda declines 39.9% in June quarter on lower shipments

Reports steel shipments of 1.51 MT in quarter, compared with 1.72 MT a year ago and 1.73 MT in previous quarter

ArcelorMittal Nippon Steel India (AM/NS India), a joint venture between ArcelorMittal and Nippon Steel, reported a 39.86 per cent year-on-year (YoY) drop in Ebitda (earnings before interest, taxes, depreciation, and amortisation) at $365 million in the June quarter because of lower shipments after the imposition of export duty.

Sequentially, Ebitda was lower by 22.3 per cent. Steel shipments in the quarter stood at 1.51 million tonnes (MT), compared with 1.72 MT a year ago, and 1.73 MT in the previous quarter.

The company attributed lower shipments to lower production as well as lower demand. The results were also impacted by lower pellet production due to the introduction of export duty and the company said that there was minimal Ebitda contribution from export sales.

Also Read: AM/NS India to invest Rs 273 crore on zero liquid discharge at Hazira

Incidentally, while the export duty on steel was 15 per cent, for pellets it was 45 per cent. Crude steel production of AM/NS India was down by 8.9 per cent at 1.67 MT on account of maintenance.

The AM/NS figures were disclosed as part of ArcelorMittal’s Q2 2022 financial results. The global steel major follows a January-December fiscal year. ArcelorMittal has a 60 per cent equity interest in AM/NS India.

The company said the expansion at Hazira to at least 14.4 MT was in advanced preparation and removal of bottlenecks in existing operations to achieve 8.8 MT by end of 2023 was underway.

While the Indian joint venture’s performance reflected slowing demand and the impact of export duty introduced by the government in May 2022, at $5.2 billion ArcelorMittal’s Ebitda was higher by about 2.2 per cent. Sales at $22.14 billion were higher by 14.47 per cent YoY.

Aditya Mittal, ArcelorMittal chief executive officer, said, “The company had a strong first half with market conditions supporting a fifth consecutive quarter of Ebitda of over $5 billion.”

He added, “The period, however, was overshadowed by the outbreak of war in Ukraine, where we have steel and mining operations, bringing instability and suffering to the country and our 26,000 employees.”

He also said the conflict was impacting growth globally and adding further inflationary pressure, which was spilling over into weakening of demand.

But the long-term outlook for steel demand, Mittal said, remains positive, underpinned by the scale of opportunity related to the energy transition and the continuing growth of developing economies.

ArcelorMittal also announced it had signed an agreement with the shareholders of Companhia Siderúrgica do Pecém (CSP) in Brazil to acquire it for an enterprise value of approximately $2.2 billion.