Steel firm AM/NS India's EBITDA drops 62.75% to $162 mn in Dec quarter

Joint venture firm says lower selling price and India's duty on steel exports last year impacted business

ArcelorMittal Nippon Steel India (AM/NS India) reported a 62.75 per cent year-on-year (YoY) drop in EBITDA at $162 million in the December quarter due to lower shipments and selling prices. In the year-ago period, EBITDA was at $435 million for the joint venture between ArcelorMittal and Nippon Steel.

Sequentially, EBITDA (earnings before interest, taxes, depreciation and amortization) at $204 million was lower by 20.58 per cent. Crude steel production and shipments in the quarter were lower on YoY and quarter-on-quarter (QoQ).

Crude steel production in the quarter stood at 1.6 million tonnes, down by 2.3 per cent over the previous quarter and 12.1 per cent from the year-ago period. Steel shipments at 1.6 mt were lower by 2.5 per cent, compared to the previous quarter and 8 per cent from the year-ago period.

While selling prices were lower, the company said its business was impacted after India imposed duties on steel exports before withdrawing the measure late November.

AM/NS India’s EBITDA was at $1.2 billion for the full year, compared to $2 billion the previous year. Crude steel production at 6.7 mt was down 10 per cent YoY and steel shipments at 6.5 mt by 6 per cent.

The numbers were published as part of ArcelorMittal’s results for the three-month and twelve-month periods ended December 31, 2022. The global steel major follows a January-December fiscal year. ArcelorMittal has a 60 per cent equity interest in AM/NS India.

ArcelorMittal reiterated AM/NS India's growth plans, which includes an investment of $7.4 billion for expanding upstream capacity to 15 mt in a plant at Hazira, Gujarat, and a 12 mt greenfield project in Odisha.

Financial results for ArcelorMittal, the world's second largest steel producer, reflected margin compression. The company’s EBITDA in the December quarter stood at $1.26 billion, down by 75 per cent from $5.05 in the year-ago period; net income at $261 million was down by 93.54 per cent from $4.04 billion a year back.

Aditya Mittal, chief executive officer of ArcelorMittal, said that despite challenges the full-year results demonstrated the benefits of a strengthened asset portfolio and the improvements made to the cost base in recent periods.

“This, alongside the mitigatory actions we took in the second half of the year to adapt production levels and optimize energy consumption, has added resilience to our business,” he said.

For the full year, ArcelorMittal's net income was at $9.3 billion compared to $14.9 billion in the previous year.

Mittal also said that evidence suggested that the customer destock seen in the second half of 2022 had peaked, providing support to apparent steel consumption and steel spreads.