Analysis of ArcelorMittal H1 2012 versus H1 2011 results
ArcelorMittal's net income for H1 2012 was USD 1.0 billion or USD 0.63 per share as compared to net income for H1 2011 of USD 2.6 billion or USD 1.68 per share.
Total steel shipments for H1 2012 were marginally lower at 43.9 million tonnes as compared with 44.1 million tonnes at H1 2011.
Sales for H1 2012 decreased by 4.5% to USD 45.2 billion as compared with USD 47.3 billion for H1 2011 primarily due to lower average steel selling prices (-5.9%) and marginally lower steel shipments (-0.5%). Depreciation of USD 2.3 billion for H1 2012 was comparable with H1 2011.
Impairment charges for H1 2012 totaled USD 69 million, primarily related to the extended idling of the electric arc furnace and continuous caster at the Schifflange site in Luxembourg (Long Carbon Europe). Impairment expense for H1 2011 was USD 18 million relating to a rolling facility in the Long Carbon Americas segment.
Restructuring charges for H1 2012 totaled USD 297 million and consisted largely of costs associated with the implementation of the Asset Optimization Plan primarily impacting Flat Carbon Europe and Long Carbon Europe operations as well as costs associated with the project to close two blast furnaces, sinter plant, steel shop and continuous casters in Liege, Belgium. Costs related to Liege were recognized following the consultation process with employee representatives. There were no such restructuring charges in H1 2011.
Operating income for H1 2012 was USD 1.8 billion as compared with operating income of USD 3.7 billion for H1 2011. Operating income during H1 2012 was positively impacted by USD 580 million of one time impacts: changes to the employee benefit plans at Dofasco led to curtailment gains of USD 241 million, and the Skyline Steel divestment led to a gain of USD 339 million.
Operating performance for H1 2012 was also positively impacted by USD 295 million of dynamic delta hedge income recognized during the period. Operating performance for H1 2011 was positively impacted by USD 308 million DDH income and a non cash gain of USD 336 million recorded in the first quarter of 2011 relating to the reversal of provisions for inventory write downs and litigation.
Income from equity method investments and other income in H1 2012 was USD 107 million as compared to USD 437 million in H1 2011. Income from equity method investments and other income was lower in H1 2012 on account of lower income from Chinese investees and the impact of disposals (Erdemir, Enovos and Macarthur Coal).
Net interest expense (including interest expense and interest income) was USD 917 million for H1 2012 as compared to USD 916 million for H1 2011.
Due to exchange rate effects, foreign exchange and other net financing costs were USD 394 million for H1 2012 as compared to costs of USD 1.1 billion for H1 2011.
ArcelorMittal recorded an income tax benefit of USD 409 million for H1 2012 as compared to an income tax benefit of USD 105 million for H1 2011.
Loss attributable to non controlling interests for H1 2012 was USD 1 million as compared with gain attributable to non controlling interests for H1 2011 of USD 52 million.
Discontinued operations for H1 2012 was nil as compared to a gain of USD 461 million for H1 2011, including USD 42 million of the post tax net results contributed by the stainless steel operations prior to the spin off of the business into Aperam which was completed on January 25th 2011. The balance of USD 419 million represents a one time non cash gain from the recognition through the income statement of gains losses relating to the demerged assets previously held in equity.
Source - ArcelorMittal