ArcelorMittal’s Q1 2016 Earnings Preview: Cost Reduction Initiatives To Offset Impact Of Competition From Imported Steels On Earnings

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Arcelor Mittal

We expect ArcelorMittal’s Q1 results to be boosted by a series of steps which are expected to benefit the company’s EBITDA in 2016 by $1 billion relative to its Q4 2015 annual run rate level. These steps include the ramp up of output from the company’s Calvert steel plant (which produces steels used in automotive applications) and improved value-added product mix, a further 10% year-over-year improvement in iron ore mining cash costs, and the impact of cost rationalization initiatives implemented at the company’s NAFTA and Europe steel operations. The impact of these EBITDA-boosting initiatives will be partially offset by the impact of competition from cheap steel imports, which is likely to negatively impact shipments and pricing for the NAFTA and the Europe steel operations (as reflected in our estimates for the same).

MT Pre-earnings 2

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for ArcelorMittal

 

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