ArcelorMittal and Nippon Steel India (AM/NS India) reported a 50 per cent higher EBITDA (earnings before interest, taxes, depreciation and amortisation) quarter-on-quarter (QoQ) and 450 per cent year-on-year (YoY) to $607 million in the quarter ended June 30, 2021 on the back of a strong global demand and recent resurgence in the domestic market.
While announcing earnings for the quarter–-the strongest for ArcelorMittal since 2008-– the company said that Q2CY21 crude steel production of AM/NS India remained stable at 1.8 million tonnes (mt) despite Covid-19 headwinds.
The company redirected steel supply to serve a “buoyant export market” to mitigate the negative impact of the second Covid wave on domestic steel demand.
Towards the end of the quarter, however, AM/NS India said, the business saw encouraging signs of domestic demand revival, particularly from the automotive, white goods and infrastructure sectors.
The annualised production of AM/NS India remained unchanged from Q1CY21, at 7.3 Mt.
AM/NS India numbers were released as part of ArcelorMittal’s earnings in the quarter. The global steel major reported $5.1 billion EBITDA in Q2CY21, its strongest quarter since 2008, as steel prices rallied to record high; it was 55.8 per cent higher than in Q1CY21. It was at $707 million in the year-ago period.
Commenting, Aditya Mittal, CEO, ArcelorMittal, said that the second quarter has seen a continued strong recovery backdrop alongside a sustained lean inventory environment.
“This resulted in even healthier spreads in our core markets than in the first three months of the year, supporting the best quarterly and half year result we have reported since 2008.”
Mittal expects demand outlook to improve further in the second half.
The share of JV and associates net income in Q2CY21 improved to $0.6 billion, reflecting continued strong performance at AMNS India and AMNS Calvert, the company said.
Commenting on AM/NS India’s performance, Mittal, chairman AM/NS India, said, “AM/NS India’s progress in the 18 months since its inception is an excellent foundation to advance our plans to pursue both organic expansion and strategic opportunities in support of India’s growing economy.”
AM/NS India’s “strong” cash generation and “balance sheet strength” will continue to support funding requirements of long-term growth plans, the company said.
AM/NS India has medium and long-term plans to ramp up capacity to take its steelmaking capacity to 30 mt; the pellet plant in Odisha is nearing completion of doubling capacity to 12 mt.