Link Securities | The steel multinational ArcelorMittal (MTS) has ruled out that the explosion recorded on Tuesday in the batteries of its factory in Gijón, in which three workers were injured and are hospitalised with a guarded prognosis, will affect its production, according to the newspaper Expansión. It could, however, happen that some rolling mills such as plate, rail or wire rod, which are fuelled by coke gas, may have…
Morgan Stanley | STEEL Alain Gabriel publishes today a recap presentation with the main figures and trends in European steel. His main OWs remain Arcelor and voestalpine (the latter he upgraded to OW last week) and Acerinox and Outokumpu in stainless steel. STEEL Arcelor- trades at a steep discount to its cyclical low multiple with normalised earnings and offers an interesting risk-return 12 months ahead. The new ebitda calculation perimeter,…
Morgan Stanley: According to Reuters, employees have rejected the agreement to end the strike at the Lázaro Cardenas plant, which has been in place since 24 May. Alain Gabriel (analyst) points out that the blockade is likely to have a significant impact on the North American division (the plant represents almost half of the division’s capacity). In this sense, an 80% utilisation would imply an annual production of up to…
Morgan Stanley: Our analyst Alain Gabriel believes that steel plate production in Europe is set to fall by 10% in the short/medium term, due to increased financing pressure, decarbonisation policies and sanctions imposed on Russian imports. Returns for the sector in Europe have been lower (4.3% post-tax RoCE 2009-20) than expected over the last 10 years and Gabriel believes this has to do with a utilisation rate below potential. The…
Link Securitites | The company achieved a turnover of $18.501 billion in 1Q2024, 12% lower than in 1Q2023, EFE reported yesterday. In turn, ArcelorMittal achieved operating cash flow or EBITDA in 1Q2024 of $1,956 million, 8.6% lower than in the same period of 2023. Finally, the group’s attributable net profit amounted to $ 938 million (€875 million) in 1Q2024, 14.4% lower than in 1Q2023. It should also be noted that…
Morgan Stanley| Arcelor Mittal (MTS) has reached an agreement to purchase Apollo’s stake in Vallourec (French steel tube manufacturer), equivalent to 65.2 million shares (28.4%) for a total of €955 million. The acquisition is expected to be completed in 2H24, once all regulatory approvals are in place. Alain Gabriel acknowledges that the purchase has been concluded at a reasonable valuation, but expects more clarity on the extent of synergies and/or…
Banco Sabadell: 4Q’23 results slightly better than expected 4Q’23 EBITDA slightly better than expected ($1,266m versus $1,233m BS(e) and $1,200m consensus), although contracting versus 3Q’23 due to a lower average price, something we see in all its geographies. Deliveries fell at the aggregate level compared to Q3’23, although in North America (34% EBITDA) they rebounded slightly (+2.4%), which anticipates some improvement. The lower part of the income statement is impacted…
Morgan Stanley | Alain Gabriel highlights the news published by La Republicca that ArcelorMittal would be looking to sell its 40% stake in Acciaierie d’Italia (ADI), which has been underperforming (<4mta vs ~10mta). ADI’s earnings are not reported under Arcelor’s EBITDA, but under those of the Associates and JVs. Alain Gabriel estimates that EBIDA attributable to ADI was US$170mn in 2022. The article reported that Arcelor wanted to sell its…
Link Securities| Two consortiums participated by ArcelorMittal and EDP Renovables have been awarded €2 billion for the development of two clean hydrogen hubs in the USA. The steelmaker and its partners will receive €950 million in government aid, while the alliance in which the renewable energy company has a stake will receive more than €1.1 billion. The MTS consortium, called the Midwest Clean Hydrogen Alliance (MachH2), includes other oil industry…
Banc Sabadell | According to press reports, ArcelorMittal (MTS) is considering a bid for US Steel, although there is no certainty at this stage that the deal will go ahead. US Steel on Sunday rejected an offer from Cleveland-Cliffs that values the company at around $7.3 billion (~€6.7 billion) and represents a 43% premium on its share price. Also US steelmaker Esmark reportedly launched an offer of $7.8 billion (~€7.15…