PARIS: ArcelorMittal said it would ask shareholders for fresh funds, sell assets and slash costs after falling commodity prices pummelled its performance last year, leaving a gaping hole in its accounts.
The world’s largest steelmaker reported a net loss of $7.95 billion for 2015, more than four times the previous year’s net loss of $1.86 billion in 2014.
To help fill the shortfall, ArcelorMittal said it would tap into shareholders’ pockets via a capital increase of $3 billion by mid-2016, and also sell its stake in Spanish automotive company Gestamp, roughly netting another $1 billion.
The company’s shares plunged on the Paris stock exchange in anticipation of the cash call, dropping by over 6 percent in morning trading.
“Having already seen its market capitalization decline in recent years, ArcelorMittal now can’t avoid a big dilution for shareholders with this capital increase of $3 billion,” brokers Aurel BGC said in a note.
Analysts at Societe Generale called the cash call “disappointing, but certainly a reflection of very difficult market conditions.”
Over half of the 2015 loss was due to writing down in its books the value of its mining operations to reflect the currently lower value of its iron ore, but even excluding exceptional items ArcelorMittal was $300 million into loss, compared to $400 million in 2014.
CEO Lakshmi Mittal acknowledged in a statement that “2015 was a very difficult year for the steel and mining industries... Prices deteriorated significantly during the year as a result of excess capacity in China.”
He, however, said the mining business “is fully focused on adapting to this low price environment and has reduced cash costs by 20 percent compared with an initial target of 15 percent.”
Mittal said a further 10 percent reduction in mining costs is targeted for 2016. Sales dropped 20 percent to $63.6 billion, which mostly reflects falling prices as the company’s iron ore production and steel shipments only dipped marginally.
Net debt dipped to $15.7 billion at the end of 2015 from $15.8 at the end of 2014.
Earnings before taxes, depreciation and amortization (EBITDA) fell by 28 percent to $5.2 billion.
The company announced a new restructuring plan that aims to raise EBITDA per ton to above $85, irrespective of changes in raw material prices. It fell from $86 per ton in the fourth quarter of 2014 to $56 in the fourth quarter of 2015. Overall the latest plan aims to improve structural EBITDA by $3 billion by 2020.
For 2016, the company said that based on current market conditions it expects EBITDA in excess of $4.5 billion this year.
ArcelorMittal also announced it had sold its 35 percent stake in the Spanish company Gestamp, which manufacturers steel parts for automakers, for 875 million euros.
ArcelorMittal to mine stock market after massive loss
ArcelorMittal to mine stock market after massive loss
Saudi Arabia’s cultural sector is a new economic engine between Riyadh and Paris, says ambassador
RIYADH: Culture has become a fundamental pillar in bilateral relations between France and Saudi Arabia, according to the French Ambassador to the Kingdom, Patrick Maisonnave.
Maisonnave noted its connection to the entertainment and tourism sectors, which makes it a new engine for economic cooperation between Riyadh and Paris.
He told Al-Eqtisadiah during the opening ceremony of La Fabrique in the Jax district of Diriyah that cultural cooperation with Saudi Arabia is an important element for its attractiveness in the coming decades.
La Fabrique is a space dedicated to artistic creativity and cultural exchange, launched as part of a partnership between the Riyadh Art program and the French Institute in Riyadh.
Running from Jan. 22 until Feb 14, the initiative will provide an open workspace that allows artists to develop and work on their ideas within a collaborative framework.
Launching La Fabrique as a space dedicated to artistic creativity
The ambassador highlighted that the transformation journey in the Kingdom under Vision 2030 has contributed to the emergence of a new generation of young artists and creators, alongside a growing desire in Saudi society to connect with culture and to embrace what is happening globally.
He affirmed that the relationship between the two countries is “profound, even cultural par excellence,” with interest from the Saudi side in French culture, matched by increasing interest from the French public and cultural institutions unfolding in the Kingdom.
Latest estimates indicate that the culture-based economy represents about 2.3 percent of France’s gross domestic product, equivalent to more than 90 billion euros ($106.4 billion) in annual revenues, according to government data. The sector directly employs more than 600,000 people, making it one of the largest job-creating sectors in the fields of creativity, publishing, cinema, and visual arts.
Saudi Arabia benefiting from French experience in the cultural field
Maisonnave explained that France possesses established cultural institutions, while Saudi Arabia is building a strong cultural sector, which opens the door for cooperation opportunities.
This comes as an extension of the signing of 10 major cultural agreements a year ago between French and Saudi institutions, aiming to enhance cooperation and transfer French expertise and knowledge to contribute to the development of the cultural system in the Kingdom.
He added that experiences like La Fabrique provide an opportunity to meet the new generation of Saudi creators, who have expressed interest in connecting with French institutions and artists in Paris and France.
La Fabrique encompasses a space for multiple contemporary artistic practices, including performance arts, digital and interactive arts, photography, music, and cinema, while providing the public with an opportunity to witness the stages of producing artistic works and interact with the creative process.
