ArcelorMittal Kriviy Rih, Ukraine-based subsidiary of the world's largest integrated metals and mining company ArcelorMittal, has issued its operational results for 2009.
Accordingly, in 2009 ArcelorMittal Kriviy Rih posted a net loss of UAH 120 million ($15 million) compared to a UAH 4.67 billion ($587 million) net profit in 2008. In 2009, the company's revenues amounted to about UAH 14. 4 billion ($1.8 billion) - down 35 percent year on year, while its gross profit amounted to about UAH 1.8 billion ($226 million) - down 76 percent year on year.
The steelmaker's CAPEX for 2009 fell to UAH 782 million ($98 million); however, for 2010 it has been increased to UAH 1.7 billion ($213 million), focused on modernization and efficiency improvements.
In 2009, ArcelorMittal Kriviy Rih was operating at an average capacity utilization level of 70 percent, its crude steel production went down to 5.039 million mt from 6.215 million mt in 2008, while its shipments of steel products decreased to 4.436 million mt compared to 5.638 million mt in 2008.
Type of product | 2008 (mt) | 2009 (mt) | Change 2009-2008 (%) |
Ore mining | 20,554,083 | 17,842,801 | -13.3 |
Coke | 2,635,686 | 2,364,806 | -10.3 |
Concentrate | 7,802,766 | 7,066,157 | -9.4 |
Agglomerate | 9,652,298 | 7,943,504 | -17.7 |
Pig iron | 5,634,554 | 4,419,455 | -21.6 |
Steel | 6,213,288 | 5,039,268 | -18.9 |
Commercial rolled products | 5,440,118 | 4,502,974 | -17.2 |
In 2009, ArcelorMittal Kriviy Rih's exports reached 83 percent of total sales, as the company placed greater emphasis on reaching export markets given the depressed condition of the domestic market. The company supplied its products to 61 countries during the year in question, with the main markets continuing to be Africa, the Middle East, the Persian Gulf, CIS, EU, Iran and Turkey.
Meanwhile, in 2009 ArcelorMittal Kriviy Rih decreased its sales to the Ukrainian domestic market by 42 percent to 727,000 mt. Given the difficult economic climate, the company cut its prices twice during the year (in April and in May) in order to maintain domestic demand.
"The trend of the last quarter of 2009 was more positive and we began to see the first signs of a steady recovery of demand and production, which offer grounds for optimism moving into 2010. The outlook for the current year remains mixed with a stronger recovery in developing countries, lead by China, while we are expecting weaker growth in more developed economies," ArcelorMittal Kriviy Rih CEO Jean Jouet said.
In terms of cash flow, the most crucial issue in 2009 was the significant delay in the VAT refund. At the end of 2009, ArcelorMittal Kriviy Rih was due UAH 1.549 billion ($194.6 million) compared to UAH 816 million ($102.5 million) at the beginning of the year. Furthermore, the build-up of non-refunded VAT has continued in 2010, increasing by about UAH 200 million ($25 million) each month. Today, the state budget owes ArcelorMittal Kriviy Rih more than UAH 3 billion ($376.9 million). "Recovering the VAT that is owed is vital to the implementation of the 2010 CAPEX program and therefore to the future of the company" reads the company's statement.
$1= UAH 7.96