EAST CHICAGO | Northwest Indiana's largest steelmaker lost $1.1 billion last year, but shrunk its debt and narrowed its fourth-quarter loss.
The Luxembourg-based steelmaker, which plans to soon idle the Indiana Harbor Long Carbon plant and rolling mill in East Chicago, improved its financial performance in 2014 after losing $2.5 billion the previous year. The company increased steel volume by 4 percent as demand improved, and also expanded its margins by $14 a ton.
ArcelorMittal's EBITDA, or earnings before interest, taxes, depreciation and amortization, rose 8.5 percent to $7.2 billion, while its steel-only earnings per ton were up 23.6 percent. The massive multinational company, which was formed through a series of mergers, also has extensive mining operations. It is the largest steelmaker in the world.
"Stronger steel demand, particularly in our core markets of Europe and the U.S., drove an 8.5 percent improvement in 2014 underlying EBITDA, despite the lower iron-ore price," ArcelorMittal Chairman and CEO Lakshmi Mittal said. "The business benefited from a 3 percent increase in steel shipments, an increase in marketable iron-ore shipments, and the result of cost optimization and restructuring efforts."
Locally, the steelmaker has looked to cut costs by idling the Long Carbon mill, which has lost money every year since 2011. More than 300 jobs could be lost forever. The steelmaker also has plans to idle the No. 1 aluminizing line at ArcelorMittal Indiana Harbor West.
ArcelorMittal pulled in a cash flow of $3.9 billion from operations last year, and managed to reduce its debt by $2 billion in the fourth quarter. The company's net debt hit the lowest point since it was formed in 2006, which cut its interest expense by $300 million.
"Net debt reached $15.8 billion, the lowest level since the onset of the economic crisis, demonstrating continued progress towards our medium term target of $15.0 billion," Mittal said. "For 2015, although operating conditions remain tough, we expect steel markets to continue to improve, particularly for high value-added products such as automotive, where ArcelorMittal is a world leader."
In the fourth quarter, the steelmaker lost $955 million, down from $1.23 billion over the same period in 2013.
ArcelorMittal forecasts that steel markets will continue to grow, and foresees a 4 percent to 5 percent increase in shipments in 2015. The steelmaker however warned investors its EBITDA could decline from $7.2 billion to between $6.5 billion and $7 billion this year.