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ArcelorMittal [MT] Conference call transcript for 2022 q2

2022-07-28 16:30:00

Fiscal: 2022 q2

Daniel Fairclough: Welcome to ArcelorMittal's Second Quarter and First Half 2022 Analyst and Investor Call. This is Daniel Fairclough from the ArcelorMittal Investor Relations team. I'm joined on this call by our CEO, Aditya Mittal; and our CFO, Genuino Christino. Before I hand over to Aditya, I would like to mention a few housekeeping items. Firstly, I want to refer everyone to the disclaimers on Slide 2 of the results presentation that we published on our website this morning. I'd also like to remind everybody that this call is being recorded and is scheduled to last up to 45 minutes. [Operator Instructions] And with that, I would like to hand over to Aditya for some opening remarks.

Aditya Mittal: Thank you, Daniel. Good afternoon and good morning, everyone, and welcome to today's call. As you have read, we have reported very strong results for the first six months of the year, $8 billion net income and earnings per share of approximately $8.5. These numbers reflect the hard work and commitment of everyone at ArcelorMittal. Together, we are taking big steps to strengthen, grow and develop our business to position ArcelorMittal for its future as a leader in the decarbonized world. With this in mind, I'd like to update you on the acquisition of the Texas HBI plant we announced in April. The acquisition is now complete. The plant is achieving its rated capacity for the first time. EBITDA is run rating at $200 million, giving us confidence in our normalized projections of $130 million. The plant is very strategic for us for two reasons: First, it will provide a source of low-carbon high-quality metallics from a region that offers highly competitive energy and ultimately, competitive hydrogen. Secondly, this plant will supply the EF capacity we're building at Calvert and is a key component of our 12 million ton low CO2 highest-quality NAFTA sheet franchise. Our agreed acquisition of CSP in Brazil is similarly exciting. It's a world-class, well-invested modern facility connected to a deepwater port, plus we have important synergies. CSP is also an asset with fantastic potential. Like Texas for the U.S., the state of Serra in Northeastern Brazil is a focus for the development of renewable power and hydrogen in Brazil. It gets the most sun and has plentiful wind, both on and offshore. Massive investment has been committed to this region. So looking forward, I see real potential for CSP to be a globally competitive, low CO2 steelmaking hub. Just like AMNS India, I expect we will look back on the acquisition of Texas HBI and CSP very positively. They represent major milestone in ArcelorMittal's strategic development. Together, these acquisitions add $500 million to normalized EBITDA. This is in addition to our organic pipeline of approved projects that are expected to add $1.2 billion to normalized EBITDA. Lastly, while we're growing the business, we're also returning capital to shareholders. So far this year, we have generated $3.2 billion of free cash, 70% has been returned to shareholders and 30% invested in M&A. We're increasing the M&A commitment today, but this is balanced by our announcement to repurchase a further 60 million shares. This is the maximum amount under our existing authority. Our intention is clear. We will continue to return capital to shareholders whilst growing and developing our business. With that, we are ready to take your questions.

A - Daniel Fairclough: Thanks, Aditya. So we do have a queue of questions ready [Operator Instructions] And we will move to the first question, please, from Alain at Morgan Stanley. Please go ahead, Alain.

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Daniel Fairclough: Great, Moses. I'm very conscious, Aditya and Genuino, we know that we've gone quite a chunk over time. So I think I'll draw things to a close there. Obviously, there's been a lot of ground to cover on the call today, some very exciting developments. And if anybody does have any follow-up questions, please do reach out to me. I'm, of course, available to address those. So otherwise, thank you very much for dialing in to today's call. Thank you for your interest and attention, and we all collectively wish you a very happy summer. Thank you.

Aditya Mittal: Thank you.

Genuino Christino: Thank you, everyone. Bye-bye.

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Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.