MONCLOVA, COAHUILA / ACCESSWIRE / March 1, 2019 / Altos Hornos de México, S.A.B. de C.V. and Subsidiaries (”AHMSA” or ”the Company”) (BMV: AHMSA) reported financial results for the fourth quarter period ended December 31, 2018 (4Q 2018). Financial and operating figures included in this report are unaudited and are based on AHMSA’s operating figures and financial statements; they are prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in U.S. dollars (US$) and metric tons (MT), unless otherwise indicated.
4Q 2018 Highlights
- Adjusted EBITDA reached US$ 7.0 million, an 85.2% decline YoY compared to (US$ 47 million) in 4Q 2017.
- Excluding the effect of the tarriffs pertaining to Section 232, EBITDA reached US$ $27.2 million, a 24% decline year-over-year versus 4Q 2017; for the full year period 2018, this figure was US$ 304.7 million.
- Adjusted EBITDA for the Steel Segment declined by 78.2%, to US$ 13.6 million, compared to US$ 62.4 million in 4Q 2017. This result was explained by the following:
- Steel shipments were 905 thousand MT, an 8.5% decrease compared to the same period in 2017.
- Average price per ton increased by 16.4%, due to favorable market conditions.
- Net Sales rose by 6.5% compared to 4Q 2017, driven primarily by an optimum product mix distribution as well as price improvements.
- Cost of sales increased by 11.7% compared to 4Q 2017, mainly due to higher raw material costs and higher raw material usage.
- Adjusted EBITDA for the Steam Coal Segment reported a loss of US$ 3.5 million compared to a US$ 6.1 million loss in 4Q 2017. The following factors led to the improvement this quarter:
- A slight recovery in the price of coal.
- Greater production efficiencies and improvements in the quality of coal.
Corporate Strategy Update
AHMSA currently maintains a number of strategic investments:
- With regards to the progress rate for the iron ore recovery program, Proyecto Artemisa initiated partial operations as scheduled and we expect that this project will conclude by the end of the second quarter of 2019.
- In order to secure its own supply of metallurgical coal, AHMSA opened the Conchas Sur mine, which is expected to initiate operations during the first quarter of 2020.
- AHMSA continues to move forward on the repairs of 35 coke ovens at our #1 Coking Battery. As a result, annual coke capacity is expected to increase at this plant by approximately 177 thousand MT.
- As part of AHMSA’s investor relations strategy, the redesign of AHMSA’s corporate web site is about to conclude. Our objective is to enhance transparency and strengthen communications with the capital markets.
AHMSA is the largest steel producer in Mexico. The Company was founded in 1942 and began operations in 1944. In December 1991, the Company was privatized and Grupo Acerero del Norte, S.A. de C.V. (GAN) assumed control. In December 1995, GAN incorporated into AHMSA the iron ore and coal mines to convert AHMSA into an integrated steel producer in Mexico with a nominal capacity of 3.8 million MT of liquid steel per year. Since 2007, it has managed the Fénix Project, the most ambitious investment program in the Company’s history aimed at increasing installed capacity by at least 40% and enabling AHMSA to surpass 5 million MT of liquid steel per year following the incorporation of its new electric arc furnace. With this new equipment, AHMSA also expanded its ranges of steel and increased specifications, which allows the Company to enter new market niches.
In 2017, AHMSA held 12% share of the domestic steel market, 22% of the domestic market for flat products and 12% of exports from Mexico of finished steel products. The corporate headquarters and steel mills have an area of approximately 1,200 hectares and is located in Monclova, Coahuila de Zaragoza, 248 km from the U.S. border.
SOURCE: ALTOS HORNOS DE MEXICO, S.A. DE C.V.
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