MONCLOVA, Mexico--(BUSINESS WIRE)--Altos Hornos de México, S.A.B. de C.V. and Subsidiaries (“AHMSA” or “the Company”) (BMV: AHMSA) reported financial results for the period ended March 31, 2018 (1Q 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$) and metric tons (MT).
1Q 2018 Highlights
- Adjusted EBITDA reached US$ 64 million, a 109% increase compared to US$ 30 million in 1Q 2017.
- Steel Segment Adjusted EBITDA increased 101% to US$ 81 million from US$ 40 million in 1Q 2017.
- Steel volume was 1,012k MT, an 18.2% increase, compared to the same period in 2017.
- Average realized prices increased by 14.8%, due to stronger international steel market conditions.
- Net Sales grew 36%, compared to 1Q 2017, driven by higher volume and better price conditions.
- During March, the Company reached a new monthly record in terms of shipments, reaching 364 thousand TM.
- Cost of sales increased by 35% compared to 1Q 2017, mainly due to higher raw material costs and usage.
- Coal Segment adjusted EBITDA reached a loss of US$ 12 million compared to a loss of US$ 5 million in 1Q 2017. This was mainly explained by the following factors:
- Adverse economic environment that negatively affected the price calculation according to the formula established in the contracts, which considers a 35% price adjustment due to the exchange rate fluctuation, and that was insufficient to offset the higher costs incurred for the operation of the Dos Republicas mine.
- Reduction in the monthly shipment volume requested by CFE1in order to lower its inventory.
- Currently, AHMSA continues to advance in a number of strategic investments:
- During the month of March 2018, the Company began the testing process for the vacuum degassing system, which has proven to be satisfactory. The production phase is estimated to begin towards the end of 2Q 2018.
- The Company is in the middle of the implementation of Proyecto Artemisa; the SAG mill is expected to be installed by mid-2018, which will improve the recovery of our iron mineral reserves and optimize iron ore concentrate production.
- AHMSA continues to report advances in the repair project of 35 coke ovens at our #1 Coking Battery. The project is expected to increase annual coke capacity by approximately 177 thousand MT.
- The Company is expecting the bidding process announcement for renewal of the steam coal contracts. The current contracts expire in December.
- Plans are underway for the re-instatement of AHMSA’s shares on the Mexican Stock Exchange (BMV).
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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.
|CFE. Comisión Federal de Electricidad (Federal Electricity Commission).|