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 fourth quarter and twelve months ended December 31, 2017. Financial and operating figures included in this report are unaudited and are based on AHMSA operating figures and financial statements; they are prepared in accordance with International Financial Reporting Standards (IFRS) and are expressed in U.S. dollars (US$) and metric tons (MT).
4Q 2017 Highlights
- Adjusted EBITDA reached US$ 47 million a 96% increase versus 4Q 2016 Adjusted EBITDA of US$ 24 million.
- Steel Segment Adjusted EBITDA was US$ 62 million, a 104.1% increase versus US$ 31 million in 4Q 2016.
- Steel volumes were 989k MT, a 1.6% decline from the same period in 2016.
- Average realized prices increased by 21% due to improved steel markets, while costs of sales increased by 17% mainly due to higher raw material costs and energy prices.
- Coal Segment adjusted EBITDA declined to a loss of US$ 6 million compared to a loss of US$ 1 million in 4Q 2016 as we continued facing challenges with the pricing mechanism on supply contracts with CFE.
2017 Full-Year Highlights
- Adjusted EBITDA reached US$ 180 million, a 23% decrease versus 2016 Adjusted EBITDA of US$ 234 million.
- Steel Segment Adjusted EBITDA was US$ 216 million, a 13% decline from US$ 248 million in 2016.
- Steel volumes reached 3.7 million MT, 11% below 2016
- Average realized prices rose 24% due to an improved steel market, which was offset by the 12.4% increase in cost of sales driven by lower productivity at our iron ore and metallurgical coal mines.
- Coal Segment adjusted EBITDA registered a loss of US$ 11 million for 2017 compared to a profit of US$ 4 million in 2016.
- In preparation for its re-emergence as a publicly-traded company, AHMSA’s shareholders appointed three new independent directors. An additional director will be appointed at a later date.
- Plans are underway for the re-instatement of AHMSA’s shares on the Mexican Stock Exchange (BMV).
- A number of strategic investments continue to progress:
- During the second quarter of 2018, the Company expects to launch its new vacuum degassing system as part of the strategy to migrate towards higher value-added products.
- we achieved 45% implementation of Proyecto Artemisa and anticipate that the SAG mill will be installed by mid-2018, which will help to enhance recovery of our iron mineral reserves and restore historical iron ore concentrate production.
- AHMSA continues to report advances in the repair of 35 coke ovens at our #1 Coking Battery. The project is expected to increase annual coke capacity by approximately 177 thousand MT.
- We are in the process of renegotiating both of our steam coal contracts with the CFE, in advance of the expiration of these contracts in 2018.
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