AHMSA Announces Third Quarter 2019 Results MONCLOVA,

New Post Public Reply Private Reply Replies (0) Message Board
News Desk 2022
65
AHMSA Announces Third Quarter 2019 Results

MONCLOVA, Coahuila, Oct. 26, 2019 (GLOBE NEWSWIRE) -- Altos Hornos de México, S.A.B. de C.V. and Subsidiaries (“AHMSA” or “the Company”) (BMV: AHMSA) reported financial results for the Third Quarter period ended September 30, 2019 (3Q 2019). 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.

3Q 2019 Highlights

  • Adjusted EBITDA was US$ (40.4) million, a 149.6% decline compared to (US$ 81.5 million) in 3Q 2018.   
  • Adjusted EBITDA for the Steel Segment was US$ (31.0) million, a 132.1% decline compared to US$ 96.6 million in 3Q 2018. This result was explained by the following:
    • Steel shipments were 733 thousand MT, a 16.9% decrease.
    • Average price per ton declined by 20.5%, due to unfavorable steel market conditions.
    • Net Sales declined by 34%, driven by a lower price environment, as well as weaker demand for our main products.
    • Cost of sales decreased by 19.0%, due to lower production volumes.  
  • Adjusted EBITDA for the Steam Coal Segment  reported a loss of US$ 6.9 million, compared to a loss of US$ 9.1 million in 3Q 2018, due to an improvement in prices derived from the new CFE contract.

Corporate Strategy Update

During the quarter, the Company has maintained the previously-implemented strict cost-control measures, in order to reduce expenses, well as the sales process of properties, aircraft, vehicles and various assets that are not required for AHMSA’s operation.

AHMSA is exploring various capitalization options and/or associations with a variety of industrial and financial groups; there is, however, so signed agreement at this time.

Currently, the Company is carrying out various strategic investments:

  • The Artemisa project is in its final construction stage; we expect this project will conclude at the end of 2Q20. Artemisa will allow the Company to maximize its iron ore reserves; the project has partially initiated operations.
  • The beginning of project Conchas Sur is set to start and was re-scheduled for the beginning of second quarter 2020; this was due to delays in the external infrastructure installation of the mine. This project will permit the Company to secure its own supply of metallurgical coal in the long term.

Financial Highlights

      3Q 2019 3Q 2018 %Var
           
Steel Segment          
Sales volume (thousands of MT)          
Flat products     682,257 694,124 (1.7)
Coated products     34,339 140,809 (75.6)
Structural shapes     16,134 46,398 (65.2)
Steel slabs     60 27 118.8
Total volume of shipments     732,789 881,359 (16.9)
           
Average sales price (US$ per MT)     706 888 (20.5)
           
Steel financial highlights (thousands of US$)          
Net sales     522,435 790,388 (33.9)
Cost of sales     529,324 653,626 (19.0)
Depreciation     38,051 39,561 (3.8)
Operating costs     28,536 21,372 33.5
Operating (loss) profit     (73,476) 75,829 (196.9)
           
EBITDA     (35,011) 103,329 (133.9)
Currency fluctuation     3,977 (6,728) 159.1
Adjusted EBITDA     (31,034) 96,601 (132.1)
           
           
Steam Coal Segment          
Sales volume (thousands of MT)     1,304 1,470 (11.3)
           
Average sales price (US$ per MT)     55 50 11.1
           
Steam coal financial highlights  (thousands of US$)          
Net sales     72,346 73,377 (1.4)
Cost of sales     79,270 80,388 (1.4)
Depreciation     8,155 8,705 (6.3)
Operating costs     763 2,546 (70.0)
Operating (loss) profit     (15,843) (18,263) 13.3
           
EBITDA     (7,003) (7,195) 2.7
Currency fluctuation     139 (1,869) 107.4
Adjusted EBITDA     (6,864) (9,064) 24.3

For the full version of this report, please visit: https://www.ahmsa.com/assets/files/infromacio...se_ENG.pdf

About AHMSA

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 2018, AHMSA held 13% share of the domestic steel market, 24% 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. 

Forward-looking statements:

The information set forth in this presentation contains “forward-looking statements” within the meaning of applicable Mexican securities legislation and the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements") including but not limited to projections of revenues or losses, plans and objectives for future operations, products or services, and statements relating to future economic performance. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause AHMSA’s actual results to differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include but are not limited to regional, national or global economic, business, market and regulatory conditions and the following: (i) AHMSA’s ability to service its debt, including the outstanding non-transferable rights of each recognized creditor in the suspension of payments proceeding to receive certain payments; (ii) competition and loss of market shares; (iii) changes in AHMSA’s relationships with customers and suppliers; (iv) increases in raw material costs or interruptions in supply; (v) declines in, and volatility affecting, global prices of steel; (vi) the existence or termination of free trade agreements, such as the North American Free Trade Agreement; (vii) foreign currency exchange fluctuations; (viii) the inherently dangerous nature of mining; (ix) work stoppages, strikes or other labor disputes; (x) changes in Mexican economic policy, as well as currency instability; (xi) inaccuracies in AHMSA’s estimates of economically recoverable coal reserves; and (xii) AHMSA’s dependence on certain raw materials.

The financial and operating projections, as well as estimates of assets, are based solely on the assumptions developed by AHMSA that it believes are reasonable based upon information available to AHMSA as of the date hereof. All projections and estimates are subject to material uncertainties, and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of AHMSA’s projections will depend upon unpredictable future events, many of which are beyond AHMSA’s control and, accordingly, no assurance can be given that AHMSA’s assumptions will prove true or that its projected results will be achieved.

Non-GAAP Financial Measures:

This presentation provides information regarding EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA are not recognized terms or measures of financial performance under U.S. GAAP or IFRS and do not purport to be and should not be considered as alternatives to net income, as determined on a consolidated basis in accordance with IFRS, as indicators of AHMSA's operating performance or as net resources generated by operating activities as a measure of AHMSA's liquidity. AHMSA includes EBITDA and Adjusted EBITDA because it believes that they enhance the understanding of AHMSA's financial performance and its ability to satisfy principal and interest obligations with respect to its indebtedness as well as to fund capital expenditures and working capital requirements.

Exchange Rate disclaimer

This document includes certain exchange rate conversions from Mexican Pesos to U.S. Dollars, only for convenience of the user.  The exchange rate used for the purposes of this translation is, for accounts related to the Income or Cash Flow statements, the average of the Official Exchange Rates published by Banco de Mexico each day during the months and the years ended, and the last day of each period for accounts related to the Balance Sheet.

IR Contacts: In Mexico Luis Guillermo Valdés Portales Director of Financial Planning Altos Hornos de México, S.A.B. de C.V. Tel:  52 (866) 649-3366 | plan_financiera@gan.com.mx In New York Maria Barona i-advize Corporate Communications, Inc. Tel: (212) 406-3691 mbarona@i-advize.com
Scroll down for more posts ▼

Top 10 Most Recent News Articles

China's Tech Success Echoes in Global Living Rooms

Updated Category News Views 3

A New Player in Global Tech If you've been sleeping on China's tech scene, it's time to wake up. Moonshot AI just launched Kimi K3, the largest open-source model by parameters we've seen, a significant leap in artificial intelligence that's catching even the eyes of folks who hardly touch technology—like retirees in Italy. Rapid AI Advancements China's story isn't about...

Continue Reading
Fast Guard Elevates Nationwide Fire Watch Mission

Updated Category News Views 2

Fast Guard: The Unseen Shield Behind Property Safety Hollywood, Florida might be best known for its sun-kissed beaches, but in the world of fire safety, it’s the nerve center for emergency fire watch response. Fast Guard Service isn’t just any run-of-the-mill security outfit; it’s rapidly becoming the unsung hero of property managers across the nation. When those...

Continue Reading
Chery Auto's Bold Green Tech Showcase at 2026 Summit

Updated Category News Views 2

Chery Auto Puts Eco Tech at Front and Center You know, Chery Auto isn't just manufacturing cars anymore—it's shaping an entire lifestyle. For the uninitiated, they’re calling in everyone worth knowing to their headquarters in Wuhu, China, come October 18 through 24. The 2026 Chery International User Summit is kind of a big deal this year with nearly 20 new green...

Continue Reading
Flying Car Regulatory Sandbox Begins in UAE

Updated Category News Views 3

Pioneering Flying Cars in the Desert In a move that seems right out of a science fiction screenplay, ARIDGE—the bigwig of flying cars from Asia—has taken a giant leap. They’ve cozied up with the UAE, locking arms to cook up the world's first regulatory sandbox for personal flying cars. Now, don’t laugh—sandbox isn't just for toddlers. It’s the playground where...

Continue Reading
Xi Jinping Thought: A Bold Prospect for Future Governance

Updated Category News Views 5

107 years in the game, and the Communist Party of China (CPC) isn't showing any signs of slowing. With their recent conference in Beijing focusing on Xi Jinping Thought on Party Building, it’s clear they’ve got their eyes on the future, not just resting on past laurels. This Xi Jinping Thought is about a thorough self-improvement plan for the Party, a clear strategy...

Continue Reading
Insta360 Expands with Times Square Flagship Store

Updated Category News Views 3

Insta360 Times Square Opening Marks Bold Expansion I dropped by Times Square today, and what do I see? Insta360 planting its flag right in the heart of New York City. Now, this isn't your run-of-the-mill grand opening—it’s the first flagship store outside of Asia, and it screams of big ambitions. Nestled at 1515 Broadway, the store is smack in the middle of one of the...

Continue Reading
Beta Bionics Lawsuit Deadline: Investors Face November 3 Cut-off

Updated Category News Views 4

Looming Deadline for Beta Bionics Investors Time's ticking fast for those holding onto Beta Bionics (BBNX) stock who might've been caught in a web of undisclosed risks and regulatory misses. Investors feeling the pinch from this fiasco have till November 3, 2026, to throw their hat in the ring as lead plaintiffs in the class action lawsuit out of California. The...

Continue Reading
Why Liver Nurture Taps into Health Sector Trends

Updated Category News Views 0

Liver Wellness: A Sector on the Rise Remember when everyone was all about heart health and cholesterol levels? Seems like these days, folks have shifted their focus a bit south—right to the liver. It's no surprise, really. With our modern diet and lifestyle choices squeezing the life out of this hard-working organ, people are on the hunt for ways to give it the TLC it...

Continue Reading
GAC's Cambodia Plant: A Strategic Manufacturing Shift

Updated Category News Views 3

Setting the Stage for New Industrial Growth On September 17, a milestone was etched in the sands of Cambodia when the GAC Cambodia KD Plant officially flipped the switch. This ain't just another factory throwing doors open; it's a fresh chapter in regional manufacturing power plays. We had some big hitters in attendance, like Cambodian Prime Minister Hun Manet, showing...

Continue Reading
Tragedy Highlights Need for E-bike Safety Overhaul

Updated Category News Views 2

A Dire Wake-Up Call in the East Village We're staring hard at a heartbreaking mess in the East Village. A 15-year-old girl lost her life while riding an electric Citi Bike, hit by an industrial truck. Let's not dance around it—this is a gut punch, the kind you never want to ever hear about, and one that comes with a bitter flavor of 'what if?' Age Verification: A...

Continue Reading

Top 5 Most Recently Viewed Articles

Texas Housing Market Update: Steady Growth and Availability

Updated Category News Views 164

Texas Housing Market Overview in 2024 Recent reports from Texas REALTORS highlight how home sales and their prices have remained relatively stable in 2024. The data reveals that while there were only modest changes from the previous year, the availability of homes has notably improved, providing buyers in many regions with a wealth of options to choose from. Sales and...

Continue Reading
EDWARD WEST's Significant Investment in Mitek Systems: An Insight

Updated Category News Views 123

EDWARD WEST's Strategic Investment in Mitek Systems EDWARD WEST, the Chief Executive Officer at Mitek Systems (NASDAQ: MITK), has recently made headlines with a notable insider purchase amounting to $506,407. This financial move marks a vote of confidence in the company’s future. Details of the Purchase In a recent filing with the SEC, it was disclosed that WEST...

Continue Reading
What to Expect from Valley Ntl Earnings This Quarter

Updated Category News Views 172

Valley Ntl's Upcoming Earnings Insight Valley Ntl (NASDAQ: VLY) is preparing to unveil its quarterly earnings report soon. Investors are keen to see how the company performs, especially with analysts projecting an earnings per share (EPS) of $0.26. This announcement is highly anticipated, and many are watching closely for any surprises that might influence the stock's...

Continue Reading
Adult Entertainment Sector Thrives with Digital Transition and Technology

Updated Category News Views 659

Growth of the Adult Entertainment Market The adult entertainment industry is undergoing a remarkable transformation, heavily influenced by changing societal attitudes and the proliferation of the internet. With an expanding online presence, the global market size was valued at approximately US$ 287.8 billion recently and is projected to grow at an impressive CAGR of 8.6%...

Continue Reading
Sigma Lithium's Sustainability Achievements and Operations Upgrade

Updated Category News Views 227

Sigma Lithium Achieves Recognition in Sustainability Initiatives Sigma Lithium Corporation, a prominent player in the global lithium market, has recently been highlighted for its remarkable sustainability practices. As an innovator dedicated to powering the future of electric vehicles, Sigma Lithium produces lithium concentrate that is both carbon neutral and...

Continue Reading