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(AOF) – Aperam achieved a net profit of 80 million euros in the second quarter, compared with 76 million euros a year earlier. The EBITDA of the specialist in stainless steel, it, pbaded from 154 to 150 million euros. At the same time, turnover increased by 5.8% to 1.218 billion euros. Steel shipments for the second quarter of 2018 increased to 508 thousand tons, compared to 478 thousand tons in the second quarter of 2017.
Regarding its outlook, Ebitda is expected to decline in Q3 2018 due to the usual seasonal slowdown in Europe and net financial debt remains at a low level. The stainless steel specialist had a net financial debt of 20 million euros as of June 30, 2018.
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Strengths of value
– Pure player in the stainless steel sector from the ArcelorMittal group, sixth in the world with 6% of the market, number 2 in Europe and number 1 in Latin America;
– Production capacities concentrated on six sites in Belgium, Brazil and France;
– Group organized into 3 divisions: electrical and stainless steel, services and solutions then alloys and special steels;
– Diverse customers: consumer goods industry for 29%, oil & gas for 21%, equipment for 13%, marine for 13%, automotive and transportation for 11%, aerospace & defense for 10%,
– EU enforcement of anti-dumping measures against Chinese steel and Taiwanese;
– "TopLine" strategy of value creation by concentration of commercial projects on the most profitable segments and by investments in innovation;
– Return to profitability since 2014 (the best in the global sector) and strong self-financing capacity thanks to the restructuring carried out before the onset of the global steel crisis;
– Strategic acquisition of the German VDM, accretive on profit from the first year and bringing the group to the rank of number 1 in Europe;
– Decrease in debt, raised in the investment category by Moody's and Standard & Poor's;
– Shareholder-friendly distribution policy – high dividend with a distribution rate of between 50 and 100% and stock repurchase programs
Weaknesses in value
– Highly competitive global market and sensitivity to the European economy;
– In the Alloys Division, Negative Impact of Declining Nickel Price, Distributed on Sales Prices and Rumors of Indonesia's Renewal of Exports;
– Price Pressures in Stainless Steel and in ferrochrome;
– Increase in competition from South Korea and India;
– Non-eligibility for SRD.
How to monitor the value [19659002] – Value of both reversal and yield, the dividend being distributed quarterly;
– Sensitivity to nickel and dollar prices (accounting currency) and strong seasonality of activity, more important in the 3rd quarter;
– Progression of the "Leadership Journey" savings plan: savings costs of $ 575 million at the end of 2017, development of Brazilian activities, growth of the alloys division and possible acquisitions;
– recurring rumors of a merger with Outokumpu or Acerinox;
– a 40.83% owned by the Mittal family trust, and 2.5% by the Luxembourg State.
Basic Products – Metals
Some industrials no longer hesitate to deal directly with mining groups, because of the surge in prices and the risk of shortages, to secure their supplies. This is the case of Apple, which is discussing with mining groups in order to conclude long-term cobalt supply contracts. Earlier this year, on the London Metal Exchange, the price of a tonne of cobalt jumped to $ 82,000, its highest level since 2010 as badysts predict a growth in demand for electric vehicles with batteries. Today almost a quarter of the world's cobalt production is used in smartphone production. German automaker BMW is also looking for its own 10-year cobalt supply contract for its electric car program. Just like Volkswagen or Samsung.
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