РJSC'ArcelorMittal Kryviy Rih'
РJSC "ArcelorMittal Kryvyi Rih"

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ArcelorMittal Kryviy Rih: overview of 2009.

Kyiv, March 16, 2009. OJSC “ArcelorMittal Kryviy Rih”, Ukraine’s largest steel plant, today announced its 2009 annual results.

Key Highlights:
• Shipments of 4,436 thousand tones compared to 5, 638 thousand tones in 2008
• Crude steel production: 5, 039 thousand tones compared to 6, 215 thousand tones in 2008
• Revenues reached 14,398 million UAH, down 35% on 2008
• Gross profit of 1,797 million UAH down 76% on 2008
• Net loss 120 million UAH compared to 4,676 million net profit in 2008
• CAPEX for the year fell to 782 million UAH; 1.7 billion UAH planned for 2010 focused on modernization and efficiency improvements
• Average capacity utilization 70% in 2009, significantly higher in H2 than H1

Commenting on the results, Mr. Jean Jouet, CEO of ArcelorMittal Kryviy Rih said:

“Despite the challenging economic conditions of 2009, the company has proved resilient and has been able to meet its commitments to various stakeholders, including its employees, investors, suppliers, and the Government.
The trend of the last quarter of 2009 was more positive and we began to see the first signs of a steady recovery of demand and production, which offer grounds for optimism moving into 2010. The outlook for the current year remains mixed with a stronger recovery in developing countries, lead by China, while we are seeking weaker growth in more developed economies.”

Production
Overall production was affected by the global economic crisis and lower demand.

Type of product 2008 (tones) 2009 (tones) 2009 compared to 2008, %
Ore mining 20 554 083 17 842 801 65.1
Coke 2 635 686 2 364 806 89.7
Concentrate 7 802 766 7 066 157 90.6
Agglomerate 9 652 298 7 943 504 82.3
Pig iron 5 634 554 4 419 455 78.4
Steel 6 213 288 5 039 268 81.1
Commercial rolled products 5 440 118 4 502 974 82.8


Exports
With the domestic market depressed, greater emphasis was placed on reaching export markets. In 2009, exports reached 83% of total sales. The company supplied 61 countries during the year, with the main markets remaining Africa, the Middle East, the Persian Gulf, CIS, EU, and Turkey.

Domestic Market
In 2009 OJSC “ArcelorMittal Kryviy Rih” sold 727 thousand tons of metal products on the domestic market, down 42% on 2008. Given the difficult economic climate, the company cut prices twice during the year – in April and in May – in order to maintain domestic demand.

VAT
In terms of cashflow, the most crucial issue of 2009 was a significant delay in the VAT refund. At year end 2009, OJSC “ArcelorMittal Kryviy Rih” was due 1,549 million UAH compared to 816 million UAH at the beginning of the year. Furthermore, the build-up of non-refunded VAT is continuing in 2010, adding around another 200 million UAH each month. Today, the state budget owes OJSC “ArcelorMittal Kryviy Rih” more than 3 billion UAH. Recovering the VAT that is owed is vital to the implementation of the 2010 CAPEX programme and therefore to the future of the company.

Health and Safety
In 2009 OJSC “ArcelorMittal Kryviy Rih” spent 138 025 500 UAH on safety measures. There were 53 incidents during the year (compared to 43 in 2008), of which 2 were fatal (compared to 2 in 2008). However, the total working days lost to injury was 2775, significantly fewer than the 3331 lost in 2008.

Social and Environmental responsibility
In 2009 the company paid 1.008 billion UAH to state and local budgets and met its commitments to the state social funds in full. It accounted for 40% of the tax revenues for the year of the city of Kryvyi Rih. OJSC “ArcelorMittal Kryviy Rih” has no arrears in terms of salary payments and in 2009 the company spent 176 million UAH on social projects such as rest homes and children’s summer camps.

Capital investment in environmental initiatives in 2009 reached 191,155 million UAH with the impact of production on the environment having been significantly reduced. Total emissions fell by 17.2% compared to 2008, basic waste output was reduced by 43.2%, and the volume of effluent discharge fell by 52.3%.

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