Steelmaker AHMSA reports increased quarterly profits

Monclova, Mexico-based steelmaker Altos Hornos de México (AHMSA) has reported nearly doubling its profits in the fourth quarter of 2017 compared to the previous year, despite a slight decrease in its sales volume.

The integrated steelmaker indicates it achieved adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $47 million in the fourth quarter of 2017, marking a 96 percent increase compared to the fourth quarter of 2016.

The company’s steel output volume in 2017’s fourth quarter of 2017, however, at 989,000 metric tons, represented a 1.6 percent decline from the same period in 2016. While the company’s steel segment earned profits during the 2017 fourth quarter, its coal segment lost $6 million.

For the year, AHMSA has reported adjusted EBITDA of $180 million, down 23 percent compared to 2016, with its steel segment’s profits declining by 13 percent and its coal segment recording an overall loss of $11 million.

The company also has announced that during the second quarter of 2018 it expects to launch its new vacuum degassing system as part of a strategy to migrate toward “higher value-added products.” Another project to be installed by mid-2018 has been designed to “enhance recovery of our iron mineral reserves and restore historical iron ore concentrate production.”

“Despite difficulties with our raw material supplies, we are very pleased with our operating results for the year,” remarks Alonso Ancira Elizondo, executive board chairman of the integrated steelmaker.

“We faced significant impacts at our mines due to hundred-year flood events,” he adds regarding the 2017 results.

Continues Ancira Elizondo, “The renegotiation of the North American Free Trade Agreement (NAFTA) is, without a doubt, a matter that concerns us and from which we expect a favorable result, mainly as it pertains to strengthening control over rules of origin and improving regional content.”

He adds, “Moreover, we expect a resolution from the United States government with regards to new tariffs and/or quotas on steel imports sold into the NAFTA region at artificially low prices. We are confident that a favorable resolution on this matter will help restore stability to the regional steel market.”

Mexico also has enacted tariffs of its own, with the board chairman saying, “More broadly, and with respect to trade, for a third consecutive six-month period Mexico recently extended a 15% tariff on steel imports from nations that do not have free trade agreements with our country. This measure, which we expect will remain in place in the long-term, offers added stability for the country’s steel industry.”