| Why ArcelorMittal’s Leverage Ratios Came Down In 4Q | |
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ArcelorMittal Could Turn Around But Faces Stiff Headwinds In 2015 (Part 12 of 14) (Continued from Part 11) ArcelorMittal’s leverage ratios
Previously in this series, we saw that ArcelorMittal’s net debt came down in 2014. In this part, we’ll explore the reasons for the reduction. Higher leverage ratios are one reason behind the lower valuation of ArcelorMittal. Its market capitalization is $20 billion. In contrast, Nucor (NUE) has a market capitalization of $15.3 billion. Nucor’s revenues are only about one-quarter of ArcelorMittal’s.
Reduction in working capital
The chart above analyzes ArcelorMittal’s net debt. Its cash flows had a positive impact of $1.2 billion on its net debt. ArcelorMittal reduced its working capital in 4Q. This increased its operating cash flows. ArcelorMittal’s capital expenditure also came down in 2014. It expects its capital expenditure to be lower in 2015 as well. Currently, ArcelorMittal isn’t looking at any new growth capex.
Asset sales
ArcelorMittal realized $575 million from asset sales. Most of this money came from the divestiture of Gallatin Steel. Gallatin was a 50-50 joint venture between ArcelorMittal (MT), which is based in Luxembourg, and Gerdau (GGB) of Brazil. Nucor acquired this plant for a consideration of $700 million. This acquisition strengthens Nucor’s presence in the Midwest region.
ArcelorMittal has emphasized that it will look at selling non-core assets to focus more on its core operations. ArcelorMittal’s stock has been under pressure on Wall Street. It has underperformed other steel companies over the past few years.
You can also access the steel industry with the SPDR S&P Metals and Mining ETF (XME). U.S. Steel (X) currently forms 2.83% of XME.
So far, we’ve analyzed ArcelorMittal’s 2014 earnings. In the next part of this series, we’ll see how it’s placed in 2015.
Continue to Part 13 Browse this series on Market Realist:
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United States Steel Corporation
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CODE : X |
ISIN : US9129091081 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
United States Steel est une société de production minière de fer et de étain basée aux Etats-Unis D'Amerique. United States Steel est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 6,4 milliards US$ (5,7 milliards €). La valeur de son action a atteint son plus bas niveau récent le 28 mars 2003 à 10,01 US$, et son plus haut niveau récent le 30 novembre 2007 à 98,85 US$. United States Steel possède 176 184 431 actions en circulation. |