OREANDA-NEWS. August 7, 2012. PJSC “ArcelorMittal Kryviy Rih”, Ukraine’s largest steel plant, announced its 2011 annual results.

Key Highlights:

• Shipments: 4.9 million tons compared to 5.4 million tons in 2010.

• Steel production: 5 702 600 tons compared to 6 133 700 tons in 2010.

• Revenues reached 28.9 billion UAH, by 23% more than in 2010.

• Gross profit amounted to 6.4 billion UAH, by 43% more than in 2010.

• Net profit amounted to 2.1 billion UAH compared to 1.2 billion UAH of net profit in 2010.

• CAPEX increased to 2012.7 million UAH in 2011.

Production

Type of product

2010 (mln tons)

2011 (mln tons)

2011 compared to 2010, %

Ore mining

23,1

24,4

105,5

Coke (6% humidity)

2,7

2,6

97,7

Concentrate

8,9

9,6

107,7

Agglomerate

9,5

9,0

94,7

Pig iron

5,3

4,9

92,0

Steel

6,1

5,7

93,0

Commercial rolled products

5,4

4,9

91,3

In 2011 exports reached 83% of total sales (compared to 85% in 2010). In 2011 PJSC “ArcelorMittal Kryvyi Rih” supplied 59 countries worldwide (60 countries in 2010), with the main markets remaining Africa, the Middle East, Turkey and CIS. Sales of the main steel production increased by 4.2% compared with 2010 at the domestic market. In 2011 the company delivered its production to all regions of Ukraine.

MODERNIZATION

In 2011 PJSC “ArcelorMittal Kryvyi Rih” has continued its modernization and transformation program to build the modern and dynamic enterprise. Major investment projects of the enterprise aimed at environmental protection activities and production development. In 2011 the amount of capital investments in implementation of the program for modernization of PJSC “ArcelorMittal Kryvyi Rih” amounted to USD 252 million compared with USD 219 million in 2010.

The most significant modernization projects are as followed: construction of CC-machine and ladle furnace that is one of the investment obligations of the plant in accordance with SPA. The cost of the project is over USD 100 million. This moment the object is driven up to the rated capacity.

In addition, the modernization program of 2011included:

• Reconstruction of tailings dam “Chetvertaya karta” to the mark of 151.0 m and mark 156.0 m;

• Reconstruction of tailing facilities and recycling water supply in an area of “Myrolyubivka” with increasing of flood-breaking dams to the mark of 140.0 m;

• Gas cleaning of the converter shop;

• Installation of packaging line and shapes gagger at light-section mill 250-2;

• Capital repair of the 1st class of the blast-furnace No.6;

• Construction of new horizon – 1135 m at the Artyom mine;

• Construction of a transformer plant;

• Purchasing of four grinding mills for mining and beneficiation complexes, as well as a number of other projects.

ENTERPRISE INFLUENCE ON COUNTRY AND REGION ECONOMY

In 2011 PJSC “ArcelorMittal Kryviy Rih” has increased payments to the budget and extra-budgetary funds by 1.5 times compared to 2010. In 2011 the enterprise paid over USD 4.5 billion UAH of taxes and fees to the budget and to the state trust funds (including payments to the budget during the import at customs), that is almost by 1.6 billion UAH exceeds the total amount of taxes and mandatory deductions paid in the year-earlier period. The most significant thing (by over 1.4 billion UAH or almost in 4 times) was the growth of tax payments to the state budget.

Payments of the enterprise to the budget and non-budgetary fund in 2010-2011 (UAH mln)

Payments

2011

(mln UAH)

2010(mln UAH)

2011compared to  2010, %

Total

4 533

2 939

+54,4

Including:

 

 

 

State budget

1 927

502

+383,8

Local budgets

502

447

+12,3

Payments to the budget during the import at customs

1 297

1 164

+11,4

State trust funds

807

826

-2,4

As of December 31, 2011 the total debt owed to the enterprise for VAT refund and for prepaid income tax amounted to UAH 4 228 million (by 21,5% more compared to December 31, 2010 when this sum amounted UAH 3 479 million).

Debt for VAT refund and prepaid income tax, UAH mln

December 31, 2011

Receivables for VAT,

total by balance:

2 089

Prepaid income tax

2 139

Total debt (VAT and income tax)

4 228

Management of PJSC “ArcelorMittal Kryvyi Rih” continues the dialogue with the government of Ukraine searching for possible variants of debt refund with a hope that a solution will be found soon.

HEALTH AND SAFETY

Health and Safety and creation of the self working conditions for the employees are the main priorities at PJSC “ArcelorMittal Kryvyi Rih” as well as at ArcelorMittal as a whole. In 2011 PJSC “ArcelorMittal Kryvyi Rih” spent over 187 mln UAH on activities for H&S. 36 accidents (compared to 48 in 2010) of which 1 fatality (compared to 3 in 2010) took place in 2011.

Investments in Health&Safety 2010-2011

Period

Plan, mln UAH

Fact, mln UAH

% from the sum of production sold in the previous year

A sum per an employee in industrial area, thousand UAH

2011

140,9

187,2

0,79

5 815

2010

86,4

120,3

0,84

3,412

In 2011 among H&S major projects of PJSC “ArcelorMittal Kryvyi Rih” aimed to improve the employees’ working conditions:

• Installation of the industrial air conditioners and warm-air heaters (1.8 million UAH) controlling the temperature at 90 workplaces at the subdivisions of the enterprise;

• Purchasing of a fixed control station of single blast in the open-mine pits of the mining department, providing more comfortable working conditions for personnel (866 thou UAH);

• Purchasing of multi-function hydraulic jack installation to create safe working conditions of employees of the railway plant No.4 upon the liquidation of the consequences of the rolling stock coming-off (934 thousand UAH);

• Construction completion of the first stage of the mechanized packing line of finished steel at the section rolling shop No.1 (66.7 mln UAH), the manual labor of employees will be eliminated while products packaging.

One more important trend of PJSC “ArcelorMittal Kryvyi Rih” H&S is cooperation with contractors aimed to prevent the occupational injuries among contractors. The enterprise implemented the procedure for assessing the compliance potential contractors with H&S norms, which determines the level of compliance with occupational safety in the organization at the stage of the tender. In 2011 PJSC “ArcelorMittal Kryvyi Rih” has reached a zero rate of fatalities with contractors.

INVESTMENTS IN CAPITAL RENEWALS AND REPAIRS

 

2010 (mln UAH)

2011

(mln UAH)

2011 compared to 2010, %

Total

3 304,2

3 865,6

+17,0

including

 

 

 

Capital investments in creation and updating of fixed assets

1 738,1

2 012,7

+15,8

Expenses for repairs and maintenance

1 566,1

1 852,9

+18,3

ENVIRONMENT

In 2011 PJSC “ArcelorMittal Kryvyi Rih” investments in environmental protection activities amounted to 359.6 million UAH compared with 401.7 million UAH in 2010.

Figures of environmental protection of the company didn’t exceed the established standards for 2011 and compared with 2010:

• Emissions of air pollutants was reduced by 10.56%;

• The volume of wastewater was reduced by 27.4%;

• The volume of waste disposal in the environment was increased by 12.2%.

In 2011 in order to reduce the negative impact of industrial activities on the environment PJSC “ArcelorMittal Kryvyi Rih” has implemented a number of environmental projects, among which are as followed:

• Construction of gas treatment units at the converter shop. In 2011 the capital investments in this project amounted to 5.818 mln UAH. Due to the gas treatment units in the context of actual hours worked in 2011 the converter shop of PJSC “ArcelorMittal Kryvyi Rih” reduced dust emissions into the air by 24.245 t. Putting the new treatment technology into commission meets the modern requirements and provides the concentration of dust emissions by up to 20 mg/m3 in the state norm - 50 mg/m3.

• Integration into a single collector system of pipelines of air taps of tanks and vessels at the recovery plant. At the shop 11 sources of emissions of specific substances into the atmosphere had been eliminated because of this project, and emissions reduced by 1.97 t for actual work in 2011. Investments in this project amounted to 3.8 mln UAH in 2011.

• Reconstruction of tailing facilities and reverse water supply. In 2011 investments amounted to 108.2 mln UAH.

SOCIAL SPHERE

The main directions of development of PJSC “ArcelorMittal Kryvyi Rih” personnel are reflected in the Collective agreement and the program of activities on improvement of social and living conditions of employees. Financing is provided in accordance with the business plan of social expenditures and material benefits as well as according to the program of activities on improvement of social and living conditions of employees. In 2011 175 million UAH was spent on social expenditures and material benefits compared with 190 mln in 2010.

0.5 % of the funds from sold products for the previous year are allocated to implement the program of activities on improvement of social and living conditions of employees. It provides the projects in such directions as: capital and operating repairs, technical re-equipping facilities of social purpose, facilities of rest, treatment and health improvement of enterprise employees. In 2011 within the framework of these activities 118 mln UAH was spent compared to 99 mln UAH in 2010.

Staff

Actual numbers of staff amounted to 33 890 employees as of 1.01.2012. PJSC “ArcelorMittal Kryvyi Rih” is among the leaders in terms of average wages at the metallurgical plants of Ukraine. Average monthly wage per employee (excluding payments for system of voluntary dismissal) in 2011 amounted to 4 555.1 UAH, that is by 15. 4% higher than in 2010 (3 947.7 UAH).

Medical care

PJSC “ArcelorMittal Kryvyi Rih” spent over 97 mln UAH on rehabilitation and recreation of employees and their families in 2011. The company invested this amount in the development and maintenance of its social infrastructure – 3 children's health-improving camps, sanatorium “Dzherelo”, as well as for the purchase of health-treatment vouchers to sanatoriums of Ukraine for the staff.

More than 5 000 children of employees have improved their health at the children's summer camps, and 6 240 employees of PJSC “ArcelorMittal Kryvyi Rih” and their family members took the opportunity to have rest at health complexes in 2011

Housing construction

Construction of housing for employees is one of the main investment commitments in the social sphere, which PJSC “ArcelorMittal Kryvyi Rih” fulfilled in full in 2011. In December 2011, two houses for 285 apartments were put in commission. They were transferred to the employees free of charge. PJSC “ArcelorMittal Kryvyi Rih” invested 63 million UAH in the construction of two modern nine-storey houses. PJSC “ArcelorMittal Kryvyi Rih” housing program for 2008-2011 was implemented in full.