MIRA INFORM REPORT

 

 

Report No. :

321914

Report Date :

21.05.2015

 

IDENTIFICATION DETAILS

 

Name :

ARCELORMITTAL GALATI SA

 

 

Registered Office :

Galati County / 800698 Galati – Smardan Street No. 1

 

 

Country :

Romania

 

 

Financials (as on) :

30.06.2014

 

 

Year of Incorporation :

1991

 

 

Legal Form :

Joint Stock Company

 

 

Line of Business :

Production of ferrous metals in primary forms and of ferro-alloys

 

 

No. of Employees :

6,876 (30.06.2014)

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

Litigation :

Clear

 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Romania

B1

B1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

 

 

 

ROMANIA - ECONOMIC OVERVIEW

 

Romania, which joined the EU on 1 January 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment. In the aftermath of the global financial crisis, Romania signed on to a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary stand-by agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on precautionary two-year stand-by agreement, worth $5.4 billion, to continue with reforms, although Bucharest has announced that it does not intend to draw funds under the agreement. Economic growth rebounded in 2013, driven by strong industrial exports and an excellent agricultural harvest, and the current account deficit was reduced substantially. The economy closed out 2014 with 2.8% growth, down from the 3.5% posted in 2013. Industry outperformed other sectors of the economy. Exports remained the engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. In 2014, the Government of Romania succeeded in meeting its annual target for the budget deficit, the external deficit remained low, and inflation was the lowest since 1989, allowing a gradual loosening of the monetary policy throughout the year. However, progress on structural reforms has been uneven and the economy still is vulnerable to external shocks. An ageing population, weak domestic demand, tax evasion, and insufficient health-care represent top vulnerabilities.

 

 

Source : CIA

Company name and address

 

 

NAME OF THE COMPANY    

ARCELORMITTAL GALATI SA

Address      

Galati county / 800698 Galati – Smardan Street No. 1

 

 

Phone no.

0040-236-801331

0040-372-811331, 814012, 814004, 813200, 811149, 811062, 814242

 

0040-728-993132

0040-733-180988

Fax no.  

0040-236-803883

 

 

 

 

Web-site

www.galati.arcelormittal.com

www.arcelormittal.com  

E-mail address

dorian.dumitrescu@arcelormittal.com

 

 

HISTORIC/OFFICIAL DATA

 

Date of foundation / Short history

1968, as a State owned enterprise named "Combinatul Siderurgic Galati".

According to a Governmental Decision, beginning with 18th of February, 1991, subject became a joint stock company, State owned capital named SIDEX SA.

Later on, in 2001, after the taking over, its new name became ISPAT SIDEX SA.

After the merging of LNM Holdings and ISPAT International in October, 2004 (resulting MITTAL STEEL Company), the name was changed into MITTAL STEEL GALATI SA.

Due to the ARCELOR and MITTAL STEEL merging, since 16.08.2007, the name of the company becomes ARCELOR MITTAL GALATI SA.

2009,  ArcelorMittal Galati became the center of Flat Carbon Europe – South Eastern Division

2014, ArcelorMittal Galati and ArcelorMittal Skopje are now a new Europe South East business division

 

Present legal form

joint stock company, joint venture of private Romanian and foreign capital

Registered with the Trade Registry 

J17/21/1991

VAT no. 

1639739

Registered capital    

2,455,523,235 RON

Shareholders

 

Individuals

1. List of individuals, not detailed with the National Trade Registry

Participation                 

 0.294%

 

Legal persons

2. ARCELORMITTAL  HOLDINGS AG – Swiss legal person

Address: Switzerland / Zug – 15 Alpenstrasse

Participation

 

99.7017%

3. List of other legal person, not detailed with the National Trade Registry

Participation

 

0.0043%

 

Obligation to publish

According to the Romanian Financial Legislation, subject company is obliged to lodge with the Ministry of  Public Finance its half-yearly accounts



EMPLOYEES

 

EMPLOYEES              

2009

2010

2011

2012

2013

30.06.2014

Total*

 

11,049

9,239

8,199

7,936

7,115

6,876

* the continuous reducing of the number of employees is a measure for increasing the productivity (said the General Manager Mr. Bruno Ribo) and it follows the automation extension process and the applying of the voluntary (pre)retirement scheme and applying voluntary redundancy schemes.

The process of the reducing of personnel is continuing.

 

 

 

BUSINESS ACTIVITY

 

- Production of ferrous metals in primary forms and of ferro-alloys, according to the National Trade Registry updated files (NACE: 2410)

 

ArcelorMittal is the world’s leading steel and mining company. It is the leading supplier of quality steel products in all major markets including automotive, construction, household appliances and packaging.

ArcelorMittal is present in 60 countries and has an industrial footprint in 19 countries.

It is one of the world’s five largest producers of iron ore and metallurgical coal and its mining business is an essential part of its growth strategy. With a geographically diversified portfolio of iron ore and coal assets, it is strategically positioned to serve its network of steel plants and the external global market.

In 2013, ArcelorMittal had revenues of $79.4 billion and steel production of 91.2 million tons. Production of iron ore group was 58.4 million tons.

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).

 

In Romania, ArcelorMittal Galati became the center of Flat Carbon Europe – South Eastern Division.

 

ArcelorMittal Galati is the largest integrated steel plant in the country and leader in manufacturing metallurgical products. Built in the 1960s, Mittal Steel Galati has a production capacity of 3 million tons of steel. Galati, known as the ‘steelmakers’ city’ is situated on the banks of the River Danube. The company has 6 operating facilities in Romania, which include Galati, Tulcea – a lime quarry, Iasi, Roman, Hunedoara and Romportmet –a captive port on the Danube.

It produces high-quality plate, hot and cold rolled sheet, galvanized sheet, large diameter longitudinally welded pipes and blooms as billets

 

According to www.business24.ro / 25.09.2014

ArcelorMittal Galati steel plant, controlled by ArcelorMittal, targeting increased production by 15% in 2015 to over 2 million tons, following some refurbishments worth 10 million euros, and of the "reconstruction" of environmental competitiveness business.

The investments are in line with Europe ArcelorMittal's strategy, where the plant in Galati has a key role, according to a company release.

ArcelorMittal estimated for 2014 1.6 million tons production and for 2015 production level will exceed 2 million tons.

"This estimate is only possible due to measures taken by authorities in recent months to restore the competitiveness of the business environment in Romania, especially regarding the restoration of rational prices for gas and electricity. These measures should not be temporary and should be maintained long term at the same level" reads the release.

 

Work-shops, according to the National Trade Registry updated files

1. Constanta county / Constanta – Incinta Port Constanta

2. Galati county / Galati – Siret Street No. 1

3. Galati county / Galati – Calea Prutului Street

4. Bucharest, sector 2 – Dinu Vintila Street No. 11

5. Galati county / Galati – Cartier Tiglina, “REg. 11 Siret” Street

6. Galati county / Galati – Closca Street

7. Galati county / Galati – Anghel Saligny Street No. 21

For more details, please visit  www.corporate.arcelormittal.com & galati.arcelormittal.com

 

 

OTHER PARTICIPATION

 

1. Company’s participation

 

1. SIDEX MONOLITHIQUES SRL – J17/534/1997, VAT 9619079

2. ARCELORMITTAL SHARED SERVICES CENTER EUROPE ROMANIA SRL –

                                                                                                             J17/18/1994, VAT 5097401

3. MIN-EST S.A – J36/46/1999, VAT 7842022

 

2. Shareholders other participation

 

ARCELORMITTAL  HOLDINGS AG

ARCELORMITTAL HUNEDOARA SA – J20/41/1991,

                                                                       VAT 2126855

ROMPORTMET SA – J17/103/1991, VAT 1643705

List of individuals

not applicable

 

List of other legal person

not applicable

 

 

REAL ESTATE 

 

- lands & buildings       

2009

2010

2011

2012

2013

1,410,462,514

1,289,040,200

1,162,758,691

1,068,347,336

826,494,472

TANGIBLES*

 

1,758,359,755 RON, at 30.06.2014

 

*According to the accounting standards, for the middle of the year the company is not obliged to detail its tangible assets. Therefore, the real estates are included in “Tangibles” position among the other assets

 

 

BANKS

 

Romanian Commercial Bank, Transilvania Bank

 

 

MANAGEMENT

 

as officially registered with the National Trade Registry

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

other executives, according to the company’s web-site

 

 

Board of administration

 

President

Sanjay Samaddar – Indian citizen, born on 13.10.1961

Appointed on 18.07.2012; Expiration date of mandate: 18.07.2016

 

Member

Carl Jacques Marie Gentil De Mare – Belgian citizen, born on 28.03.1962

Appointed on 26.10.2009; Expiration date of mandate: 25.10.2017

 

Member

Thierry Alain Francois Le Gall – French citizen (date of birth is N/A)

Appointed on 25.09.2008; Expiration date of mandate: 30.10.2016

 

Member

Evans Simion Francis – British citizen, born on 10.10.1963

Appointed on 26.10.2009; Expiration date of mandate: 25.10.2017

 

Member

Ghosh Surojit Kumar – Indian citizen, born on 25.12.1957

Appointed on 25.10.2013; Expiration date of mandate: 25.10.2017

 

Executives

Unique General Manager

Mr. Ribo Bruno Rene Paul – French citizen, born on 28.06.1963

Appointed on 08.02.2012; Expiration date of mandate: 06.02.2016

 

 

CFO                                            Mr. Arun Annachatre

Head of Support Services           Mrs. Tatiana Balta

Country Manager                        Mr. Ionel Bors

 

CURRENCY

 

Exchange rate of EURO 

 

 

1 EURO = 4.2282 RON on 31.12.2009    

1 EURO = 4.2848 RON on 31.12.2010

1 EURO = 4.3197 RON on 31.12.2011

1 EURO = 4.4287 RON on 31.12.2012

1 EURO = 4.4847 RON on 31.12.2013

1 EURO = 4.3888 RON on 30.06.2014

 

 

FINANCIAL DATA

 

BALANCE SHEET

31.12.2011

31.12.2012

31.12.2013

30.06.2014

 

 

 

 

 

INTANGIBLES - TOTAL

10,752,397

6,748,140

7,849,663

7,161,816

TANGIBLES - TOTAL

2,579,338,902

2,270,241,065

1,846,036,160

1,758,359,755

FINANCIALS - TOTAL

20,776,932

23,115,029

10,952,633

10,690,326

FIXED ASSETS - TOTAL

2,610,868,231

2,300,104,234

1,864,838,456

1,776,211,897

STOCKS - TOTAL

1,540,414,271

1,020,249,253

1,158,417,198

918,531,937

CLAIMS - TOTAL

750,314,230

419,376,250

407,858,377

398,968,557

CURRENT ASSETS

2,295,033,038

1,955,234,748

1,720,027,346

1,322,610,089

PREPAID EXPENSES

9,307,371

8,387,990

7,625,095

5,967,817

DEBTS WITHIN 1 YEAR

1,138,258,285

716,865,018

1,274,860,658

1,151,345,833

DEBTS OVER 1 YEAR

405,295,871

399,027,705

888,401,223

783,499,394

PROVISIONS

162,582,057

166,417,280

145,273,550

118,000,542

ADVANCED INCOMES

41,490,214

28,292,283

24,433,088

13,129,693

REGISTERED CAPITAL

2,455,523,235

2,455,523,235

2,455,523,235

2,455,523,235

RESERVES from reassessment of the fixed assets

611,003,349

523,874,422

335,599,498

294,747,139

RESERVES

1,627,380,433

1,731,118,596

1,855,852,246

1,893,373,842

LOSSES CARRIED FORWARD

906,194,469

1,526,324,804

1,757,391,568

2,490,654,717

NET RESULT - PROFIT

0

0

0

0

NET RESULT - LOSS

620,130,335

231,066,763

741,659,810

330,675,764

NET WORTH

3,167,582,213

2,953,124,686

2,147,923,601

1,822,313,735

BALANCE SHEET

31.12.2011

31.12.2012

31.12.2013

30.06.2014

 

 

 

 

 

INTANGIBLES - TOTAL

10,752,397

6,748,140

7,849,663

7,161,816

TANGIBLES - TOTAL

2,579,338,902

2,270,241,065

1,846,036,160

1,758,359,755

FINANCIALS - TOTAL

20,776,932

23,115,029

10,952,633

10,690,326

FIXED ASSETS - TOTAL

2,610,868,231

2,300,104,234

1,864,838,456

1,776,211,897

STOCKS - TOTAL

1,540,414,271

1,020,249,253

1,158,417,198

918,531,937

CLAIMS - TOTAL

750,314,230

419,376,250

407,858,377

398,968,557

CURRENT ASSETS

2,295,033,038

1,955,234,748

1,720,027,346

1,322,610,089

PREPAID EXPENSES

9,307,371

8,387,990

7,625,095

5,967,817

DEBTS WITHIN 1 YEAR

1,138,258,285

716,865,018

1,274,860,658

1,151,345,833

DEBTS OVER 1 YEAR

405,295,871

399,027,705

888,401,223

783,499,394

PROVISIONS

162,582,057

166,417,280

145,273,550

118,000,542

ADVANCED INCOMES

41,490,214

28,292,283

24,433,088

13,129,693

REGISTERED CAPITAL

2,455,523,235

2,455,523,235

2,455,523,235

2,455,523,235

RESERVES from reassessment of the fixed assets

611,003,349

523,874,422

335,599,498

294,747,139

RESERVES

1,627,380,433

1,731,118,596

1,855,852,246

1,893,373,842

LOSSES CARRIED FORWARD

906,194,469

1,526,324,804

1,757,391,568

2,490,654,717

NET RESULT - PROFIT

0

0

0

0

NET RESULT - LOSS

620,130,335

231,066,763

741,659,810

330,675,764

NET WORTH

3,167,582,213

2,953,124,686

2,147,923,601

1,822,313,735

 

 

 

 

 

 

 

 

 

 

PROFIT & LOSS ACCOUNT

31.12.2011

31.12.2012

31.12.2013

30.06.2014

 

 

 

 

 

Turnover

4,663,330,401

5,418,682,167

3,713,378,235

1,681,422,831

Own production & services

4,639,424,127

5,400,707,200

N/A

N/A

Sales

23,906,274

17,974,967

N/A

N/A

INCOMES FROM ORDINARY OPERATING ACTIVITY

4,928,126,452

5,175,683,536

3,767,099,055

1,551,482,683

Raw materials

3,322,190,923

2,771,373,729

N/A

N/A

Costs of goods sold

24,804,502

20,744,360

N/A

N/A

Wages

398,166,738

358,909,637

N/A

N/A

Depreciations & provisions

292,831,211

341,054,036

N/A

N/A

Other operating costs

644,233,471

582,231,322

N/A

N/A

COSTS OF ORDINARY OPERATING ACTIVITY

5,494,710,775

5,287,799,297

4,450,224,642

1,872,129,199

ORDINARY OPERATING RESULT - PROFIT

0

0

0

0

ORDINARY OPERATING RESULT - LOSS

566,584,323

112,115,761

683,125,587

320,646,516

FINANCIAL INCOMES

160,452,868

135,768,710

121,569,745

48,550,868

FINANCIAL COSTS

213,998,880

254,719,712

180,103,968

58,580,116

FINANCIAL RESULT - PROFIT

0

0

0

0

FINANCIAL RESULT - LOSS

53,546,012

118,951,002

58,534,223

10,029,248

CURRENT RESULT - PROFIT

0

0

0

0

CURRENT RESULT - LOSS

620,130,335

231,066,763

741,659,810

330,675,764

Extraordinary incomes

0

0

0

0

Extraordinary costs

0

0

0

0

EXTRAORDINARY RESULT - PROFIT

0

0

0

0

EXTRAORDINARY RESULT - LOSS

0

0

0

0

TOTAL INCOMES

5,088,579,320

5,311,452,246

3,888,668,800

1,600,033,551

TOTAL COSTS

5,708,709,655

5,542,519,009

4,630,328,610

1,930,709,315

PRETAX RESULT - PROFIT

0

0

0

0

PRETAX RESULT - LOSS

620,130,335

231,066,763

741,659,810

330,675,764

TAX ON PROFIT

0

0

0

0

NET RESULT - PROFIT

0

0

0

0

NET RESULT - LOSS

620,130,335

231,066,763

741,659,810

330,675,764

 

N.B.: any difference occurred between former reports and the present one regarding some positions of the “Balance Sheet” or P/L Account for previous periods does not belong to us.

The financial data from this report are the ones officially declared by the subject with the Ministry of Public Finance data basis for 30.06.2014. As consequence, the responsibility for their accuracy belongs exclusively to the company.

 

OUR OPINION

 

based upon financial figures reported in the latest balance-sheet – 30.06.2014

- all figures are reported in RON  if  otherwise not specified.

 

 

Size

 

large, considering the number of employees

 

the continuous reducing of the number of employees is a measure for increasing the productivity (said the General Manager Mr. Bruno Ribo) and it follows the automation extension process and the applying of the voluntary (pre)retirement scheme and applying voluntary redundancy schemes.

The process of the reducing of personnel is continuing.

 

Position & trend

ARCELORMITTAL GALATI SA is one of the largest and the most powerful Romanian companies, well known in Romania and abroad, well established and having a serious background. 

The figures at hand reveal an impressive volume of activity, despite the certain fluctuations registered.

Yet, the returns stand negative since 2009 and the losses are coming quite from the operating activity. On the other hand, the B/S accounts indicate a satisfactory liquidity and solvability.

Nevertheless, this is a huge business, with a strong affiliation and we do appreciate the business relationships are feasible.

Regarding the credit based transactions, considering all the positive aspect above named, but also the negative returns lasting for more than 5 years and the fluctuant evolution of this specific market in the world and in Romania (given especially by the price of the iron ore – the main raw material, but of the costs of electricity & of the gas, both of them extremely important in this line of business) we appreciate any credit amount should remain at the supplier disposal.

 

 

CREDITS & LOANS (ACTIVE BALANCE)

 

N/A

 

 

BALANCE CLAIMS-DEBTS

 

BALANCE CLAIMS-DEBTS

negative

Total claims; no further details are available

 

398,968,557

Total debts

1,151,345,833

- Short term; no further details are available

783,499,394

- Medium term; no further details are available

367,846,439

 

 

PAYMENTS BEHAVIOR

 

 

with delays

 

Total overdue of           3.03% of turnover (22.92% of total short term debt)

102,558,713

To suppliers, 25.29% delayed

102,558,713

over 30 days

20,465,251

 

over 90 days

21,692,924

 

over 1 year

60,400,538

 

 

 

PAYMENTS INCIDENTS, as

officially recorded with the Payment Incident Bureau

No payments incidents recorded in the period 18.05.2014 – 18.05.2015

 

BLACKLISTING (international sanctions)

Not applicable

 

 

 

2009

2010

2011

 2012

2013

30.06.2014

 

Depreciated lately, but still satisfactory

Liquidity analysis

- current ratio  

3.12

2.95

2.02

2.73

1.94

1.69

- quick ratio    

1.64

1.11

0.66

1.30

0.63

0.52

 

 

Solvability analysis

Constant very good values

- the borrowing ratio (total debts/net worth) 

0.23

0.23

0.49

038

0.59

0.63

 

 

Profitability analysis (%)

Unsatisfactory – consecutive losses for more than 5 years

- return on capital

loss

loss

loss

loss

loss

Loss

- return on assets

loss

loss

loss

loss

loss

Loss

- gross profit margin

loss

loss

loss

loss

loss

Loss

 

 

Activity analysis

Within normal limits

- debtor’s days 

51

40

59

28

40

43

- creditor’s days

87

72

82

44

82

n/a

Stocks turnover, times/period

3

3

2

5

3

2

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.87

UK Pound

1

Rs.98.89

Euro

1

Rs.70.73

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

VNT

 

               

RATING EXPLANATIONS

 

RATING

STATUS

PROPOSED CREDIT LINE

 

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

 

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

 

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

 

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

 

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

 

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

 

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

Credit not recommended

 

--

NB

New Business

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.