ArcelorMittal trims loss by 24pc
London, February 8, 2014
ArcelorMittal yesterday said that it cut its net loss by a quarter last year as it turned in surprisingly strong operating figures, saying steel-making was back on track.
The steel and mining giant also reported strong progress in cutting net debt, in an overall sunny assessment of emergence from bad times.
The net loss fell by 24 per cent from the 2012 level to $2.5 billion from $3.4 billion, it said.
This was despite a fall in sales by 5.6 per cent to $79.4 billion.
The steel market, notably in Europe, was hard hit by the economic downturn, but the group said that it faced 2014 with guarded optimism.
Steel is at the heart of industrial production, and the group said it was now counting on an upturn of demand this year in its two main markets in the US and Europe.
For North America, it expected demand to grow by 3.5-4.5 per cent, even though in the first few weeks of the year it had fallen owing to bad weather.
In Europe, where demand has fallen by more than 20 per cent since the beginning of the crisis, the worst was now over and the market was expected to grow by 1.5-2.5 per cent pulled by industrial activity, it said.
Finance director Aditya Mittal said the group was beginning the year in a stronger position than had been the case for several years.
Operating profit, as measured by earnings before interest, tax, depreciation and amortisation (EBITDA), was $6.9 billion, beating the target of at least $6.5 billion.
The outcome was above analysts' expectations of $6.78 billion.
However, in 2012, operating profit had been higher at $7.7 billion.
Operating profit is a vital measure of a company's ability to generate more value from outputs than it incurs in costs for inputs, in its basic business before non-operating items such as restructuring costs.
The group reached the low point of the downturn cycle in the first half of last year, and began to recover in the second half.
In the fourth quarter, sales rose by 2.8 per cent from the equivalent figure the previous year to $19.8 billion and the EBITDA figure by 22.6 per cent to $1.9 billion.
The company said it had done better than its targets in reducing net debt which had fallen to $16.1 billion, below the objective of $17 billion, and held to its intention to cut this to $15 billion in the medium term.
The group has worked hard during the bad years to reduce production capacity, action which led it into bitter conflict with unions and ministers over the closure of blast furnaces at Florange in north-eastern France.
But now chief executive Lakshmi Mittal says that the improving economic situation has led the group to resume some projects for strategic expansion.
In December, the group showed its sharp predatory instinct by buying a plant in the US from its German competitor ThyssenKrupp at a knock-down price of $1.5 billion.
This factory, in Calvert, Alabama, will enable ArcelorMittal to strengthen its position in the US where its main customers in the car and construction sectors are driving forwards.-Reuters