ArcelorMittal's second-quarter profit beats expectations; warns over emerging markets
Steel and mining giant ArcelorMittal posted a drop in second-quarter profit as it cautioned over increased competition from steel imports, namely from Russia and China.
ArcelorMittal SA
€23.82
18:16 19/04/24
IBEX 35
10,729.50
18:45 19/04/24
Earnings before interest, tax, depreciation and amortisation fell to $1.40bn from $1.76bn in the same period last year, although this was still a little better than analysts’ expectations of $1.34bn.
Still, it downgraded its expectations for global steel consumption this year, saying it now expects the steel market to be flat, compared with a previous forecast for growth of 0.5% to 1.5%.
Arcelor said the outlook for emerging markets remains weak and revised its forecasts accordingly. In Brazil, it now expects average steel consumption to decline by 11% to 13%, while in China, it sees a 1% decline in 2015. It said that while there are signs of stabilisation in China due to the government’s target stimulus, the real estate market remains weak.
Nevertheless, given its specific geographical and end market exposures, the company said it expects its steel shipments to increase by between 3% and 5% in 2015 as compared to 2014.
Despite its fairly downbeat assessment of the market, ArcelorMittal said that assuming current market conditions persist into the second half and given an expected improvement in the US due to the end of destocking, as well as actions to improve the cost base, it has maintained its full-year EBITDA guidance range of $6bn to $7bn.
Chairman and chief executive officer Lakshmi Mittal said: “Despite continued pressure on both steel and iron-ore prices, we have delivered a consistent set of operating results compared with the first quarter.
At 1120 BST, ArcelorMittal shares were up 0.9% at €8.21.