Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

ArcelorMittal beats profit expectations after lockdown low

Published 11/05/2020, 01:26 AM
Updated 11/05/2020, 02:00 AM
© Reuters. FILE PHOTO: The logo of ArcelorMittal is pictured in front of heat rising from a red-hot steel plate at the ArcelorMittal steel plant in Ghent

© Reuters. FILE PHOTO: The logo of ArcelorMittal is pictured in front of heat rising from a red-hot steel plate at the ArcelorMittal steel plant in Ghent

By Philip Blenkinsop

BRUSSELS (Reuters) - ArcelorMittal (LU:MT) (AS:MT), the world's largest steelmaker, reported third-quarter core profit above expectations on Thursday as the easing of COVID-19 lockdowns led to improved demand in all regions.

The company, which makes around 5% of the world's steel, said core profit (EBITDA) fell 15% from a year earlier to $901 million, compared with an average expectation of $838 million in a company-compiled poll.

CEO Lakshmi Mittal said in a statement that steel markets had recovered from a very challenging second quarter, with particular improvement in profits in Brazil and its unit grouping South Africa, Kazakhstan and Ukraine.

The company said its mining business also fared better, with higher iron ore prices and increased production. It now expects iron ore shipments sold at market prices to be about the same as in 2019. It had previously forecast a 5% decline.

ArcelorMittal said it had begun to restart some of its idled capacity, although demand remained below normal, with a second COVID-19 wave adding to uncertainty.

The company added that the experience of the past six to seven months had it operating with a leaner cost structure and it aimed to detail more permanent cost savings when it reports full year results in February. It has already decided to close for good its blast furnace in Krakow, Poland.

ArcelorMittal also hit its $7 billion net debt target at the end of the quarter, the lowest level since ArcelorMittal's creation in 2006 and a point at which the company can start returning cash to shareholders.

© Reuters. FILE PHOTO: The logo of ArcelorMittal is pictured in front of heat rising from a red-hot steel plate at the ArcelorMittal steel plant in Ghent

The company is poised to sell its U.S. assets in a cash and shares deal with Cleveland-Cliffs Inc (N:CLF) for $1.4 billion in a deal that has allowed it to launch a $500 million share buyback.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.