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The world’s largest steelmaker ArcelorMittal has reported 18.91 per cent increase in net profit at $1.32 billion for the April-June quarter on the back of higher sales.
The company, led by billionaire Lakshmi N Mittal, had posted a net profit of $1.11 billion in the year-ago period.
Sales of the steel giant rose 16.96 per cent to $17.24 billion in the April-June quarter from $14.74 billion in the corresponding period last year.
ArcelorMittal follows January-December fiscal year.
“Net debt decreased to $11.9 billion as of June 30, 2017 compared with $12.1 billion as of March 31, 2017 due to positive free cash flow ($0.6 billion) (despite investment in working capital) offset in part by foreign exchange losses ($0.4 billion),” the company said in a statement.
Action 2020 plan
ArcelorMittal Chairman and CEO Lakshmi Mittal said: “We have materially improved our financial performance in the first half of 2017, and continue to make important progress on our Action 2020 plan.”
He said the recently announced acquisition of Ilva represents an unique opportunity to create value for the company shareholders. ArcelorMittal said it will leverage its strengths to realise Ilva’s potential as a Tier 1 supplier to European and Italian steel customers.
“Looking ahead demand remains strong in our core markets supporting robust order books and healthy levels of steel spreads. However, it remains a matter of concern that we are not able to capture the full benefits of this demand growth due to continued high levels of imports. We continue to work towards achieving a comprehensive trade solution in response to unfair imports,” Mittal said.
ArcelorMittal also reported steel shipments of 21.5 million tonnes in April-June 2017. Iron ore shipments stood at 9.5 mt, almost at the same level of last year, while crude steel production too stood at 23.2 mt, almost at the same level as in the corresponding period last year.
On the company's outlook, ArcelorMittal said: “Current market conditions are improved compared to 12 months ago with steel spreads currently at healthy levels. The demand environment is positive...which suggests that steel shipments in 2H 2017 will be higher than would normally be suggested by seasonality alone.”
"The company now expects that the cash needs of the business in 2017 to be approximately $4.6 billion (compared to $5.0 billion previous guidance). Given the liability management exercise and lower average debt, we now expect interest expenses to decline to $0.8 billion in 2017. While capex expectation for 2017 remains at USD 2.9 billion,” it said.
“Given the improved market conditions, the company now expects a full year 2017 investment in working capital of approximately $1.5 billion (compared to previous guidance of approximately $1.0 billion),” the company said.
With annual achievable production capacity of approximately 114 million tonnes of crude steel, and some 210,000 employees across 60 countries, ArcelorMittal is the world’s leading steel and mining company.
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