Chesterton Tribune

ArcelorMittal posts weak 4Q, but solid full-year performance

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By KEVIN NEVERS

ArcelorMittal (AM) posted a net income for 2010 some 18 times larger than the one for 2009.

The company was reporting today a net income last year of $2.916 billion or $1.93 per share, compared to $157 million or 11 cents for the previous year.

AM was also reporting a net loss in the fourth quarter of $780 million or 51 cents per share, compared to a net income of $1.35 billion or 89 cents in the third quarter and $1.109 billion or 73 cents in the year-ago period.

“Although 2010 continued to be a challenging year, as anticipated we saw a slow and progressive recovery which enabled us to deliver a substantially improved performance compared with 2009,” AM Chair and CEO Lakshmi Mittal said. “The gradual underlying demand recovery continues and we expect 2011 to be stronger than 2010.”

“The year has started positively with the successful spin-off of Aperam,” Mittal added. “We have also continued to pursue expansion in mining and have recently acquired control of Baffinland, an extremely high-quality iron-ore asset in Canada.”

In fact, the spin-off of the Aperam stainless steel business resulted in a $547 million loss posted in the fourth quarter, in recognition of a $598 million non-cash impairment charge following the reclassification of Aperam as a discontinued operation.

The company also attributed the fourth quarter’s weaker results to high operating costs, “primarily due to a rise in raw materials cost, while steel selling prices were generally lower for the quarter.”

Some 2010 numbers:

•Sales of $78.025 billion ($61.021 billion in 2009).

•Shipments of 85 million metric tons (69.6 million in 2009).

•Crude steel production of 90.6 million metric tons (71.6 million in 2009).

•Operating income per ton of $42 (an operating loss per ton of $21 in 2009).

•Capital expenditures were $3.3 billion ($2.7 billion in 2009), while the company is projecting capital expenditures in 2011 to total around $5 billion.

•As of Dec. 31, 2010, the company had reduced net debt to $19.7 billion ($22.1 billion on Sept. 30, 2010).

•As of Dec. 31, the company had cash and cash equivalents of $6.3 billion and available credit lines of $11.3 billion, for total liquidity of $17.6 billion ($14.9 billion on Sept. 30).

1Q Outlook

Shipment volumes and average steel selling prices are expected to increase in the first quarter, while capacity utilization levels are expected to rise to 76 percent, the company said. But operating costs are also expected to increase due to higher raw material prices.

In addition, the company anticipates that work capital requirements and net debt will increase as well, “in line with the increased activity levels, higher raw material costs, and increased investment activity.”

Flat Carbon America

The Flat Carbon America segment posted the following numbers for the fourth quarter and year:

•An operating income of $378 million in the fourth quarter, compared to $521 million in the third quarter and $180 million in the year-ago period. An operating income for the full year of $2.044 billion, compared to an operating loss in 2009 of $757 million.

•Sales for the fourth quarter were $4.985 billion, compared to $4.75 billion in the third quarter and $4.069 billion for the year-ago period. Sales for the full year were $19.301 billion, compared to $13.34 billion in 2009.

•The average selling price was $769 per ton in the fourth quarter, compared to $826 in the third quarter and $719 in the year-ago period. The average selling price for the year was $781 per ton, compared to $698 in 2009.

•Operating income per ton was $70, compared to $105 in the third quarter and $37 in the year-ago period. Operating income for the full year was $97, compared to an operating loss of $47 in 2009.

•Crude steel production was 5.432 million tons in the fourth quarter, compared to 5.932 million in the third quarter and 5.402 million in the year-ago period. Crude steel production for the full year was 23.101 million tons, compared to 16.556 million in 2009.

 

Posted 2/8/2011