Chesterton Tribune

ArcelorMittal posts weak 1Q but North American ops are strong

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By KEVIN NEVERS

ArcelorMittal (AM) is reporting a better first quarter than fourth quarter but a huge year-over-year decline.

Today the company posted a net income of $11 million or 1 cent per share for the first quarter of 2012, compared to a net loss of $1 billion or 65 cents in the fourth quarter of 2012 and a net income of $1.069 billion or 69 cents in the year-ago.

“During the first quarter we saw improved sentiment in a number of key markets,” AM Chair and CEO Lakshmi Mittal said. “Demand in North America continues to grow, driven by the automotive and white- and yellow-good sectors. Europe remains the biggest challenge and during the first quarter we announced the idling of a number of facilities in line with our strategy of meeting demand from our more competitive sites. Although impacted by seasonal factors in the first quarter, our mining business remains a key area for growth and we are targeting a further increase in production in 2012.”

“We have also made good progress with our strategy to divest non-core assets and expect to take further steps in this regard throughout the year. Together with improved operating cash flows, this will reduce net debt, which remains a priority for the group.”

The company reported impairment charges of $69 million in the first quarter ($228 million in the fourth quarter); restructuring charges of $107 million ($219 million in the fourth quarter); foreign exchange and other net financing losses of $347 million (gains of $26 million in the fourth quarter); and an income tax benefit of $190 million (an income tax expense of $833 million in the fourth quarter).

1Q Numbers

•Sales of $22.70 billion, compared to $22.44 billion in the fourth quarter and $22.18 billion in the year-ago. Sales were higher compared to the fourth quarter chiefly due to higher steel shipment volumes, offset by lower average steel selling prices and foreign exchange.

•Shipments of 22.2 million metric tons, compared to 20.6 million in the fourth quarter and 22.0 million in the year-ago.

•Crude steel production of 22.8 million metric tons, compared to 20.6 million in the fourth quarter and 22.0 million in the year-ago.

•Operating income of $663 million, compared to $47 million in the fourth quarter and $1.43 billion in the year-ago.

•As of March 31, net debt increased by $1.1 billion to $23.6 billion, from $22.5 billion on Dec. 31, driven by decreased cash flow from operations, foreign exchange losses, and dividends paid.

•As of March 31, the company had cash and cash equivalents of $4.9 billion, compared to $3.9 billion on Dec. 31.

Flat Carbon Americas 1Q

•Operating income of $407 million, compared to $1 million in the fourth quarter and $307 million in the year-ago.

•Sales of $5.27 billion, compared to $5.03 billion in the fourth quarter and $4.93 billion in the year-ago. Sales increased primarily due to higher average steeling selling prices, up 2.1 percent, and steel shipment volumes.

•Average selling price of $886 per ton, compared to $868 in the fourth quarter and $830 in the year-ago.

•Operating income per ton of $72, compared to $0 in the fourth quarter and $55 in the year-ago.

•Crude steel production of 6.24 million tons, compared to 6.00 million in the fourth quarter and 6.06 million in the year-ago. The improvement was driven by strong market demand in North America, following seasonal weakness in the fourth quarter, the company said.

•Shipments of 5.67 million tons, compared to 5.45 million in the fourth quarter and 5.56 million in the year-ago. Higher shipments from North American operations were partially offset by lower demand in Brazil, which was impacted by a weak slab market, the company said.

 

Posted 5/10/2012

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