Chesterton Tribune

ArcelorMittal posts strong quarter

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By KEVIN NEVERS

ArcelorMittal is reporting a net income in the first quarter of 2011 of $1.069 billion or 69 cents per share, compared to a net loss in the fourth quarter of $780 million or 51 cents and a net income of $640 million or 42 cents in the year-ago period.

“As anticipated, we have seen a stronger start to the year, with an increase in both shipments and selling prices,” ArcelorMittal Chair and CEO Lakshmi Mittal said in a statement released today. “This is expected to further improve in the second quarter as the underlying demand recovery continues. We remain confident that 2011 will be a stronger year than 2010.”

“This quarter we have started to separate out the profit contribution from our mining operations,” Mittal noted, “which has the added benefit of enabling us to maximize returns, optimize capital allocation, and pursue other plans for growth in this area.”

Discontinued operations for the quarter amounted to a gain of $461 million related to the spin-off the stainless steel business into Aperam, completed on Jan. 25. The results also reflect a non-cash gain of $336 million related “to the reversal of provisions for inventory write-downs, triggered by improved market conditions, and reversal of provisions for litigations.”

Some 1Q Numbers

•Sales of $22.184 billion, compared to $20.699 billion in the fourth quarter and $17.428 billion in the year-ago period.

•Shipments of 22 million metric tons, compared to 21.1 million in the fourth quarter and 21.0 million in the year-ago period.

•Crude steel production of 23.5 million metric tons, compared to 21.6 million in the fourth quarter and 22.5 million in the year-ago period.

•Operating income of $1.431 billion, compared to $397 million in the fourth quarter and $577 million in the year-ago period.

•Operating income per ton of $65, compared to $19 per ton in the fourth quarter and $27 per ton in the year-ago period.

•Capacity utilization increased to around 75 percent in the first quarter, compared to around 69 percent in the fourth quarter “due to improved market demand.”

•As of March 31, net increased to $22.6 billion, compared to $19.7 billion at year’s end.

•As of March 31, the company had cash and cash equivalents of $3.9 billion and total liquidity of $14.9 billion, compared to cash and cash equivalents of $6.3 billion and total liquidity of $17.6 billion at year’s end.

2Q Outlook

Steel shipment volumes and average steel selling prices are expected to increase in the second quarter, while capacity utilization levels should improve to around 80 percent.

Operating costs are also expected to increase due to higher raw material prices.

In addition, the company “expects working capital requirements to increase in line with increased activity and prices, which is expected to result in a further increase in net debt” in the second quarter.

Flat Carbon Americas 1Q

•An operating income of $307 million, compared to an operating loss of $67 million in the fourth quarter and an operating income of $151 million in the year-ago period.

•Sales of $4.939 billion, compared to $4.573 billion in the fourth quarter and $4.077 billion in the year-ago period.

•The average selling price was $830 per ton, compared to $769 in the fourth quarter and $722 in the year-ago period.

•Operating income was $55 per ton, compared to an operating loss of $12 per ton in the fourth quarter and an operating income of $29 per ton in the year-ago period.

•Crude steel production was 6.063 million tons, compared to 5.636 million in the fourth quarter and 5.679 million in the year-ago period.

•Steel shipments were 5.563 million tons, compared to 5.432 million in the fourth quarter and 5.271 million in the year-ago period.

 

 

Posted 5/11/2011