ArcelorMittal (AM) posted its second consecutive profit in the fourth quarter of 2009 and managed after wracking up deep losses in the first half of the year to eke out an annual profit as well.

The company is also modestly hopeful of its prospects in 2010.

AM reported today a net income in the fourth quarter of $1.07 billion or 71 cents per share, compared to a net income in the third quarter of $903 billion or 60 cents per share and a net loss in the year-ago period of $2.6 billion or $1.93 per share.

For the full year AM reported a net income of $100 million or 8 cents per share, compared to a net income in 2008 of $9.4 billion or $6.80 per share.

“In a very difficult environment, ArcelorMittal has succeeded in reducing its cost base substantially and significantly strengthening the balance sheet,” AM Chair and CEO Lakshmi Mittal said. “We therefore start the year in a good position to benefit from the progressive, albeit slow, recovery that is underway. Although 2010 will continue to be challenging, we are now increasing capital expenditure to take full advantage of selected growth opportunities as demand improves.”

Some fourth-quarter numbers:

•Sales of $18.642 billion, compared to $16.17 billion in the third quarter ($22.089 billion in the year-ago period).

•Shipments of 20 million metric tons, compared to 18.2 in the third quarter (17.1 in the year-ago period).

•Crude steel production of 22.5 million metric tons, compared to 19.6 in the third quarter (14.9 in the year-ago period).

•Operating income per ton of $34, compared to $17 in the third quarter (an operating loss per ton of $203 in the year-ago period).

•Capacity utilization increased to 70 percent in the fourth quarter, compared to 61 percent in the third quarter, and is anticipated to increase gradually to around 75 percent in the first quarter of 2010.

Although the company is expecting higher shipments in the first quarter of 2010 compared to the fourth quarter, this increase will likely be offset by lower average selling prices and increased costs. AM is also expecting net debt to increase in the first quarter “primarily due to an increase in working capital due to rising activity levels.”

For the year AM reported reducing its net debt to $18.8 billion, down from $32.5 billion at the “start of the global economic crisis,” which the company dates at Sept. 30, 2008.

“As of the end of the fourth quarter of 2009, the company had achieved annualized sustainable savings of $2.7 billion,” AM noted. “The company has also achieved $5 billion . . . of annualized temporary fixed cost savings in Q4 2009 resulting from industrial optimization in response to lower demand.”

Full-year results were negatively impacted by an exceptional charge of $2.4 billion pre-tax related chiefly to write-down on inventory and provisions for workforce reductions, partially offset by exceptional and net gains totaling $488 million, the company said. Full-year results in 2008 were negatively impacted by exceptional charges of $6.1 billion.

The company is projecting capital expenditures of around $4 billion in 2010, compared to $2.8 billion in 2009 and $5.5 billion for 2008.

As of Dec. 31, 2009, the company had cash and cash equivalents of $6 billion and available credit lines of $11.2 billion, for total liquidity of $17.2 billion, compared to total liquidity of $18.4 billion on Sept. 30, 2009.

The Flat Carbon Americas segment posted the following numbers for the fourth quarter and year.

•An operating income of $180 million in the fourth quarter, compared to $83 million in the third quarter and an operating loss of $433 million in the year-ago period. An operating loss for the full year of $757 million, compared to an operating income for 2008 of $2.524 billion.

•Sales for the fourth quarter were $4.069 billion, compared to $3.287 billion in the third quarter—an increase of 24 percent—and $4.542 billion for the year-ago period. Sales for the year were $13.34 billion, compared to $27.031 for 2008.

•The average selling price was $719 per ton in the fourth quarter, compared to $653 in the third quarter and $1,007 in the year-ago period. The average selling price for the year was $69 per ton, compared to $226 in 2008.

•Operating income in the fourth quarter was $37 per ton, compared to $20 per ton in the third quarter and an operating loss of $110 per ton in the year-ago period.

•Crude steel production reached 5.4 million tons in the fourth quarter, compared to 4.3 million tons in the third quarter, an increase of 25 percent. “Following the improvement in demand, the company has restarted certain steel production facilities,” AM said.

Posted 2/10/2010