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ArcelorMittal posts 2nd quarter profit of $1.86 billion

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By KEVIN NEVERS

ArcelorMittal is reporting a net income of $1.86 billion or $1.84 basic earnings per share in the second quarter of 2018, compared to $1.19 billion in the first quarter and $1.32 billion in the year-ago period.

“This is an encouraging set of results reflecting the structural improvements in both the global steel industry due to supply reform dynamics and within ArcelorMittal as a result of Action 2020,” Chair and CEO Lakshmi Mittal said in statement released today. “The significant improvement in our balance sheet and earnings outlook has been recognized by the main credit agencies and the company has achieved its stated aim of regaining its investment grade credit rating.”

“The outlook for the second half of the year as we anticipate favorable market conditions continuing and are well positioned to capitalize on this from our leadership position across many key markets,” Mittal added. “We believe improvements in underlying industry fundamentals are sustainable, although there is still more to be done to thoroughly address the issue of global overcapacity. We will retain a deleveraging bias, whilst also pursuing selective opportunities to strengthen the foundations of sustainable value creation.”

Outlook

Based on year-to-date growth and the current economic outlook, the company is expecting global apparent steel consumption (ASC) to grow further in 2018 by 2 to 3 percent, up from the previous projection of 1.5 to 2.5 percent.

ASC specifically in the U.S. is expected to grow 2 to 3 percent in 2018, up from the previous projection of 1.5 to 2.5 percent, driven by demand in machinery and construction.

The company noted that it resumed dividends to shareholders in May and bought back $200 million shares in March. “The company is committed to increase shareholder returns once (its) net debt target is achieved.”

2Q Numbers

* Sales: $19.99 billion (1Q $19.18 billion, year-ago $17.24 billion). Sales were 4.2 percent higher in 2Q compared to 1Q primarily due to higher average steel selling prices (+2.1 percent), higher steel shipments (+1.8 percent), and higher market-priced ore shipments (+9.3 percent).

* Operating income: $2.36 billion (1Q 1.56 billion, year-ago $1.39 billion). Operating income in 1Q was impacted by impairments and exceptional charges.

* Operating income per ton: $109 (1Q $73, year-ago $65).

* Crude steel production: 23.2 million metric tons (1Q 23.3 million, year-ago 23.2 million).

* Steel shipments: 21.8 million metric tons (1Q 21.3 million, year-ago 21.5 million). Shipments were 1.8 Percent higher in 2Q compared to 1Q, primarily due to higher steel shipments in Brazil, offset by the adverse impact of a nationwide truck strike.

2Q NAFTA, Including U.S. Facilities

* Sales: $5.35 billion (1Q $4.75 billion, year-ago $4.6 billion). Sales increased by 12.7 percent in 2Q compared to 1Q mainly due to higher steel shipment volumes and higher average steel selling prices.

* Operating income: $660 million (1Q 308 million, year-ago $378 million).

* Crude steel production: 5.94 million tons (1Q 5.86 million, year-ago 5.41 million).

* Steel shipments: 5.8 million tons (1Q 5.55 million, year-ago 5.41 million). Shipments increased by 4.4 percent compared to 1Q driven mainly by improved market demand in the U.S.

* Average steel selling price: $853 per ton (1Q $779, year-ago $760).

 

 

Posted 8/1/2018

 
 
 
 

 

 

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