Chesterton Tribune



ArcelorMittal posts 3Q profit of $680M

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ArcelorMittal (AM) is reporting a net income of 680 million or earnings of 22 cents per share, compared to a net income of $1.11 billion or 38 cents in the second quarter and a net loss of $711 million or 31 cents in the year-ago period.

There was no exceptional income recorded in the third quarter. Exceptional income in the second quarter was $832 million related to a one-time gain on employee benefits following the signing of the new labor agreement with the United Steelworkers.

“Our third-quarter results reflect the progress the company is making to improve the underlying performance of the business, as well as improved market conditions since the start of the year,” AM Chair and CEO Lakshmi Mittal said in a statement released today.”

“Looking ahead, while real demand remains stable, we will be impacted by the unexpected significant increase in the price of coal,” Mittal noted. “While expectations are for steel prices to align with the increased costs, in the interim the higher coal price will impact steel spreads and fourth-quarter performance.”

“Overcapacity remains a concern, reinforcing the importance of a comprehensive trade response to minimize the impact of unfair trade across all product categories,” Mittal added. “But overall we remain pleased with the progress we have made this year. We are supported by a strong balance sheet, we have seen positive price momentum in our main markets, and the organization is fully aligned to successfully implement our five-year strategic plan, Action 2020.”


The company is projecting “a decline in profitability” in the fourth quarter, attributable to lower steel prices in the U.S. and the impact of “rapidly rising metallurgical coal prices on steel spreads in other geographies.”

The company has also lowered its forecasts in the U.S. for flat and long apparent steel consumption, “primarily due to stagnating manufacturing and declining machinery demand which has been negatively impacted by ongoing weakness in the energy market.”

Overall, though, the company is expecting fourth-quarter steel shipments to be comparable to third-quarter shipments; and expects total annual cash flows from operating activities to exceed total annual capital expenditures.

3Q Numbers

* Sales: $14.5 billion ($14.7 billion 2Q, $15.5 billion year-ago).

* Operating income: $1.2 billion ($1.8 billion 2Q, $20 million year-ago).

* EBITDA (earnings before interest, taxes, depreciation): $1.8 billion ($1.7 billion 2Q, $1.3 billion year-ago).

* Shipments: 20.3 million metric tons (22.1 million 2Q, 21.1 million year-ago).

* Crude steel production: 22.6 million metric tons (23.1 million 2Q, 23.1 million year-ago).

3Q NAFTA, Including U.S. Flat, Long, and Tubular

* Sales: $4.2 billion ($3.9 billion 2Q, $4.3 billion year-ago).

* Operating income: $424 million ($1.2 billion 2Q, $88 million year-ago).

* EBITDA: $566 million ($513 million 2Q, $340 million year-ago).

* Shipments: 5.3 million metric tons (5.4 million 2Q, 5.6 million year-ago).

* Crude steel production: 5.6 million metric tons (5.7 million 2Q, 5.9 million year-ago).

* Average steel selling price: $715 per ton ($660 2Q, $698 year-ago).


Posted 11/8/2016




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