Stronger manufacturing and construction markets in Europe have boosted the underlying profit result of the world’s biggest steel maker as it tries to recover from several years of extremely difficult conditions.
In a statement released late on Friday (Sydney time), Luxembourg based ArcelorMittal says its operating profit (underlying profit) rose from $US404 million ($A432 million) in the March quarter of 2013 to $US674 million in the first three months of this year as iron ore shipments (14.8 Mt) jumped 15 percent and steel shipments (21.0 million) edged up 3 percent year-on year.
Driving the result was an improvement in European markets, where recovering automotive and construction conditions drove flat and long steel product shipments 5.8 percent and 6.0 percent higher compared with the fourth quarter of last year respectively.
Moreover, the group says positive manufacturing data especially in Poland, the Czech Republic and the UK as well as encouraging car registration data within the Eurozone points to likely higher demand for flat products throughout Europe, albeit with weaker construction readings outside of Germany, Poland and the UK clouding the outlook for long products in that market.
Once write-downs and other once-off accounting items are added in, however, the company still incurred a net loss after tax of $US205 million, taking its cumulative after tax loss for the past twelve months to $2.405 billion – losses which largely flow from difficult operating conditions and subdued output prices over the past several years notwithstanding the recent improvement.
As well, the group has had to raise billions of dollars through capital initiatives in order to pay down debt, which at $US18.5 billion remains well above the its medium term target of $US15 billion.
Despite this, Chairman and CEO Lakshmi N. Mittal welcomed the latest result, adding that the group remained cautiously optimistic about the outlook for the remainder of the year amid encouraging markets in Europe and the United States.
“Today’s figures continue to show the improved year-over-year performance of our business driven by recovering steel markets, the expansion of our mining operations, and the continued benefits of our focused cost optimisation,” Mittal said.