ArcelorMittal to Invest $2.2 Billion - Analyst Blog
23 Maggio 2011 - 10:00AM
Zacks
Steel giant,
ArcelorMittal (MT) is set to expand its mining
operations in Quebec with an investment of C$2.1 billion ($2.2
billion). The expansion will likely create 8000 jobs during
construction and more than 900 permanent jobs once completed.
The investment will allow
ArcelorMittal Mines Canada to increase its annual production of
iron ore concentrate from 14 million tonnes to 24 million tonnes by
2013.
The plan involves expansion of
ArcelorMittal's Mont-Wright mining complex and additional
construction at Port-Cartier, and is subject to environmental and
other regulatory approvals.
Last month, ArcelorMittal reported
diluted net earnings of 69 cents per share in the first quarter of
2011, surpassing the Zacks Consensus Estimate of 47 cents as well
as last year’s 42 cents per share.
Total steel shipments in the first
quarter of 2011 were 22.0 million metric tonnes compared with 21.0
million metric tons in the year-ago quarter.
Quarterly revenues increased 27.3%
year over year to $22.2 billion from $17.4 billion in the year-ago
quarter and increased 7.2% sequentially. Sales were higher over the
previous quarter primarily due to higher shipment volumes (+4%).
However, the results were slightly below the Zacks Consensus
Estimate of $22.8 billion.
For the second quarter of 2011,
management expects EBITDA to be approximately $3.0 - $3.5 billion.
Steel shipment volumes, average steel selling prices and EBITDA/ton
are expected to increase sequentially, while capacity utilization
levels are expected to improve to approximately 80%.
Additionally, operating costs are
expected to increase sequentially due to higher raw material
prices. The company also expects mining production and
profitability to improve sequentially in the second quarter.
The company expects working capital
requirements to be in line with the increased activity levels and
prices resulting in further increase in net debt in the second
quarter. The company expects its full-year 2011 capital expenditure
to reach $5 billion, of which $1.4 billion is estimated to be spent
on mining.
Major competitors of
ArcelorMittalare are United States Steel Corp. (X)
and Tata Steel Limited.
We maintain our Outperform
recommendation on ArcelorMittal with a Zacks #2 Rank (Buy) on the
stock.
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