UPDATE: ArcelorMittal Earnings Up; Seasonal Dip Less Pronounced
27 Luglio 2011 - 1:19PM
Dow Jones News
Steel titan ArcelorMittal (MT) Wednesday reported a
better-than-expected rise in second quarter earnings and said this
year's seasonal steel demand slowdown in the second half will be
less pronounced due to a shift in apparent steel demand.
The Luxembourg-based steelmaker reported a 25% year-on-year rise
in second quarter sales to $25.13 billion and a 22% rise in
earnings before interest, taxes, depreciation and amortization, or
Ebitda, to $3.41 billion. The keenly watched earnings metric was
higher than analysts' expectations of $3.27 billion, according to a
Dow Jones Newswires poll of five analysts.
Although second quarter earnings were strong due to higher
achieved selling prices, the steelmaker expects third quarter
Ebitda to fall to between $2.4 billion and $2.8 billion due to
seasonal factors such as summer holidays in the northern
hemisphere, which typically lead to lower steel consumption.
"Although the third quarter will experience some seasonal
impact, we do not expect this to be as pronounced as last year, and
overall the group's performance in the second half of 2011 should
compare favorably with the second half of 2010," chief executive
Lakshmi Mittal said.
ArcelorMittal expects to ship more steel in the second half of
this year than the same period last year. It expects global
apparent steel consumption to grow by as much as 7.5% in 2011 with
Chinese apparent steel consumption forecast to rise more than 8.5%.
Japanese reconstruction demand stemming from one of its worst
earthquakes is also likely to prompt global demand to pick up in
the fourth quarter, Aditya Mittal, the company's chief financial
officer, said.
ArcelorMittal also said Wednesday that it has increased its 2011
capital expenditure plan by 10% to $5.5 billion after approving
plans to expand its Canadian iron ore operations, Brazilian steel
processing facilities, and investing in energy efficiency
programs.
CFO Mittal said the company remains on track to meet its target
to increase iron ore and coking coal from its own production by 10%
and 20% respectively in 2011, despite suffering iron ore output
setbacks in the first quarter.
At 1008 GMT, ArcelorMittal's shares were up 2.5% or EUR0.57 at
22.74 a share.
Second quarter net profit attributable to shareholders was down
10% on year to $1.54 billion.
CFO Mittal said that second quarter net profit wasn't a useful
metric to gauge the company's performance since the company has
undertaken hedging transactions to minimize the mark-to-market
losses on convertible bond related derivatives. In the second
quarter of last year, the company reported an exceptional gain of
$696 million due to those derivatives.
-By Alex MacDonald, Dow Jones Newswires; +44 (0)20 7842 9328;
alex.macdonald@dowjones.com
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