By Alex MacDonald
LONDON--Steel titan ArcelorMittal (MT) Thursday revised its
full-year earnings guidance lower, largely due to
weaker-than-forecast steel demand after reporting a fourth
consecutive quarterly net loss due to lower steel prices and
restructuring charges.
ArcelorMittal, the world's largest steelmaker by volume,
reported a swing to a net loss attributable to shareholders of $780
million in the three months ending June 30 compared with a net
profit of $1.02 billion in the same quarter a year before. The
figure missed expectations of a net profit of $117 million based on
a Dow Jones poll of seven analysts.
The company incurred $173 million in restructuring charges
during the quarter, including $137 million for the long-term idling
of two blast furnaces in Florange, France earlier this year.
Sales dropped 10% on the year to $20.2 billion.
The company's keenly watched earnings before interest, taxes,
depreciation and amortization, or Ebitda, fell 34% on the year to
$1.7 billion, as steel shipments dipped 1.8% on the year to 21.7
million metric tons.
The Ebitda figure was broadly in line with analysts'
expectations of $1.71 billion.
The Luxembourg-based steelmaker lowered its 2013 Ebitda guidance
from more than $7.1 billion in 2013 to more than $6.5 billion,
largely due to lower-than-forecast apparent steel demand and
lower-than-anticipated prices for steel-making raw materials that
it sells, the company said. The Ebitda figure is still based on
expectations of a 2% increase in steel shipments and 20% increase
in marketable iron ore shipments during the year as well as
significant cost savings, the company said.
"Although we have revised our full-year guidance, the second
half should deliver a clear underlying improvement relative to the
second half of 2012, which we believe marked the lowest point in
the cycle," said ArcelorMittal Chief Executive Lakshmi Mittal.
The steelmaker has idled production capacity, cut its dividend,
sold billions of dollars in assets and raised $4.3 billion via a
rights issue in order to pay down debt after the world's largest
credit ratings agencies downgraded the company's debt to junk
status.
Steelmakers around the world are facing profit-margin squeezes
due to weak steel demand stemming from slower-than-expected Chinese
economic growth and still-frail demand from U.S. and European
economies.
The steelmaker, which produces more steel than its next two
closest rivals put together, said net debt fell to $16.2 billion at
the end of June compared with $21.8 billion at the end of December,
beating its net debt target of $17 billion by the end of the second
quarter. It however said net debt will rise in the second half of
the year to $17 billion.
The steelmaker also raised its capital expenditure for this year
to $3.7 billion from $3.5 billion.
ArcelorMittal's shares closed Wednesday down 0.2% at EUR9.90 a
share, resulting in a market capitalization of EUR16.48 billion
($21.87 billion). The company's shares are down 23% since the
beginning of the year.
Write to Alex MacDonald at alex.macdonald@wsj.com
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