ArcelorMittal Swings to Profit, Expresses Hope About Trump Policies -- Update
10 Febbraio 2017 - 12:05PM
Dow Jones News
By Christopher Alessi
FRANKFURT--Steelmaker ArcelorMittal SA said Friday it swung to a
profit in the fourth quarter of 2016, while its chief executive
sounded an optimistic note about 2017 and the potential impact of
President Donald Trump's proposed economic policies on the
company.
Net profit for the period ended Dec. 31 was $403 million,
compared with a loss of $6.69 billion during the same period a year
earlier.
The company returned to profitability mainly because of a lack
of exceptional charges stemming from a decline in international
steel prices, which caused losses in 2015.
"As we enter into 2017, I see there is a positive momentum both
in the business and the market," Chief Executive Lakshmi Mittal
said in an interview Friday.
Mr. Mittal noted rising steel demand in the crucial U.S. market
and said Mr. Trump's promises to invest in U.S. infrastructure and
manufacturing are "good for us" and would help the steel industry
at large.
He also suggested the Trump administration could provide a
bulwark against a glut of Chinese steel on the global market. "I
hope that with Trump's new administration, strong trade actions
will help to address to China's overcapacity," Mr. Mittal
added.
China has flooded the world market with an excess of less
expensive steel and aluminum, helping to trigger a continuing
consolidation in the steel industry. The U.S. Commerce Department
late last year launched an investigation into whether Chinese
steelmakers are transporting steel through Vietnam to evade U.S.
import tariffs.
Mr. Mittal said that impending consolidation in the industry
would be "good for everyone."
Luxembourg-based ArcelorMittal said last year that it planned to
team up with Italy's privately held Marcegaglia SpA to take over
the ailing Ilva steel plant in Italy, which is Europe's largest
single steel plant and a producer of flat-steel products. The deal,
if it goes ahead, would solidify ArcelorMittal's position atop the
European flat-steel market, ahead of Germany's Thyssenkrupp AG.
Thyssenkrupp is in talks to combine its steel operations with
India's Tata Steel Ltd., a move Mr. Mittal said he hopes will come
to fruition.
ArcelorMittal, the world's largest steelmaker, said it expects
to increase capital expenditure in 2017 to $2.9 billion from $2.4
billion last year, a result of recovering steel markets. The
company said it expects global apparent steel consumption to
continue to expand in 2017, growing by between 0.5% and 1.5%.
The company early last year was forced to tap shareholders with
a $3.1 billion rights issue to shore up its balance sheet after the
slump in steel prices in 2015. That move, along with improved
market conditions last year, helped it reduce its net debt to
$11.06 billion at the end of 2016 from $15.68 billion in 2015.
Chief Financial Officer Aditya Mittal on a conference call with
reporters Friday lauded the progress but cautioned that markets
"remain volatile" largely as a result of Chinese overcapacity.
ArcelorMittal's fourth-quarter sales rose 1% to $14.1 billion as
a result of higher steel shipment volumes, higher average steel
selling prices and higher iron-ore reference prices. But those
gains were offset by lower market-priced iron-ore shipments, the
company said.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
February 10, 2017 05:50 ET (10:50 GMT)
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