ArcelorMittal records loss in Q1

Lakshmi Mittal, CEO at ArcelorMittal SA

Lakshmi Mittal, CEO at ArcelorMittal SA

Surprisingly or not, ArcelorMittal S.A. informed that it recorded a net loss of around $345 million for the first quarter ended March as the giant steelmaker has been facing though market conditions, including low demand for steel. Despite the first-quarter net loss, the world’s largest steelmaker has not revised its projections for the ongoing year as it expects that steel and iron ore sales will substantially surge in the near future on growing demand from the world’s second economy. But the fact is that the company’s restructuring attempts have also brought a ray of hope while the steel markets has finally started stabilizing.

ArcelorMittal’s results for Q1

On the 10th of May, ArcelorMittal S.A. issued its results for the quarter ended March, showing some astonishing figures and trends. Interestingly, the figures indicated that earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.57 billion in the three fist months of the year up from $1.56 billion noted a quarter earlier. However, these core profits slumped significantly when compared to the first quarter of 2012 when they totaled more than $2.1 billion.

Moreover, the company also informed that it recorded a net loss of approximately $345 million for the three-month period. Without a doubt, tough conditions in the steel market, including low demand for steel, were the main causes of the aforementioned net loss. Just to have a datum point we should remind that in the first quarter of 2012 ArcelorMittal reported a $92 million profit. As for sales, the giant steelmaker saw them dive approximately 13 percent on year-on-year basis to roughly $19.75 billion while operating profit slumped staggering 50 percent to around $404 million.

The company also underlined in a statement that steel shipments in the first quarter decreased by roughly 6 percent from a year earlier to 20 .9 million metric tons.  However, it is worth mentioning that they climbed around 5 percent from a quarter earlier.

Tough steel market

Undeniably, steelmakers have been struggling since the beginning of the global financial crisis in 2008, yet the European steel companies have been also suffering from the continuing debt crisis in the eurozone which led to the drastic slumps in demand for steel, not to mention steel oversupply as well.

While the steel market was facing more and more challenges, ArcelorMittal S.A. decided to implement some crucial and inevitable restructuring reforms in its European assets. Commenting on the first-quarter results, Lakshmi Mittal, chief executive officer at ArcelorMittal S.A., underlined: “Economic conditions remain challenging but our performance in the quarter reflects the results of the management action we have taken to confront the effects of the financial crisis,” adding that the company had already stated bearing fruits due to all introduced measures. Indeed, the company is still trying to improve its performance, thus it reposes high in stronger demand for steel from developing markets, including China.

Certainly, for all steelmakers, including ArcelorMittal S.A., good news is that the estimates show that world production of steel will be driven by a 3.5 percent growth in China’s production, while the prices are also expected to jump more than 2 percent.

Interestingly, ArcelorMittal S.A. has not revised its forecast for the ongoing year in spite of the recorded net loss. The projections indicate that the steelmaker is expected to witness a 2 percent growth in steel shipments, while iron ore shipments are projected to jump staggering 20 percent. Moreover, the full-year core profits are expected to amount to more than $7.1 billion.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Should you sit out on the Rivian IPO?

Should you sit out on the Rivian IPO?

Amazon-backed EV maker Rivian has filed for its initial public offering. We find out if the Rivian IPO is worth the price or simply the next internet bubble.
1 day ago
Bitcoin vs Gold: Here’s what experts have to say

Bitcoin vs Gold: Here’s what experts have to say

Many say that Bitcoin is the digital version of gold. While gold, like the dollar, is an outdated investment vehicle. We turned to experts to settle the bitcoin vs gold debate.
2 days ago
Best Pharma Stocks to Buy Right Now

Best Pharma Stocks to Buy Right Now

Industry Leaders has curated a brief list of the best pharmaceutical stocks you can buy right now, along with a list of pharma penny stocks that have the best potential to grow in
3 days ago
Why Is Squid Game So Popular?

Why Is Squid Game So Popular?

The Squid Game segments were watched by at least 132 million people in the first 23 days of the show on Netflix. Know what excited the viewers.
4 days ago
Amazon under Congressional scrutiny for pushing own products over others

Amazon under Congressional scrutiny for pushing own products over others

US judiciary Antitrust Committee writes a letter saying that Amazon is given time till November 1 to prove that it utilizes seller data available to create competing products and p
5 days ago
Porsche’s Taycan EV outsells ICE powered its 911 sports car

Porsche’s Taycan EV outsells ICE powered its 911 sports car

The Porsche Taycan EV has outsold the Porsche 911 sports car for the first time since it was introduced in 2019 by the German automaker.
6 days ago