ArcelorMittal reports USD 780-million loss during April-June quarter

Luxembourg, PTI | Updated : 01 August 2013, 02:53 PM

Steel giant ArcelorMittal on Thursday reported a net loss of USD 780 million for the April-June quarter on lower sales and margin though hopes things would be better in the second half of the year.

The billionaire NRI Laxmi Mittal-led company had clocked a net profit of USD 1.016 billion in the corresponding quarter a year ago, it said in a statement.

Sales dipped to USD 20.197 billion during the April-June quarter from USD 22.478 billion a year ago, mainly because of the subdued price and lower shipments.

The world's largest steel maker sold 21.3 million tonnes during the three-month period, marginally lower when compared with 21.7 million tonnes achieved a year ago, according to a company statement.

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) of the company was down to USD 1.7 billion compared to USD 2.559 billion a year ago.

Foreign exchange and other net financing costs, up by USD 375 million over a year ago, USD 39 million impairment charges and USD 173 million restructuring charges also impacted the bottomline of the company.

"The operating environment in the first half continued to be challenging but we have delivered progress in a number of important areas...The second half should deliver a clear underlying improvement relative to the second half of 2012," Mittal said.

"The benefits of our restructuring efforts – particularly in Europe - are evident; strong cash-flow performance has enabled us to reduce net debt to below our mid-year target," he added.

During the first half, ArcelorMittal's net loss stood at USD 1.1 billion as compared to net income of USD 1.1 billion.

Total steel shipments for the January-June period were lower at 42.3 million tonnes compared to 43.9 million tonnes in the first of the last year.

"Sales for H1, 2013 decreased by 11.6 per cent to USD 39.9 billion as compared with USD 45.2 billion for H1, 2012, primarily due to lower average steel selling prices (6 per cent) and lower steel shipments (3.7 per cent)," the company said.

ArcelorMittal said underlying profitability of the firm was expected to improve in 2013, driven by a 1-2 per cent rise in steel shipments, an approximate 20 per cent increase in marketable iron ore shipments and the realised benefits from Asset Optimisation and Management Gains initiatives.

"Nevertheless, due largely to lower than forecast apparent demand and lower than anticipated raw material prices, the company now expects to report 2013 EBITDA greater than USD 6.5 billion," it said.

However, due to an expected investment in working capital and payment of the annual dividend, net debt of the company was expected to increase in H2, 2013 to approximately USD 17 billion.

It expects USD 3.7 billion capital expenditures for the current year.

First Published: Thursday, August 01, 2013 02:51 PM
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