Mumbai: Arcelor Mittal, the world`s largest steelmaker, reported second-quarter net profit of $2.7 billion, or $1.97 a share, on the back of strong demand and higher selling prices for steel. That compares with $1.82 billion, or $1.31 a share, based on figures Arcelor Mittal calculated as if it had existed a year earlier.

Net profit rose about 50 per cent to $2.723 billion on an increase in sales of over 20 per cent at $27.223 billion, the Luxembourg-based company said in a statement.

Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $5.326 billion from a pro-forma $3.5 billion a year ago.

The steel group, formed last year Mittal Steel`s takeover of its nearest rival Arcelor, also more than delivered promised synergies of $973 million by June 30, ahead of its previous target of $830 million.

The steel giant also said that it would achieve more savings than its $1.8 billion target by the end of 2008 but declined to give a precise figure.

Artcelor Mittal set an EBITDA target of between $4.7 billion and $4.9 billion for the third quarter of the year and said it anticipated "a robust end to the year".

Quarter on quarter operations improved in all business segments except in stainless steel where the operating result declined due to a write-down in the value of inventory, as a result of the recent decline in nickel prices.

The company stuck to its objective of finalising the legal merger by the end of the year and said it had made "excellent progress in effecting a successful integration" of the former rivals.

Minority shareholders in Arcelor, representing 6 per cent of the company, remain opposed to the current buy-out terms. Arcelor Mittal is offering eight Arcelor Mittal shares for every seven held in Arcelor, well below the 11-for-seven offer that other investors accepted last year.

Shares of Arcelor Mittal rose 56 cents, or 1.2 per cent, to 46.30 euros ($63.40) as of 2:24 p.m. in Amsterdam. They have gained 45 per cent this year, giving the company a market value of 65.7 billion euros.