Arcelor Mittal posts seventh quarterly loss in a row
10 May 2014
ArcelorMittal, the world's biggest steelmaker, posted its seventh straight quarterly loss yesterday, blaming it mainly on higher natural-gas prices and the harsh US winter that delayed shipments, The Wall Street Journal reported.
According to the Luxembourg-based company, demand was finally firming in Europe but declining in the former Soviet Union due to the crisis in Ukraine, where it owned one of the world's largest steel-making complexes.
It pared its 2014 growth estimate for global steel demand to between 3 per cent and 3.5 per cent, from 3.5 per cent to 4 per cent, reflecting a construction slowdown in China.
ArcelorMittal, which made more steel than its top two competitors combined and accounted for about 6 per cent of the world's steel output, reported a first-quarter loss of $205 million, or 12 cents a share, as against a loss of $345 million, or 21 cents a share, a year earlier.
According to chief executive Lakshmi Mittal who was spoke in an interview, steel demand in Russia and other former parts of the Soviet Union would fall by 2 per cent this year instead of growing by 2.5 per cent, its previous projection.
ArcelorMittal paid $5 billion in 2005 for buying the largest steel plant in Ukraine, employing 37,000 people.
ArcelorMittal itself, which sold over 85 per cent of its steel in Europe and the Americas, retained its own forecast of a core profit of some $8.0 billion in 2014, up from $6.9 billion in 2013, Reuters reported.
The company said this was based on a 3 per cent rise in steel shipments, a 15 per cent increase in shipments of iron ore, a moderate improvement in steel margins as also average ore prices of about $120 per ton, that had fallen to about $106 by the start of this month.
ArcelorMittal, which is over double the size of its nearest rival, reported first-quarter core profit at $1.75 billion.
According to the company, its steel earnings per tonne, stood higher in every segment apart from North America.
According to Mittal, the year-on-year improvement came as a result of recovering steel markets, the expansion of its mining operations and benefits of cost controls.
"The prospects for growth of our core markets in Europe and the U.S. are encouraging and overall we remain cautiously optimistic about the business outlook for the rest of 2014," he said in a statement.