ArcelorMittal reports first quarter net loss of $728 million

ArcelorMittal, the world's leading integrated steel and mining company, today reported a net loss of $728 million for the first quarter of the current year (January-March 2015) compared to a net loss of $205 million in the similar quarter of 2014. The decline in profitability was in part driven by forex valuations, the company said.

ArcelorMittal, controlled by NRI billionaire Lakshmi Mittal, said earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at $1.4 billion during Q1 of 2015 (including $0.1 billion onerous contract provision) against $1.8 billion in Q1 of 2014.

Despite significant forex headwinds, underlying steel-only EBITDA remained stable compared to the first quarter of 2014, ArcelorMittal stated.

Net sales fell 13.5 per cent to $17.12 billion during January-March from $19.79 billion in the same quarter last fiscal.

''We faced a number of headwinds, including a declining iron-ore price, stronger dollar and surge of imports in the US,'' chairman and CEO Lakshmi Mittal said.

The performance in Europe was of particular note, with EBITDA improving 15 per cent year-on-year, he added.

The company accounts for around 6 per cent of global steel output.

''We are focused on achieving a 15 per cent reduction in mining costs and improving the competitive position of our US operations,'' Mittal said.

On outlook, ArcelorMittal said: ''Due to foreign exchange movements as well as the postponement of some investment projects the company has further reduced the FY15 capital expenditure budget to about $3 billion.''

ArcelorMittal continues to expect positive free cash flow in 2015 and to achieve the medium-term net debt target of $15 billion. The company expects net interest expense of around $1.4 billion in 2015, it added.

Steel shipments stood at 21.6 million tonnes, an increase of 3 per cent compared with 21 million tonnes in Q1 of 2014. Iron ore production rose 5 per cent to 15.6 million tonnes in March quarter from 14.8 million tonnes in 2014 and of this 9.4 million tonnes was shipped and reported at market prices compared with 9.3 million tonnes last year.

ArcelorMittal's net debt stood at $16.6 billion as of March 31 compared with $18.5 billion in 2014.