ArcelorMittal returns to profit

ArcelorMittal, the world's largest steelmaker, reported a net profit of $679 million for the three months ended 31 March 2010, compared with a net loss of $1.06 billion in the same period last year.

The Luxembourg-based steelmaker, which cut back on production and idled plants in the wake of a global slump in demand for steel, saw its first profit with the global economy recovering and demand improving in all main markets.

Sales for the January-March period were $18.7 billion compared with $18.6 billion for the three months ended 31 December 2009, up 23 per cent as compared with $15.1 billion for the same period last year.

Sales were marginally higher during the first quarter of 2010 compared to the fourth quarter of 2009, due to higher volumes, but offset by lower average steel prices, said the steel maker.

ArcelorMittal's net debt increased by $1.9 billion to $20.7 billion in the first quarter due to investment in working capital and M&A activity, and the company expects it to rise further in the three months to 30 June.

Capacity utilisation increased marginally to 72 per cent in Q1 2010 from 70 per cent in Q4 2009. The company achieved $2.9 billion in annual cost reductions by the end of first quarter of 2010 and is on track to achieve its goal of $5.0 billion by 2012.