ArcelorMittal reports first quarter net loss of $345 mn

ArcelorMittal, the world's largest steel maker, today reported a net loss of $ 345 million for the first quarter of 2013 ended 31 March, against a net profit of $92 million in the corresponding quarter of 2012, which was due to a tax windfall of $ 176 million.

The company, however managed to get its debt reduced by $3.8 billion to $18 billion as of 31 March 2013, as a result of debt restructuring.

ArcelorMittal said its earnings before interest, taxes, depreciation and amortisation (EBITDA) also declined by 26.11 per cent to $1.565 billion during the quarter, while sales were down 13 per cent at $19.752 billion.

Steel shipments during the January-March 2013 quarter rose 4.7 per cent to 20.9 million tonnes compared to the previous quarter (October-December 2012) while production of iron ore stood at 13.1 million tonnes, of which shipments at market prices included 7.3 million tonnes during the January-March 2013 quarter against the 6.8 million tonnes of iron ore shipped during Q1 of 2012.

Shipments of finished steel, however, declined by 5.86 per cent on a year-on-year basis.

Besides, crude steel production declined 1.75 per cent to 22.4 million tonnes, while iron ore production was down 0.76 per cent to 13.1 million tonnes during the quarter.

''Economic conditions remain challenging but our performance in the quarter reflects the results of the management action we have taken to confront the effects of the financial crisis.

''We have significantly reduced our net debt and the steps we have taken to focus production on our more competitive assets are beginning to yield results,'' ArcelorMittal CEO Lakshmi Mittal said.

Net debt of the company decreased by $3.8 billion during to $18 billion as of 31 March 2013 due largely to proceeds from combined offering ($4 billion) and proceeds from the first tranche of AMMC 15 per cent stake sale ($0.8 billion), which was partially offset by working capital investment ($0.5 billion)

Liquidity also improved to $18 billion from $14.5 billion at end 4Q 2012; average debt maturity of 6 years. The company also reported $0.2 billion gains from better resource management during 1Q of 2013, following implementation of the new plan to achieve $3 billion of improvement by the end of 2015.

''EBITDA in second quarter of 2013 is expected to be above first quarter levels. Together with an anticipated release of working capital and receipt of previously announced disposal proceeds, this should support a further reduction in net debt to approximately $ 17 billion by end June 2013,'' the company said in its outlook.

ArcelorMittal also reiterated its guidance of achieving an EBITDA of $ 7.1 billion during the year, assuming that the margin of steel, prices over iron ore and other raw material costs would remain similar to the levels of 2012.

Steel shipments are expected to increase 2 per cent and iron ore shipments by 20 per cent during the year.

The company has kept a capital expenditure target of $ 3.5 billion and is targeting to increase production of iron ore from its Canadian mines to 24 million tonnes from the current 16 million tonnes by June this year.

It also hopes to gain $3 billion by 2015-end through cost cutting measures and realised $ 0.2 billion in the first quarter ended March 2013.