U.S. Revival
While iron ore weighs on its earnings, the company continues to see an improvement in the steel industry in the U.S. and Europe, its biggest markets. The company raised its forecast of demand growth in the U.S. to as much as 6 percent from an earlier forecast of 3.5 percent to 4.5 percent. It increased its expectations for European demand to rise as much as 4 percent from 2 percent to 3 percent.
ArcelorMittal has shuttered plants and fired workers as it seeks to emerge from an industry trough after dwindling demand and excess capacity shrunk profit margins.
“Indicators in both Europe and the U.S., which together account for two-thirds of our shipments, continue to be positive and we have increased our steel demand forecasts for both markets,” Mittal said.
The company, which sold 21.5 million tons of steel in the second quarter, maintained its forecast for shipments to climb 3 percent and iron-ore sales 15 percent this year. The company mined 16.6 million tons of iron ore in the quarter.
Belgium, France
The company, which reported Ebitda per ton of steel of $82 in the quarter, has a medium-term goal of $150 as it cuts costs and demand improves. The steelmaker has reduced $4.8 billion in costs since 2008 and targets a further $3 billion in savings by 2015. It has shrunk its workforce by more than 80,000 and closed plants in Belgium and France.
Net debt fell to $17.4 billion in the quarter, according to the statement. ArcelorMittal is trying to reduce its borrowings to about $15 billion after its credit rating was cut to below investment grade by Moody’s Investors Service, Standard & Poor’s Corp. and Fitch Ratings.
ArcelorMittal also said today that it had agreed to buy stakes held by BHP and Areva SA in the Nimba mine in Guinea, giving the steelmaker 56.5 percent ownership. The deal is subject to approval from the government of Guinea, said ArcelorMittal, which didn’t provide any valuation for the deal.
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