ArcelorMittal net income dips 51% in July-Sept qtr
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ArcelorMittal net income dips 51% in July-Sept qtr

Last Updated: Thursday, November 3, 2011, 17:31
 
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ArcelorMittal net income dips 51% in July-Sept qtr

London/New Delhi: The world's largest steel-maker ArcelorMittal on Thursday reported a dip of over 51 percent in net income to USD 659 million for the quarter ended September 30, 2011, due to rising raw material costs and a fall in demand for the alloy.
     
The company had reported a net income of USD 1.35 billion for the corresponding quarter of 2010.
     
"Steel shipments in the fourth quarter of 2011 are expected to be lower than third quarter, 2011, levels, reflecting customers' 'wait-and-see' approach," the Lakshmi Mittal-headed firm said in its guidance for the October-December period.
     
The core earnings (EBITDA) of the company registered a growth of 11.4 percent to  USD 2.4 billion during the quarter under review from USD 2.16 billion in the July September quarter last year, it said in a statement.
     
However, EBITDA (earnings before interest, taxes, depreciation and amortisation) margins of the company were in the lower range of its outlook for the July-September period, declining by 29.45 per cent vis-a-vis the previous quarter (April-June quarter of 2011).
     
The company, had given a guidance for an EBITDA margin of USD 2.4 and 2.8 billion for the July-September quarter. In the April-June quarter, its core earnings (EBITDA) stood at USD 3.14 billion.
     
Sales of the world's largest steel-maker rose by 22.64 percent Y-o-Y during the quarter to USD 24.21 billion, although on a Q-o-Q basis, they declined by 3.63 percent.
     
In the previous quarter, the company had reported sales of USD 25.13 billion, while in the July-September quarter of 2010, its sales amounted to USD 19.75 billion.
     
"Uncertainties around the economic outlook have increased in recent weeks, impacting the confidence levels of our customers, so as we move in to the Q4, we are facing both volume and price pressures," company chief Lakshmi Mittal said.
     
He also exuded confidence that ArcelorMittal's EBITDA margins in second half of 2011 will be higher than in the corresponding period of 2010.
     
Talking about growth in steel demand, Mittal said it is expected to slow down to 4.5-5 percent in 2012 from 7-7.5 percent growth this year due to the global economic situation.
     
The company statement also said ArcelorMittal's capital expenditure in 2011 is expected to be lower than the target of USD 5.5 billion.
     
The company has completed phase-I expansion of its iron ore mines in Liberia, which will take its total production of the raw material from the country to 4 million tonnes per annum in 2012.
     
The statement further said that expansion of its Quebec iron ore mines in Canada is also on track, which will result in an increase in production from 16 MTPA to 24 MTPA by 2013.

PTI




First Published: Thursday, November 3, 2011, 17:31


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