ArcelorMittal (MT), the largest steelmaker on the globe, projects that its profit will probably increase by 16% during 2014 on recovering demand for steel in the United States and Europe. Companys earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to increase to 8 billion USD during this year, while the indicator reached 6.9 billion USD in 2013. A major factor behind this forecast has been the expansion in steel and iron ore production. ArcelorMittal said its profit rose 23% during the final quarter of 2013.
Steelmakers EBITDA reached 1.91 billion USD in the last quarter of 2013, improving from 1.56 billion USD in Q4 2012. The median estimate of 17 experts participated in a survey by Bloomberg News showed the indicator will reach 1.81 billion USD in Q4.
The company is trying to recover from an industry bottom, as waning demand and excess capacity pressured profit margins among producers in the sector. ArcelorMittal said in November that the worst of the economic cycle had passed, while expressing optimism regarding global recovery.
According to the steelmaker, the use of this metal worldwide is expected to increase by 3.5% to 4% in the current year, while steel shipments are to rise 3%. Shipments came at a total of 84.3 million tons in 2013. At the same time, production of iron ore will probably expand by 15%.
Demand for steel in Europe will probably increase 2.5% this year, forecasts show, following the drop in 2013. Consumption of the metal is to climb 4.5% in both the United States and China, while Brazil is projected to use 3% more steel during the same period.
The company expects a moderate margin gains in the steel industry during 2014 due to the combination of decreasing prices of raw materials and increasing steel volumes.
ArcelorMittal has cut costs and closed plants because of the earlier drop in demand. The steelmaker has reduced its debt by over 5 billion USD during the past 2 years and terminated operations at Liege in Belgium and Florange in France. Companys net debt diminished to 16.1 billion USD during the fourth quarter of 2013, its statement revealed. ArcelorMittal left unchanged its medium-term debt target at 15 billion USD.
Plants, operating in East Europe, which had been rumoured to close, may continue their operations, as demand showed signs of improvement.
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