The largest steel producer by shipments in the world – ArcelorMittal reported a second straight quarter of profit. The result is believed to be due to a considerably better performance of the companys steel business, which helped ArcelorMittal neutralize the negative influence of falling iron ore prices. Apart from reporting quarterly results, the company reaffirmed its full-year profit forecast.
“Europe has delivered another strong quarter, reflecting improved market conditions and the benefits of the optimization efforts. Based on today’s market conditions, I do not foresee a deterioration in our performance in the fourth quarter” said CEO Lakshmi Mittal.
ArcelorMittal stated a net profit of $22 million in the third fiscal quarter, versus a net loss of $193 million a year earlier, but worse than its Q2 performance of $52 million.
Revenue increased 2.2% to $20.1 billion in the recent quarter. Earnings before interest, taxes, depreciation and amortization increased by 11% to $1.91 billion. This result surpassed analysts outlooks of $1.81 billion. The companys net debt slightly increased over the period from $17.4 billion to $17.8 billion due to working capital investments.
“The performance of the global economy is diverging. We see strong continuing growth in the U.S., while Europe is slightly weaker. Demand in China continues to slow.” said CFO Aditya Mittal in an interview cited by Bloomberg.
ArcelorMittal also confirmed its full-year EBITDA forecast, and said it is on track with its target to reach more than $7 billion in earnings before interest, taxes, depreciation and amortization as its steel business offsets the negative impact of falling iron ore prices. The company boosted its consumption target to 8.75%, from the previous forecast of around 5%.
However, ArcelorMittal reduced its projection of global growth demand to range between 2.25% to 3% amid weakness in Europe, China and Brazil, which is expected to return to growth in 2015.
The companys European unit reported operating income of $166 million in the recent quarter, up from a loss of $184 million an year earlier. The division stated a third back-to-back profit, following six quarters of losses.
ArcelorMittal gained 0.38% on Thursday and closed at €9.88 in Amsterdam. On Friday the stock gained 2.32% to close at €10.11, marking a one-year decrease of 18.61%. The company is valued at €16.99 billion.
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