Posted on 30 Apr 2009
ArcelorMittal, the world’s largest steelmaker, slumped more than expected in the first quarter as demand collapsed, and the prospect of a second-quarter uptick was not enough to halt a slide in its shares.
The much-watched EBITDA (earnings before interest, tax, depreciation and amortisation) dropped 82% to US$883mil in the January–March period.
ArcelorMittal had forecast a figure of about US$1bil, with a 15% variation, due to final-quarter price cuts of up to 40% and nearly halved output as key motor vehicle and construction markets fell into crisis.
It forecast production would remain at around 50% of capacity in the second quarter.
The World Steel Association forecast on Monday that steel demand would tumble 15% this year, its steepest fall since World War II, and one exacerbated by consumer de-stocking. US vehicle sales slid 37% in March and home sales a month-on-month 0.6%.
ArcelorMittal forecast core profit in the second quarter would recover to some US$1.2bil to US$1.5bil. It had previously seen the first quarter as the low point in terms of profitability.
It made a net loss in the first quarter of US$1.1bil due in part to US$1.2bil of pre-tax exceptional charges, mainly for writing down inventories. In the fourth quarter, it booked exceptionals of US$4.4bil.
The company also said it saw potential for price increases during the second and third quarters across major markets and products, although in a presentation it said that it expected a lower average steel price.
