ArcelorMittal Cuts Annual Profit Forecast

(RTTNews) - Steel giant ArcelorMittal (MT) Thursday reported decreased earnings before interest, taxes, depreciation and amortization or EBITDA in the second quarter. Citing lower than forecast apparent demand and lower than expected raw material prices, the company also cut its fiscal year 2013 forecast for EBITDA.

Primarily for the higher charges and lower sales due to decline in steel shipments, the company reported net loss for the period, compared with profit last year.

Lakshmi Mittal, ArcelorMittal Chairman and CEO, said, "Although we have revised our full year guidance, the second half should deliver a clear underlying improvement relative to the second half of 2012, which we believe marked the lowest point in the cycle."

EBITDA for the quarter decreased to $1.70 billion from $2.56 billion.

Net loss for the three-month period was $780 million or $0.44 per basic share, compared to profit of $1.02 billion or $0.66 per basic share last year.

The latest quarter results included impairment charges of $39 million, and restructuring charges of $173 million, while last year's restructuring charges were $190 million.

Sales also declined 10.1 percent to $20.20 billion from $22.48 billion in the prior year. Sequentially, sales grew 2.3 percent primarily due to higher steel shipment volumes.

Total shipments of steel products in the second quarter fell to 21.3 million metric tonnes from 21.7 million metric tonnes last year.

Crude steel production edged down to 22.5 million metric tonnes from 22.8 million metric tonnes a year ago, while own iron ore production increased 3.8 percent to 15 million metric tonnes.

For fiscal 2013, ArcelorMittal now expects to report 2013 EBITDA greater than $6.5 billion.

The company said in May that it expects to report EBITDA above $7.1 billion, assuming that iron ore prices and the margin of steel prices over raw material costs in 2013 are similar to that in 2012.

In line with its guidance framework, the company still expects underlying profitability to improve in 2013, driven by a 1 percent to 2 percent increase in steel shipments, an approximate 20 percent increase in marketable iron ore shipments as well as the realized benefits from Asset Optimization and Management Gains initiatives.

Due to an expected investment in working capital and the payment of the annual dividend, net debt is expected to increase in the second half to about $17 billion. The $15 billion medium term net debt target remains unchanged. For the year, capital expenditures are now expected to be approximately $3.7 billion

On the NYSE, ArcelorMittal shares closed Wednesday's trading at $12.97, down $0.11 or 0.84 percent. In the extended trading, shares gained 0.31 percent to $13.01.