ArcelorMittal Reports Profit In Q2, Cuts FY14 EBITDA Outlook

(RTTNews) - Steel giant ArcelorMittal (MT) Friday reported a profit for the second quarter, compared to a loss last year, amid a marginal growth in sales. The company, however, lowered its outlook for Earnings Before Interest, Tax, Depreciation and Amortization, citing lower than expected iron ore prices.

Net income attributable to equityholders of the parent was $52 million or $0.03 per share, compared to a loss of $780 million or $0.44 per share last year.

Earnings Before Interest, Tax, Depreciation and Amortization or EBITDA was $1.763 billion, compared with $1.700 billion last year. EBITDA margin was 8.5 percent in comparison with 8.4 percent last year.

Sales for the quarter grew to $20.704 billion from $20.197 billion in the prior year, amid improved steel shipments and higher marketable iron ore shipments.

Steel shipments were 21.5 million metric tons, up from 20.9 million metric tons last year.

Own iron ore production rose nearly 11 percent to 16.6 million metric tonnes.

Lakshmi Mittal, ArcelorMittal Chairman and CEO, said:, "The second quarter and first half results reflect the anticipated improvement in steel shipments and margins, supporting an underlying EBITDA improvement compared with last year.''

In the NAFTA segment, which includes the Flat, Long and Tubular operations of USA, Canada and Mexico, sales in NAFTA increased 13 percent to $5.4 billion, but EBITDA decreased by 7.2 percent.

In the Brazil segment, sales declined to $2.431 billion from $2.618 billion, and EBITDA fell 22.3 percent, primarily due to lower steel shipment volumes and additional costs.

Sales were marginally lower in Europe at $10.518 billion, but EBITDA climbed 40.6 percent, primarily reflecting improved market conditions and the realized benefits of cost optimization efforts.

Looking ahead, the firm said its previously announced 2014 guidance framework remains valid.

However, the iron ore price has been lower than expected and this underlying assumption has been adjusted to $105 per ton for the full year 2014 from $120 per ton previously, implying a second-half average of $100 per ton. All other components of the framework remain unchanged.

As a result, the company now expects 2014 EBITDA in excess of $7.0 billion. This assumes steel shipments increase by approximately 3 percent from last year. In May, the company had projected EBITDA to be around $8.0 billion for 2014, assuming Steel shipments growth of nearly 3 percent in 2014.

ArcelorMittal today maintained its medium term net debt target of $15 billion.

MT closed down 2.3 percent on Thursday on the NYSE at $15.21.