London: Non-resident Indian (NRI) business tycoon Lakshmi Mittal-led Mittal Steel today reported a 43.7% increase in its first quarter net profit, while beating its own forecast due to accelerated synergy generation from its $38 billion (Rs1,55,226 crore) takeover of Arcelor last year.
The world’s largest steel maker, to be renamed Arcelor Mittal after completion of merger process later this year, said its net income rose to $2.3 billion in the quarter ended 31 March, from $1.6 billion in the year-ago period.
Mittal Steel said in a separate statement that the two companies are actively working to complete the merger process as promptly as possible in the course of 2007.
It said that the integration process was going as per the plans and synergies worth $573 million were captured in the first quarter.
Arcelor Mittal President and CEO Lakshmi N. Mittal said in a statement: “These results reflect the strength of Arcelor Mittal’s global business model and the continuing strong demand for steel generally.
“The benefits of combining Arcelor and Mittal Steel continue to outperform our expectations and we are on track to deliver synergies as planned,” he added.
The company’s sales and operating income rose to $24.5 billion and $3.5 billion, respectively, from $20.9 billion and $2.5 billion in the year-ago period.
The results included the collective quarterly figures for both Mittal Steel and Arcelor.
Under the proposed scheme of arrangement, Mittal Steel would be first merged with its Luxembourg-based wholly-owned subsidiary ArcelorMittal, which would be subsequently merged into Arcelor.
The combined company would be renamed ArcelorMittal upon completion of the merger.
“ArcelorMittal and Arcelor will sign a merger agreement shortly,” the company said.
Shares of Arcelor Mittal have jumped nearly 40% since the beginning of this year, pushing the company’s market value to over $80 billion.