New Delhi/London: The world’s largest steelmaker ArcelorMittal on Friday reported a net profit of $1 billion for the quarter ended 31 March 2017 but reported a rise in net debt to $12.1 billion during the period.
The firm, led by billionaire Lakshmi N Mittal, had posted a net loss of $416 million in the year-ago period, it said in a filing.
Sales of the steel giant rose 20.08% to $16.08 billion in January-March period from $13.39 billion in the corresponding period last year.
The Luxembourg-based firm, however, reported a higher net debt of $12.1 billion, which it attributed to “seasonal working capital investment of $2.2 billion” as against $11.1 billion on 31 December 2016. ArcelorMittal’s chairman and CEO lakshmi Mittal said: “I am satisfied with the first quarter results, which reflect the anticipated positive momentum in the market and the progress we are making internally to make the business stronger.”
He said that all parts of the business reported improved Ebitda as steel prices responded to higher raw material costs and strong volume growth saw steel shipments increase by 5.1% compared to the preceding fourth quarter.
“Our mining segment benefited from an increase in iron- ore shipped at market prices as well as the higher raw material price environment. Looking ahead, we expect market conditions to be broadly stable in the second quarter. While this is encouraging, the steel industry is still impacted by unfair imports in many of our key markets and we hope to see further progress in ensuring the necessary trade solutions,” he said.
Commenting on the Action Plan 2020, the company said it is progressing on track as per expectations. ArcelorMittal also reported steel shipments of 21.1 million tonnes (MT) in the first quarter of 2017, marginally lower from 21.5 MT in the year-ago period. Iron ore shipments at market price in January-March rose to 8.7 MT from 7.8 MT in the same period last year.
Crude steel production rose to 23.6 MT during the quarter under review from 23.2 MT in the year-ago period. On outlook, the firm said: “We still expect global apparent steel consumption (ASC) to grow further in 2017 by between +0.5% and +1.5% as compared to +1% expansion in ASC in 2016.”
The company said that during the first quarter of 2017, it invested $2.2 billion in operating working capital reflecting seasonal increases in inventory and receivables as well as the effects of higher raw material and steel prices.
With annual achievable production capacity of approximately 114 million tonnes of crude steel, and some 210,000 employees across 60 countries, ArcelorMittal is the world’s leading steel and mining company.