ArcelorMittal in Line With Estimates, Sees Better First Half

ArcelorMittal, the world’s biggest steelmaker, posted fourth-quarter profit that was in line with analyst estimates and forecast an improvement in the first half.

Earnings before interest, tax, depreciation and amortization fell to $1.71 billion from $1.85 billion a year earlier, compared with the $1.68 billion median estimate of 16 analysts surveyed by Bloomberg. First-half Ebitda is likely to exceed results in the prior six months, while still being lower than a year earlier, the company said today in a statement.

“Looking ahead to 2012, the situation in Europe remains a live concern,” Chief Executive Officer Lakshmi Mittal said in the statement. “Despite the continued uncertainty in this market, however, we are seeing an improvement in sentiment compared with the fourth quarter.”

ArcelorMittal (MT)’s guidance implies first-half Ebitda of $4.1 billion to $6 billion. The shares rose 3.3 percent to 16.69 euros at the close in Amsterdam.

The company posted its lowest quarterly profit in two years as cooling economies in China and Europe sapped demand for steel, sending prices lower. Nippon Steel Corp., Japan’s largest producer, reported its first loss in three quarters last month and forecast declining use of the alloy.

Prices Decline

Prices for hot-rolled steel coil, a benchmark product used in vehicles and buildings, have fallen for three straight quarters and slumped to the lowest in 13 months in December, according to Steel Business Briefing’s global price index.

ArcelorMittal has “temporarily suspended” an increase in steel capital spending to focus its projected $4 billion to $4.5 billion of investment in 2012 on mining growth. The company has put two steel-plant expansions in Brazil on hold because of a “strong” Brazilian currency and weaker growth than forecast, Chief Financial Officer Aditya Mittal said today on a conference call. The company also delayed an expansion at its Canada unit.

Global steel consumption will rise 4.5 percent this year, less than the 5.4 percent forecast in October by the World Steel Association, according to the median estimate of 14 steelmakers, analysts and traders surveyed by Bloomberg. Growth may be as low as 1.2 percent, Bloomberg Industries analysis shows.

China Vs Europe

ArcelorMittal said steel demand growth may slow to as little as 4.5 percent in 2012 from 6.3 percent in 2011. Chinese consumption is likely to rise at 5.2 percent, while European demand is forecast to decline by 1.3 percent in 2012, he said.

Photographer: Peter Foley/Bloomberg

Lakshmi Mittal, chief executive officer of ArcelorMittal. Close

Lakshmi Mittal, chief executive officer of ArcelorMittal.

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Photographer: Peter Foley/Bloomberg

Lakshmi Mittal, chief executive officer of ArcelorMittal.

Europe is in a “recessionary environment,” he said. “We expect overall apparent demand to be down due to the recessionary macroeconomic situation.”

Steel shipments fell 2.4 percent in the fourth quarter from the prior three months to 20.6 million metric tons. First-half shipments will be similar to those a year earlier, while mining volumes will exceed those in the comparable period, ArcelorMittal said.

Net debt fell by $2.4 billion in the fourth quarter to $22.5 billion. A further reduction is anticipated from “non- core” asset sales, it said.

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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