World Economy

ArcelorMittal Profit Down 33%

ArcelorMittal Profit Down 33%ArcelorMittal Profit Down 33%

Steel giant ArcelorMittal reported that its net loss for the first-quarter of 2016 narrowed to $416 million or $0.23 per share from $728 million or $0.41 per share in the first-quarter of 2015. But adjusted net loss widened to $176 million from $36 million in the prior year.

Earnings before interest, taxes, depreciation and amortization in the three months ended March 31 fell to $927 million from $1.38 billion a year earlier, the Luxembourg-based company said in a statement Friday. That was in line with the $924.5 million average of 14 analyst estimates compiled by Bloomberg.

ArcelorMittal expects full-year Ebitda to be more than $4.5 billion.

Steelmakers have been hurt by top supplier China exporting record amounts of material as its own economy slows, undercutting prices in Europe and the US cheaper iron ore, used to make steel, also pulled down prices. ArcelorMittal was forced to raise $3 billion from investors earlier this year as it sought to weather the crisis and cut debt.

“Our results for the first quarter reflect the very tough operating conditions in the second half of 2015,” Chief Executive Officer Lakshmi Mittal said in the statement. ”Since that time, we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters.”

  Shares Climb

The company, which supplied steel for New York’s One World Trade Center and London’s Wembley stadium, has also scrapped its dividend, cut expansion plans and shuttered plants.

Steel and iron-ore prices have recovered in recent months, helping ArcelorMittal’s shares climb 55% this year. The stock slid 57% last year, the most since the global financial crisis in 2008. The company said it expects to see the impact of these gains in the second half of the year.

ArcelorMittal reported sales of $13.4 billion in the first quarter, 22% lower than a year earlier. Steel shipments were flat at 21.5 million tons while it mined 14.1 million tons of iron ore, 9.6% less than the same period in 2015.

ArcelorMittal twice reduced its profit forecast last year as China’s exports undercut steel prices in Europe and the US, its biggest markets. Steel prices in Europe reached the lowest in at least nine years in February and the average in the first quarter was down 37% from a year earlier, according to Metal Bulletin Ltd. Iron ore, used in blast furnaces to fashion the alloy, was 22% cheaper.