ArcelorMittal posts $1.07 billion Q4 profit
ArcelorMittal SA, the world's largest steel maker, on Wednesday posted a fourth quarter profit of $1.07 billion and said it sees steel demand strengthening after a sluggish year. The company made a profit of just $118 million for all of 2009, compared to a $9.4 billion profit a year earlier.business Updated: Feb 10, 2010 12:53 IST
ArcelorMittal SA, the world's largest steel maker, on Wednesday posted a fourth quarter profit of $1.07 billion and said it sees steel demand strengthening after a sluggish year. The company made a profit of just $118 million for all of 2009, compared to a $9.4 billion profit a year earlier.
The fourth quarter profit of $1.07 billion in the last three months of 2009, was higher than a third quarter profit figure of $903 million and well above a $2.6 billion loss in 2008's fourth quarter.
ArcelorMittal says it sees steel demand picking up - with first quarter shipments outpacing the fourth quarter - but warned that this will be offset by lower selling prices and higher costs. The company also expects its net debt to increase during the first quarter.
CEO Lakshmi Mittal said the company had reduced "its cost base substantially" over the last year. The company outpaced a savings target of $2 billion, by shaving some $2.7 billion from running costs.
"We therefore start the year in a good position to benefit from the progressive, albeit slow, recovery that is underway," Mittal said.
He said the company plans to increase capital spending this year to snatch selected growth opportunities as demand improves. ArcelorMittal suffered three consecutive quarterly losses before returning to profit in the third quarter last year. The company blamed lower selling prices and weak demand for the steel used for cars, machinery and buildings for poor profits last year.
Prices were down by more than a quarter.
Its sales nearly halved from $65 billion during last year's recession, down 48 percent from $124.9 billion in 2008. The company also took a one-time charge of $2.4 billion for writing down the value of steel stocks and paying worker severance.
This was partially offset by some gains from lower-than-expected legal costs and the sale of unused permits for the EU's cap-and-trade program.
ArcelorMittal produced some 6 percent of world steel in 2009 - down from its usual share of 10 percent.