Humongous drop in ArcelorMittal income

World's largest steel producer ArcelorMittal's net income has plunged to USD 11 million in the first quarter of 2012, compared to USD 1.069 billion of the same period last year.

However, the results were better than the previous October-December quarter, when ArcelorMittal had reported a net loss of USD 1 billion.

Stating that demand in North America continues to grow, company Chairman and CEO Lakshmi Mittal said, "Europe remains the biggest challenge and during the first quarter we announced the extended idling of a number of facilities in line with our strategy of meeting demand from our more competitive sites."

He added that mining business will be the key growth driver and the company is targeting a further increase in its production in 2012.

Giving guidance for the quarter, the company said that it expects first half of the year to be better in terms of core profits (EBITDA) than USD 4.1 billion EBITDA (earning before income, tax, depreciation and amortisation) of the second half of 2011.

ArcelorMittal's sales, during the quarter, increased by 2.3 per cent to USD 22.7 billion vis-a-vis USD 22.2 billion of January-March period of 2011, primarily due to higher steel shipments at 22.2 million tonnes (MT).

The company said that "all steel segments are expected to show improved underlying profitability", although it expects steel shipments, in the current quarter, at similar levels of last quarter.

The Luxembourg-based steelmaker also said that its iron ore production was up 12.1 per cent to 13.2 MT in the January-March period and mining segment is expected to benefit from seasonally higher ore shipments.

Besides, it is also looking at increasing iron ore and coal production by 10 per cent in the current year.

During the quarter, company's net debt increased by USD 1.1 billion to USD 23.6 billion, largely due to decreased cash flow from operations, forex losses and dividend payment.

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