ArcelorMittal SA, the world’s largest steel maker, posted a fourth quarter profit of $1.07 billion and said it expects demand to strengthen this year.
Steel buyers worldwide are set to increase purchases by 10 percent this year, said Aditya Mittal, the company’s chief financial officer, as manufacturers in developed and emerging markets use up excess stocks.
ArcelorMittal has been hit hard by the recent steel slump. The profit 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. Still, the company made a profit of just $118 million for all of 2009, compared to a $9.4 billion profit a year earlier.
ArcelorMittal says demand is already picking up — with first quarter shipments outpacing the fourth quarter — but warned that this will be offset by lower selling prices and higher costs for iron ore and coking coal. Net debt will increase during the first quarter, it warned.
Mittal said the company would hike prices going forward but was still feeling the pain of fulfilling orders made when prices were lower late last year.
He said ArcelorMittal will refocus from paying off debt to investing in its business, seeking growth opportunities in India and Brazil. It has some $4 billion to spend on new projects this year.
Mittal said the company sees demand in developed countries — the United States, Germany and Japan — growing 15 percent from a very low level. Emerging markets such as Brazil will also grow 15 percent — except for China, where demand will grow at a steadier 5 percent. China did not experience the same deep downturn seen in the rest of the world.
ArcelorMittal said in a statement that substantial cost cuts last year had left it in a good position for a slow recovery this year. It outpaced a savings target of $2 billion, by shaving some $2.7 billion from running costs this year. It is aiming for total savings of $5 billion by the end of 2010.
ArcelorMittal suffered three consecutive quarterly losses before returning to profit in the third quarter last year.
Steel buyers worldwide are set to increase purchases by 10 percent this year, said Aditya Mittal, the company’s chief financial officer, as manufacturers in developed and emerging markets use up excess stocks.
ArcelorMittal has been hit hard by the recent steel slump.
The profit 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. Still, the company made a profit of just $118 million for all of 2009, compared to a $9.4 billion profit a year earlier.
ArcelorMittal says demand is already picking up — with first quarter shipments outpacing the fourth quarter — but warned that this will be offset by lower selling prices and higher costs for iron ore and coking coal. Net debt will increase during the first quarter, it warned.
Mittal said the company would hike prices going forward but was still feeling the pain of fulfilling orders made when prices were lower late last year.
He said ArcelorMittal will refocus from paying off debt to investing in its business, seeking growth opportunities in India and Brazil. It has some $4 billion to spend on new projects this year.
Mittal said the company sees demand in developed countries — the United States, Germany and Japan — growing 15 percent from a very low level. Emerging markets such as Brazil will also grow 15 percent — except for China, where demand will grow at a steadier 5 percent. China did not experience the same deep downturn seen in the rest of the world.
ArcelorMittal said in a statement that substantial cost cuts last year had left it in a good position for a slow recovery this year. It outpaced a savings target of $2 billion, by shaving some $2.7 billion from running costs this year. It is aiming for total savings of $5 billion by the end of 2010.
ArcelorMittal suffered three consecutive quarterly losses before returning to profit in the third quarter last year.
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