As demand picks up after the second-quarter recession, ArcelorMittal (MT) posts better-than – expected quarterly results. The world’s number one steel group reported an EBITDA of $901 million, down 15 percent, on sales of $13.27 billion in the three months ended September. The consensus for EBITDA was $832.4 million while it was $12.8 billion for the sales in reported quarter. Compared to an operating profit of $297 million a year ago, operating profit in the second quarter remained $718 million. But net profit still down trend at $262 million compared to net profit of $539 million a year earlier. Company succeeded to reduce its net debt from $7 billion to $900 million.
The company points out that, with higher iron ore prices and higher production, its mining sector performed much better than in the previous quarter. It now expects iron ore exports sold at market rates to be about the same as in 2019. It had previously predicted a 5 percent decrease.
ArcelorMittal started restarting some of its unused capacity, while demand remained below average, adding to the uncertainty with a second wave of COVID-19. CEO Lakshmi Mittal states that the steel markets have improved from a very difficult second quarter, with profits in Brazil and its unit comprising South Africa, Kazakhstan and Ukraine improving significantly. The recent rise in worldwide COVID-19 cases leads the community to remain pessimistic about the outlook and is expecting greater volatility in times ahead.
In order to protect profitability while adjusting to changing demand, the organization continues to concentrate on cost-cutting measures.ArcelorMittal, which has now reached its deleveraging goal, says the aim of the firm will now be to return cash to shareholders in terms of capital allocation. The phase started with a $500 million share repurchase program that was launched following ArcelorMittal USA’s reported sale.