ArcelorMittal 3Q Profit Missed Views as Shipments Fell, Energy Costs Hit -- Update
By Pierre Bertrand
ArcelorMittal on Thursday reported third-quarter net income that
missed expectations as market conditions deteriorated, marked by
lower shipments and higher energy costs.
The Luxembourg-based steelmaker said net income dropped by 78%
to $993 million from $4.62 billion for the prior-year period, on
sales that declined to $18.98 billion from $20.23 billion in the
third quarter of 2021.
Earnings before interest, taxes, depreciation and amortization
fell to $2.66 billion from $6.06 billion a year earlier.
The result missed analysts' expectations of net income at $1.35
billion but beat expectations for Ebitda of $2.34 billion,
according to consensus expectations provided by the company.
ArcelorMittal said its result reflected lower average
steel-selling prices, lower volumes, higher energy costs, customer
destocking and added that the economic outlook for the industry in
the short term remains uncertain.
Quarterly steel shipments were 13.6 million metric tons, down
5.6% from the second quarter of 2022, largely due to weaker demand
The company said it has adapted its capacity for the fourth
quarter to mitigate the effects of weak demand and higher energy
costs in Europe.
Production curtailments started in the fourth quarter are in
effect in France, Spain, Germany and Poland to balance supply and
demand, ArcelorMittal said.
The company said it expects to be able to mitigate the costs of
idled production capacity in the fourth quarter in part by
implementing reduced working hours.
In Europe, inflation headwinds are slowing growth and the effect
of destocking is expected to cause apparent consumption to contract
by up to 7% in 2022.
"Apparent demand conditions are expected to improve once the
current destocking phase reaches maturity," ArcelorMittal said,
adding that variable costs per ton for raw materials and energy are
expected to decline in the fourth quarter.
Write to Pierre Bertrand at firstname.lastname@example.org
(END) Dow Jones Newswires
November 10, 2022 04:26 ET (09:26 GMT)
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