Highlights
- ArcelorMittal reports a £305m third-quarter net loss following charges linked to its idled Ukrainian plant.
- Underlying EBITDA reaches £1.58bn, beating analysts' expectations.
- Indian joint venture AMNS India reports a 23 per cent rise in quarterly earnings
ARCELORMITTAL chief executive Aditya Mittal has expressed confidence in the steelmaker's growth prospects despite a £305 million net loss in the third quarter, saying improvements in its operations and strategic investments are strengthening its long-term earnings potential.
The Luxembourg-based company, one of the world's largest steel and mining groups, reported a net loss of $391 million (£305m) for the three months to September, compared with a net profit of $377m (£294m) in the same period last year.
The loss included impairment and exceptional charges linked to the suspension of operations at its ArcelorMittal Kryvyi Rih steel plant in Ukraine following Russian attacks on industrial infrastructure.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) reached $2.02 billion (£1.58bn), exceeding the average analyst forecast of $1.96bn (£1.53bn).
Adjusted net income rose to $900 million (£702m), from $700m (£546m) in the previous quarter.
"Our third quarter performance provides further evidence of the structural improvement in ArcelorMittal's earnings capacity," Mittal said.
"We continue to generate healthy margins, with EBITDA per tonne of $155 (£121), $44 (£34) higher year-on-year, reflecting the benefits of the actions we have taken over several years to enhance our asset portfolio and invest in strategic growth."
Higher costs weigh on performance
Net sales increased to $16.47bn (£12.24bn), compared with $15.66bn (£11.64bn) a year earlier. Steel production also edged up to 13.7 million tonnes from 13.6 million tonnes.
The company said higher energy costs in Europe, weather-related disruption and lower prices in its mining business had affected performance during the quarter.
However, Mittal said there were encouraging signs of improvement.
"Higher energy costs in Europe are increasingly being reflected in steel pricing, and we expect our Liberian mining operation to reach nameplate capacity in the fourth quarter, supporting confidence in its future contribution," he said.
Reaching nameplate capacity means the mining operation is expected to achieve its designed production level.
European policy changes offer support
The chief executive also welcomed changes in European trade policy, particularly the introduction of the Carbon Border Adjustment Mechanism (CBAM) and the new tariff-rate quota (TRQ) framework.
He said the measures were creating a more balanced and sustainable operating environment for the European steel industry, helping improve capacity utilisation and profitability.
ArcelorMittal said all its European blast furnaces had returned to operation following the implementation of the new TRQ framework.
Aditya said it was important to maintain the momentum, including through further measures to address the impact of imports on steel-intensive downstream industries.
He expects the full benefits of changes in European policy to become apparent from next year.
"Looking ahead, we remain very positive. The full benefit of the changes taking place in Europe will be fully reflected from next year onwards," he said.
Growth projects underpin outlook
The company is also expecting a strong performance from its North American operations, with trade measures in Canada and Mexico pointing to improved business prospects.
Aditya said these investments provided a clear pathway to higher earnings and strengthened the group's confidence in its strategy.
"This further reinforces our confidence in our strategy and leaves us well positioned for further profitable growth and long-term value creation," he said.
ArcelorMittal's Indian joint venture, AMNS India, which it operates with Japan's Nippon Steel, also reported an improvement in quarterly operating earnings.
The venture recorded EBITDA of $266 million (£198m) in the July-September quarter, compared with $217m (£161m) in the corresponding period last year.
The suspension of operations at ArcelorMittal Kryvyi Rih in Ukraine remains a significant challenge for the group.
The plant halted production in September after repeated Russian attacks damaged infrastructure and raised concerns about the safety of workers and the surrounding facilities.
The company reported impairment charges of $852m (£633m) and exceptional charges of $293m (£218m) linked to the idling of the Ukrainian operations.
(with inputs from agencies)
